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Home buyers mistakes: Top real estate traps to avoid
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Finance Canada
Buying a home can be as exciting as it is overwhelming. Two real-estate experts share their insights into all-too-common house-buying mistakes.
Not being pre-approved for a mortgage
“This is the number-one mistake,” says Kimberley Marr, a Toronto real-estate broker and author of Your First Home—A Buyer’s Kit for Condos and Houses. “I wouldn’t even go look at a house until you know what you’re preapproved for. It’s a benefit when you’re putting in an offer, especially in a multiple-bid offer, being able to provide written proof to sellers that you can complete this transaction. It could provide leverage in getting the house.”
Marr also suggests shopping around for a mortgage and being clear on the terms and conditions. In other words, don’t be too excited about a low rate until you read the fine print.
Not being clear about your needs and wants
“A lot of people want to go out and buy a house but they don’t have a plan,” Marr says. “Then they get hooked into the emotional link to a home. They get caught up in the excitement and overlook necessary features like how many bedrooms and bathrooms? What about Parking? Closet space? Don’t rush into looking before preparing and considering what you’re looking for.”
Couples not being on the same page
“One will want to be in Langley and one will want to be in North Vancouver,” says Vancouver real-estate agent and former developer David Setton. “Or one is just going along but not expressing what they really want. It’s not a good use of anybody’s time. Sometimes one partner will delegate the other to find the house because they’re too busy at work. If couples don’t do everything together, you spin your wheels.
Skipping a home inspection
“You need to make an offer conditional to a satisfactory professional inspection by a qualified home inspector,” Marr says. “This is the opportunity for the inspector to discover and give you a heads-up about any flaws or issues you may not have been aware of and help you understand the difference between maintenance issues or major structural issues, faulty systems.
“When people get caught up in multiple offers or bidding wars, which happen often in cities like Calgary, Toronto, Vancouver, a lot of them to try and look good so they clear the inspection from conditions. That is not something you want to give up. And attend the inspection; don’t just hire someone to do it without you being there.”
Similarly, people looking at a condo should make the offer conditional on seeing strata certificate, which includes information such as its budget, rules and regulations, and upcoming assessments or expenditures.
Leaving home insurance until the last minute
“Most people for some reason forget about it and leave it till day before they’re closing,” Marr says. “But you need to make sure the property is insurable, especially if it’s a rural property. Maybe it’s heated with oil or has old wiring. If you can’t get insurance, the bank will not advance funds on closing.
Digging their heels in when negotiating
“Let’s say it’s a $500,000 home; the buyer wants$ 483,000 the seller wants $484,500,” Setton says. “I’ve seen people say, ‘No, I want to win.’ Negotiating isn’t about winning; it’s about compromise. People might be 20 days apart on completion date, and one will say ‘I’m not willing to wait.’ It can be a deal-breaker but shouldn’t be. In the grand scheme of things, it’s nothing.”
Being swayed by bling
Granite countertops and stainless-steel appliances are appealing, but Setton says you need to focus on the floor plan. “You can change everything else: cabinetry, lighting, wallpaper, carpet, and flooring. But you can’t change the floor plan. Look for efficiency in your floor plan, especially if you’re buying a condo.”
Being indecisive
Sometimes people will see a home they love but they don’t make an offer because it’s the first one they’ve looked at. “They hesitate,” Setton says. “Not being decisive can make you lose a house you really like. It’s never going to be perfect. It’s never going to be 100-percent.”
Trying to time the market
‘That’s a huge mistake,” Setton says. “It’s not possible. If I could do it, I’d be a millionaire. There are too many factors that affect the market; interest rates, global influence... I can tell you what the market is like right now and maybe even three months from now, but if a world financial crisis hits or a tsunami hits... Anything can happen.
“A lot of it comes down to being ready in your mind. Are you really committed to buying right now or just curious about what’s happening? The best realtor in the world can’t convince you to buy anything if you’re not ready. The right time to buy is when you’re in the financial position to buy.”
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