Real estate: 10 mistakes to avoid as a buyer
Last update : 2022-05-24 16:17:33
After several months or even years of preparation, you are finally ready to become a homeowner! You have a good down payment, you know where you want to move, and you have even decided to use a real estate agent to help you through the process. You think you've thought of everything. But is that really the case?
Whether it's your first purchase or you're already a homeowner, buying a new property is a long process that can sometimes become disorientating. You may be tempted to cut corners to make the process easier and faster.
If you want to make sure you have a positive purchase experience, make sure to avoid these 10 mistakes.
1. Not getting pre-approved for your mortgage
Getting a mortgage pre-approval is the best way to kick off the buying process by letting you know your maximum borrowing capacity. This is a guarantee of seriousness in the real estate sector and many brokers require this document before showing you around properties.
At the time of closing, having obtained a mortgage pre-approval can also allow you to stand out to the seller if several other buyers are interested. It is therefore an informed decision at all times.
To learn more about mortgage pre-approval and how to get it, read our article How to get pre-approved for a mortgage?
2. Not making a list of your needs
Before you even start your research, make a list of the criteria that you consider essential in the purchase of a future property. For example, you might consider it essential to find a house with a large backyard so that your children can play outside.
This list of essential needs will guide your real estate broker's research. This will allow them to target the properties that best meet your needs and avoid any unnecessary visits.
A list of 'desired', but not essential, criteria can also help you to decide between the properties visited. For example, you might want to buy a house that already has a pool. If all the properties you visited had a large courtyard, but only one of them had a swimming pool, noting down this criterion could help you to decide.
3. Not asking enough questions
Is one aspect of the desired property leaving you puzzled? It is never a good idea to rely on chance to resolve your doubts! Don't hesitate to ask questions to the seller or to one of the real estate professionals who accompanies you. Better to ask too many questions than not enough!
By inquiring, you will be less likely to encounter any unpleasant surprises if you decide to buy the property. This will give you the opportunity to clarify the situation and ensure that all parties are on the same page.
4. Being guided by emotions
Bright, spacious, affordable… Is the house you are visiting a perfect fit and does it meet all your needs? Be careful not to let your emotions take over!
When you fall in love, it is normal to get carried away and to want to conclude a purchase as quickly as possible. But even if everything seems perfect, your dream property could turn into a nightmare if you're not careful enough.
So, take a step back and make sure you do all the right and necessary things before you close the purchase. This involves, for example, hiring a building inspector to check the condition of the house and identify any potential problems.
On the other hand, too much enthusiasm could also put you at a disadvantage in the negotiation process. If the seller sees that you love the home, they may be tempted to play with your emotions to influence your purchase decision.
5. Not reading the documents associated with the real estate transaction before signing
Think reading the documents is a waste of time? Think again. Reading the terms of the contracts you sign is essential!
Buying a home is an important decision. You should take your time to read everything, even if it may seem tedious and not the most exciting.
So, make sure you know all the details involved in becoming a homeowner in order to avoid any unpleasant surprises. If you don't want to read everything, make sure you ask the experts you work with to explain what the documents mean.
6. Forgetting to visit the neighbourhood where you are going to buy the property
You think a lot, of course, about visiting your future home before buying it. But have you thought about the neighbourhood? Even if it is sometimes mistakenly forgotten, it could have a major impact on your purchase decision.
Do you think your dream home is in a quiet neighbourhood? A simple visit to the property cannot always fully confirm this hypothesis. Find out about planned projects in the area (future construction projects, municipal projects, etc.) and visit the neighbourhood several times in order to confirm your first impression.
Ideally, take the time to visit the neighbourhood at different times and on different days. This will give you a more complete picture. A neighbourhood that seems quiet on a Monday morning could turn out to be noisy on a Friday night!
Don't know which neighbourhood to choose? Discover 4 ways to choose your future neighbourhood in our article.
7. Not inquiring about available subsidies
It's no secret that buying a property is an important investment. Getting municipal, provincial or federal financial assistance could give you a boost in your purchase project by allowing you to increase your down payment or by offering you a tax credit.
Check with the appropriate institutions. For example, if you're buying your first property, you may be eligible for the Government of Canada's First-Time Home Buyer Incentive.
8. Waiting too long before making a promise to purchase
Have you visited several houses and want to take the time to decide between them? That's perfectly normal. It would be a mistake to make a decision too hastily just to regret it afterwards.
However, be careful not to stretch the wait over too long a period. Hesitating for too long before you submit an offer to purchase can cause you to lose the opportunity you had with the seller, especially in the current real estate market conditions, where demand is well above supply.
Note that the speed of sales can vary enormously from region to region and city to city. A house in the city may sell more quickly than a house in the country, for example.
9. Making an offer to buy that is too low
If the offer to buy you make is too low, chances are you will be disqualified by the seller in favour of a higher offer. This situation is all the more likely in the context of overbidding plaguing the real estate market throughout the province.
To make sure you make an offer to buy that offers a fair price for the property, listen to the advice of your real estate broker. They are the expert best placed to guide you throughout your real estate transaction.
10. Underestimating the costs of purchasing
Buying a house is an expense that does not come alone. Several additional costs will be added to that of the property, both before and after the purchase. Inspection fees, notary fees, moving fees, wire connection fees, potential renovations and new furniture to be purchased are all examples of costs that you will need to add to the purchase price. Therefore, having only one amount available for the down payment is not enough!
Ensure that you plan your budget taking into account these various costs and charges that can accumulate quickly. Your bill could easily add up to several thousands of dollars!
To learn more about the various costs associated with buying a house, read our article 10 homebuying related costs.
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