For some, house hunting and the process of purchasing a new home can be a wholly unfamiliar process. This can lead to mistakes-especially for first-time buyers. In order to help avoid any unwelcome issues, VIP Condos Toronto has compiled a list of some of the most common house hunting mistakes buyers can make:
- Know What You Can Afford. Before starting your search, make sure to be aware of your financial constraints. Once you have a clear idea of your price range, it is highly advisable to only look at places within it. This will prevent any financial hardship, and will also lead to less dissatisfaction with available options.
- Not Getting Your Mortgage Pre-Approved. The difference between what you think you can afford and what the bank is willing to lend you may not match up (this is largely determined by the stability of your income and your credit rating). As a result, getting your mortgage pre-approved will make the buying process much smoother. If you are not able to get a mortgage-or if something occurs that alters your credit rating-then any deposit may be non-refundable.
- Not Working With an Agent. Real estate agents are ethically obligated to consider the best interests of both the buyer and the seller. Having your own agent or broker to help guide you through the purchasing process will give you a much better bargaining position.
- Lack of Vision. Agonizing over miniscule details rather than looking at the big picture can often lead to disappointment in the future. If a home checks all your necessary boxes (such as affordability, location and size), then those factors should take precedence over issues that are fixable-such as paint colors and aspects of interior design. At the same time, it is important to not take on more than you can handle. For example, buying a house that will require a lot of work to be made habitable can lead to much more time & money being expended than was previously planned.
- Disregarding the Neighborhood. While it is incredibly difficult (if not impossible) to completely predict a neighborhood’s future, there are certain characteristics that will provide an accurate picture of it. These include:
- Development plans
- Zoning laws
- Traffic levels on local streets
- Amounts of undeveloped land
- Whether property values in the area have been rising or declining
More info on this topic can be found here.
- Making An Offer Too Quickly (Or Too Slowly). In fast-moving housing markets like the GTA, making an offer quickly can increase your chances of a successful purchase. However, making an offer quickly should not come at the expense of important steps, such as examining the neighborhood or learning more about local schools. At the same time, taking too long to make an offer can lead to you missing out on your desired property-and in some cases, a longer search can have bigger consequences than simply being time-consuming.
- Making An Offer That’s Too High. Bidding wars are common in competitive markets, but becoming involved in one can lead to further issues. Firstly, if the property is appraised at a rate below your offer, then the difference must be paid out of pocket rather than through a mortgage. Secondly, plateaued or declining market conditions can make it difficult to sell at the price which you previously paid. These issues can be avoided by comparing prices with other properties in the area, as well as getting your agent’s opinion.
- Not Inspecting The Property. Before closing a deal, knowing the state of repair the house is in is essential. Setting up a thorough inspection of the property can avoid any unexpected headaches in the future.
Investopedia has compiled an extensive list of common house hunting mistakes, which can be accessed here.