5 Common Mistakes First-time Home Buyers Make
Thinking of buying a house for the first time? If so, make sure to do your due-diligence when it comes to researching the home-buying process. Remember, purchasing a home is probably the biggest asset you have ever purchased; you don’t want to get caught making mistakes that otherwise could have been avoided. Nonetheless, here are some common mistakes first-time home buyers make.
1. Choosing the cheapest real estate agent or none at all
A lot of first-time home buyers look to save money. And saving money where you can is a no-brainer. However, when it comes to your real estate agent this isn’t the area to cheap out. And if you’re thinking of doing the transaction yourself, forget it. A real estate agent does much more than find listings and set up open houses. They know the inner workings of real estate transactions. A good real estate agent is worth the higher cost as they will give the best return on investment. This should provide insight into the quality of work they provide and how they will help you get the best results. Make sure to ask your real estate agent the right questions before settling in on one.
2. Forgetting about closing costs
After picking a house and mortgage options, it’s time to make an offer. It is easy to forget that you will need probably an additional 2% above purchase price to cover closing costs such as:
- A professional home inspection – Always make your offers conditional upon home inspection. A house may look beautiful, but then have thousands of dollars of repairs needed.
- Land transfer tax – this is unavoidable. In Canada, most provinces levy a one-time payment.
- Moving Costs – Make sure to get three quotes from professional movers, then choose from there. Much like real estate agents, the cheapest option isn’t always the best option.
3. Rushing the purchase
Take the time, do the research and make a decision you can get behind 100%. As mentioned earlier, this is probably the biggest purchase you’ve ever made. This means it’s important not to rush the decision. Take the time and plan out a reasonable time frame to accumulate funds for a down-payment, packing, interviewing real estate agents, etc. Taking the first mortgage broker to give you a quote, along with the cheapest real estate agent, means you will probably rush your decision on a house as well. Take the time, do the research and make a decision you can get behind 100%.
4. Choosing a house without looking at the neighbourhood
The land you’re buying is worth more than the house you are going to live in. It’s important to remember this when you are purchasing a house for the first time. Look to see where the local schools are, the parks, other houses that have sold recently, and of course make sure the economy is growing.
5. Overreaching on the purchase price
This is the biggest mistake every first-time home buyer should avoid. Set a budget and stick to it. Falling in a love with a property is easy, but breaking up with debt is hard. Figure out what your mortgage payments are going to look like and then start setting away money for those payments. You never know when you won’t be able to work and getting stuck with a payment you can’t afford isn’t good. Consult with your mortgage professional and go from there.