You don’t have to be a first-time home buyer, to fall into these common mistakes when buying a home.
So, you have made the decision to buy a home, which means you have already met with a lender and they have all your pertinent informant to have determined pre-approval. Things such as, but not limited to income verification, notice of assessments from CRA and list of debts and assets.
This pre-approval will give you a general idea as to what the lender will give you as far as a mortgage. The bank will need an official accepted offer on a property to proceed with the application for final approval including verification of a down payment being raise and in an account for up to 90 days.
1. Buyers Do Not Have Budget in Place
Buyers have a pre-approval amount of how much the bank is willing to lend them, but do not have a monthly budget that realistically sets out expenses other than just a monthly mortgage payment. Approximate utilities, taxes, living expenses, entertainment, repairs, additional loan payments, sports fees.
Are current expenses going to be manageable with the anticipated mortgage payment. Just because a bank is willing to lend you a certain amount does not mean that you have to use the full amount, especially if you have other expenses that are priorities, such as sports fees, or travel. The flip side to this scenario is that you may end up buying the most gorgeous house on the block, but with the mortgage and taxes you cannot afford to entertain or even afford the up keep of the property.
2. Buyers Choose the Home over the Neighbourhood
Location, location, location is the main influence on a property’s price. You may have found the ideal home, that checks off all the boxes as far as the home itself goes, but do not forget to look around the neighbourhood. What are nearby amenities, community supports, recreation? Will this location suit your needs or your dependents needs for the next year or five years? Are the property values increasing? How will surrounding properties or upcoming developments affect your property?
You may be fine with an extra-long commute just to be able to live in your dream home and that is perfectly fine. One thing to keep in mind is to never say forever, and you should always keep your homes resale potential in the back of your mind.
3. Do Not Fall in Love with a Home that is Above what you Can Afford
It is tempting to add homes to your viewing schedule that are outside your price range, just out of curiosity. While there is usually some negotiating room built in to the list price and some sellers are willing to look at low ball offers if they have been on the market for a while, most often you will just annoy the sellers who have to get their home ready each time for viewings and will leave you disappointed in any other properties you view that do not live up to the level of the over budget one you viewed.
4. Be Smart About Renovations
A lender will usually only lend an extra 10% of mortgage amount for any improvements or renovations you would like to do. So, if you are looking at a property that needs a major repair or fixing, then you may want to negotiate a price reduction before you purchase, or have the sellers complete the repair, because if the repair is something major your lender may not be willing to cover it in the mortgage amount, which means you would have to come up with the funds some other way.
Make sure you are prioritizing any renovations that will help to maintain the property and prevent it from coming in to disrepair. As much as you may dislike the kitchen in your new home, having water damage from a roof that needed to be repaired will save you money in the long run. Protect your investment.
5. Do not Touch Your Emergency Fund
Perhaps it should be specifically, named the “Emergency HOUSE Fund”, so that you are not tempted to use these funds for other types of “emergencies”. Again, having this fund set aside is about protecting your investment. If a major house repair is needed you do not want to have to put it off or delay the repair just because you do not have to saved up to do the repair. This can end up costing you fair more in the end.
6. Do Not Be Too Cheap
There is a fine line between making yourself house poor and not being realistic about the home you need. If your priority is to have a short commute time so that you have more time at home with family, then you may have to consider, increasing your house buying budget to be able to afford a home that is closer to your work.
Or if you like the prices of properties that are dated and need upgrades, but have a busy work and family life, then you have to put a value on your time and the time it would take you away from your family and work in order to do those updates yourself. Guaranteed, those renovations that you were planning to do when you purchased are going to cost more and take longer than you originally thought. It may be less stress in the end to increase your budget and find a property that is move in ready.
Consult a REALTOR®. Whether you are looking to buy directly from a seller, or you plan on working with a REALTOR® from beginning to end, a REALTORS’® advice is usually free. If you want to know if there are any developments coming up in an area, or what homes are selling for in an area you are considering, REALTORS® are a great resource for knowledge.
If you have a REALTOR helping you with a home search as well, they often have leads on properties coming to market that may not yet be listed or they can search for properties that are not even currently considering selling.
REALTORS® websites are a great place to start searching as most have their websites linked in to the Multiple Listing Service System that shows all the active property listings in Canada.
REALTORS® put a lot of work and content into website as it is a lead generation source for them so you will often find government and community links and well as tradespeople and local resources. For EXAMPLE https://movenovascotia.com
TEXT MOVENS to 902-200-6497 for a
Complete Guide to Buying a Home in Canada