Kelowna Realtor Karen Mustard answers one of the most asked questions in real estate: "What are the biggest mistakes you've seen buyers make?"
Buying a house is a big decision, but it doesn't have to be difficult or more stressful than it needs to be. It's natural for your emotions to run high during the process, so it is important to set clear expectations with yourself before you begin, make rational choices and to understand the limitations of your finances, home repair skills, and patience.
1) Finances are Not In Order
As Karen mentions, having your finances in order before you begin looking is one of the best things you can do prior to house hunting; this will save you stress during the real estate transaction. It's important that you have met with a lender or mortgage broker before you start your search and have a pre-approval amount so you know how much you can spend. It's also important you have done a thorough review of your finances and budget so you know how much you can 'actually' afford. After all, just because the bank might be willing to lend you $x amount, can you really afford that monthly payment within your budget? And, it's important you keep a file with all of the documents your lender will need when it comes time to get the mortgage.
2) Indecisiveness or Lack of Clarity with Needs/Wants
It's important to know your needs and wants in a home. What's most important to you? What can you live without? What are some deal breakers? When you don't have a well-defined wish list, house hunting can be frustrating and time consuming. There's no point looking at condos if you know you want a private garage. Likewise, if you don't have time to maintain a yard, you might as well not begin with looking at single family homes.
Some items to consider include:
3) Waiting For the Perfect Time
The right time to purchase a house is when it is the right time for you. It's likely you're ready when you have your finances in order, are pre-approved by a lender, have a down payment saved and you're ready to start investing in your own mortgage vs renting (and investing in someone else's). Some people get influenced by the short-term market fluctuations, the news and friends and family who weigh in on market stats, market fluctuations, trying to find that ideal time to buy low/sell high etc. If you're planning on living in your home for the long-term, then you shouldn't let short-term market fluctuations affect your long-term purchase. Talk to an experienced and knowledgeable real estate agent to devise a buying strategy that is right for you, within the current market.
4) Looking Beyond Your Means
We've all done it. We get side-tracked in our search by looking at homes that we can't afford. Suddenly nothing seems quite as good as the butler's pantry, the gigantic salt water pool, and the master suite with a to-die-for ensuite and private patio with panoramic views. When you are serious about house hunting, begin your search by looking at homes within your neighbourhood and price range specifications.
5) Over-Buying or Under-Buying
Buying either too big or too small of a home, or spending too much or too little money, is a common mistake home buyers make. It's important to look at your lifestyle and needs and what the next five (or so) years might hold. Knowing what you can afford to spend, what might be a reach, and the amount of space you will need (or can make do with) is important when it comes time to start house hunting.
6) Falling In Love
When you know it's the one, you just know! Love at first sight can happen when house hunting. When you experience that tingle, the goosebumps, and that feeling from deep inside that starts screaming "this is the one!", it is time to let your head take control (or your REALTOR®). While your heart might tell you to do whatever it takes to make sure you get this home, you don't want to make poor decisions, pay too much or make concessions you won't be happy with down the line.
7) Overlooking Serious Flaws
Think constructively and logically when looking at home. Is the home missing key items from your needs' list? Is it backing a busy & noisy street (and the constant sound of vehicles will wake your napping baby)? Is it in need of major repairs? As soon as you find yourself saying "oh that's ok, I can just..." it's time to take a step back to determine if this really is the house for you. Once again, this is why you will want an experienced REALTOR® working for you. They can ask all those questions. They can see beyond the paint colour.
8) Trying to Get Too Good of a Deal / Only Thinking About Price
When it comes to making an offer on a home and negotiating, it isn't all about price. Price is the amount of money you get, but it's also important to look at value and what you get. Have your REALTOR do an analysis on the property to determine fair market value (as list price isn't always set at that). This will provide some leverage when making an offer and negotiating. Also, consider items such as inclusions (appliances, window coverings etc) and timeline for conditions and move-in dates. There are a variety of ways to structure a deal so that you are getting good value for the home.
9) Forgoing a Home Inspection
When buying a home, it's important that one item in your offer to purchase is that it is subject to a home inspection. And then, in the excitement to close and remove conditions that you do not neglect this important step. A home inspection is designed to uncover anything that might be in disrepair, and to forecast any upcoming items that might need repair. If you're going to buy into a home that is going to be a money-pit, you want to know ahead of time what you're getting into.
10) Underestimating the Full Costs of Buying a Home
Don't underestimate how much buying a home will cost. Moving expenses, legal fees, and the home inspection are a few of the bigger costs you might have to pay out-of-pocket. Leave room in your budget for re-decorating, furniture, and repairs, too.
11) Buying Without Experienced Representation
Don't go at this alone. This may very well be the biggest financial transaction of your life so far. Make sure you protect your investment. All of the mistakes we've outlined above are often due in part to people who are working with inexperienced real estate agents, or trying to go at it on their own. This is your HOME. Trust professionals!
Every day, we get asked questions from interested buyers, sellers, homeowners and industry professionals. We love to share our knowledge. Do you have a question you’d like the team to answer? Email firstname.lastname@example.org with your question and we’ll get it answered!