Avoid these 10 costly mistakes when buying your home
Buying a house or a condo is an important financial decision that requires careful thought and research.
Avoiding these common home buying mistakes ensures you're making a smart investment that you'll be happy with for years to come.
List of mistakes to avoid when buying a house or condo
1. Not learning about the current market
2. Neglecting to make a plan and properly determine your needs
3. Poorly planning your budget
4. Not getting pre-approved for a mortgage
5. Choosing your mortgage without comparing options
6. Not doing enough research
7. Giving too much importance to aesthetics
8. Making an emotional purchase
9. Skipping the property inspection
10. Buying without the help of a real estate broker
1. Not learning about the current market
Before starting your process, you need to know the market context in order to prepare accordingly.
For example, higher mortgage rates mean that the price of the property you will be able to afford is lower than with floor rates. If a market is in favour of sellers, you will have less negotiating power than in a balanced market or a buyer’s market.
Make sure you have a good knowledge of the market. What are the average property prices in the area where you want to buy? What are the current rates? Is the market in favour of buyers or sellers?
2. Neglecting to make a plan and properly determine your needs
A common mistake when it comes time to buy a house or a condo is wanting to skip steps. This is a very important project. Making a clear plan of the process and drawing up a list of your needs are essential steps in defining your budget and guiding your real estate searches.
Make sure to determine your criteria well so that you have a clear vision of what you are looking for to facilitate the process.
3. Poorly planning your budget
It is important to have a defined budget and to stick to it when buying a house or condo.
Buying a property is more than the sale price, down payment and mortgage payments. There are many additional costs associated with buying a home, including closing costs, property taxes, insurance and maintenance expenses. You should also budget for contingencies. Make sure you have a comfortable cushion for unplanned expenses.
If your budget does not allow you to buy the house that meets all of your criteria, be prepared to make concessions.
4. Not getting pre-approved for a mortgage
Another mistake to avoid is neglecting to get pre-approved for a mortgage. Getting a mortgage pre-approval gives you a clear idea of the price of the property you can afford, taking into account current mortgage rates. This step is crucial to properly establish your budget and guide your research.
You can also act quickly if you find a house or condo that you want to buy since you have already been approved for a loan.
5. Choosing your mortgage without comparing options
Many factors influence the cost of your mortgage: the type of rate, the percentage of the rate, the amortization period, etc. Taking the time to educate yourself, compare options and lenders could save you big. A 0.01% difference in rate can equal a difference of thousands of dollars over the years.
By analyzing your options, you will be able to find the loan with the terms that suit your situation.
6. Not doing enough research
Before making a promise to purchase on a property, it is essential to research not only the property, but also the neighbourhood and anything that could affect the value of the property such as development projects.
Your future neighbourhood has a significant impact on your quality of life and the value of your house or condo. When you choose a property, you also choose a neighbourhood.
7. Giving too much importance to aesthetics
It is important to like the appearance of your home. However, don't overlook your budget and other practical factors such as location, size, layout and potential resale value.
If some aspects do not please you, it will always be possible to make improvements or work along the way.
8. Making an emotional purchase
Of course, buying a house or a condo is a decision that involves emotions: you must be charmed by your future property. However, this does not mean that it is not important to keep a cool head and make a rational decision based on the facts and your budget. Do not ignore the flaws and stick to your budget.
9. Skipping the property inspection
Not carrying out a pre-purchase inspection is a common mistake that should be avoided.
Visiting a property does not allow you to know everything about its condition. A pre-purchase inspection can reveal any hidden issues that may not be apparent at first glance. Skipping this important step could cause costly surprises in the short or long term.
Moreover, according to the clauses of your promise to purchase, if the inspection reveals major problems, this could give you leverage for negotiating the price.
10. Buying without the help of a real estate broker
A real estate broker provides valuable expertise and advice throughout the process, whether it is for the search for properties or the negotiations at the time of the promise to purchase.
- He has access to resources and practical tools such as an extensive inventory of properties for sale and market analyses.
- He can refer you to professionals such as building inspectors and mortgage lenders.
- He accompanies you for the pre-purchase inspection.
- He takes care of administrative tasks and saves you time.
- And more.
Working with a real estate broker will allow you to avoid these mistakes for the purchase of your future property.
