7 Mistakes New Buyers Make

Dated: December 31 2019

Views: 68

Buying a home can be a complicated process.  Between the logistics of finding the perfect place to call home, the terminology surrounding legal documents, and the various tasks requiring completion as the process moves forward, it's easy to fall victim to small mistakes that can lead to financial heartache.  Luckily, I have put together a list of the top 6 mistakes buyers make so you can avoid the buyer's remorse and have a successful home buying experience.

1. Not Getting Pre-Approved Before You Shop:

You want to know what you can afford so that you can maintain your monthly budget; this is vital. The last thing I want is for you to fall in love with a house that is out of your price range.  In the grande scheme of things, you want to be able to take your family out for dinner once a month without breaking the bank.  Getting pre-approved means, you are starting your search out with a chunk of the hard work already done.  It also means a stronger standpoint during negotiations.

If you are looking for more reasons to get pre-approved, check out my blog post: 4 Reasons to get Pre-Approved

2. Not Seeking Advice From A Professional:

Everything is online, and I mean EVERYTHING.  Information about properties on the market are available to you online, even booking a showing appointment can be done online.  Even though home searches are mostly online doesn't negate the need for a Realtor.  Realtor's educate people about the process.  When a down payment is going to be needed, lawyers, inspectors, timelines, closing costs, negotiations, and staying to valid to contractual obligations.  We are neighbourhood experts, have access to properties before they hit the market, and we will help you become informed buyers making informed offers. 

Using the listing agent can also fit in this category, yes they are a professional, and I did say to use an expert; however, they are looking out for the best interests of the seller, not you, the buyer.  You want representation when it comes to one of the most significant purchases of your life.  Get your own Realtor, so you have someone backing you, who has your interests at the forefront of their actions.

Finding the right agent to work with is essential.  Interview them, take the phone call or text, set up a coffee (it's free for you!), and make sure your personalities work together.  You are going to be spending a lot of time together in communication with one another, and you want to make sure your agent makes you feel as comfortable as possible throughout the whole process.  You don't want to go through the biggest purchase of your life with someone who you don't click with.

3. Rates from One Lender

If it came down to loyalty or money in your pocket, which would you choose? What I mean by this is there are so many more mortgage options out there than just your bank.  Your bank is going to fit you into their product versus finding a product that meets your needs. A mortgage specialist or associate has access to the big banks AND other lenders, meaning they have competition on their side when looking for the best mortgage rate.  Always get a second opinion, and if in the end, your first lender was the best option, at least you did your due diligence.  Nothing is worse than buying a house and finding out you could have got a lower interest rate, meaning lower monthly payments and a little bit extra cash in your pocket.

4. Style VS Structure

It's effortless to get distracted by the sizzle instead of focusing on the fundamentals.  It's crucial that the home you choose has good bones, has been relatively well taken care of and checks most of your boxes.  Often it can be hard to see past poor paint choices, velvet furniture, dated window coverings, and aged kitchens.  These are all changeable items, cosmetic details.  Features that cannot be changed are the size of the yard, proximity to busy roads, the quietness of the street, and neighbours.  Make sure you are focusing on the details that can't be changed, and that will affect your quality of life the most.

5. Using Lines of Credit or Loans Before Closing

  Do not buy a new furniture set, car, boat, or a new wardrobe before you get possession of your house.  Your lender is going to pull your credit file right before funds are transferred to make sure that there haven't been any loans, lines of credit, or large purchases made on credit, causing delays.  You might not be able to take possession of a new house if you buy large purchases on credit or loans right before closing.  Get this big purchase out of the way, and then you can move onto the next one.

6. Emotional Instead of Business

If you are in love with a house and you "will do anything to get it," you will end up overpaying.  Be objective when writing an offer and counteroffer.  Treat the purchase of a home just like a business transaction; you don't want to pay more than the house is valued or more than you feel it is worth, within reason.  The home buying process is already emotionally charged, to begin with, and the last thing you want is to feel like you paid to much for the house you are purchasing. Having someone who has your best interests at the forefront of their actions but is emotionally neutral is beneficial.  Yep, you guessed it, a professional.  

7. Negating Resale Value

You aren't going to live in your first house forever. On average, people move every 5-7 years.  You want to make sure you are making a wise investment decision that your home will sell in the future.  There are things that we have no control over, such as market variability or the political climate of an area at any given time, but we can tell you if a house you are interested in will sell seven years from now.  If you purchase a home at a high point in the market, next to a busy street and a new stadium is going up right next door over the next ten years, this is going to hurt the resale value of your home.  Maybe the three houses down the road from you are being rezoned to multi-family complexes.  This goes hand in hand with making an informed buying decision, and you want to be able to sell your home when the time comes.

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Angela Halwa - eXp Realty

Hey there! I'm Angela Halwa. I work with people looking for a friendly, knowledgeable, no pressure and fun purchasing and selling experience. Buying and selling a home can be one of the most stressf....

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