Six Common Mistakes When Buying Real Estate
1. Not getting pre-qualified for a mortgage
Before looking for your next home, take the time to get pre-qualified by the bank or mortgage broker you choose. This key step can save you hours of searching for homes in the wrong price range or worse, purchasing a home and then finding out you don’t qualify for financing. Pre-qualifying gives you peace of mind, helps narrow your search, and gives your RE/MAX agent a negotiating edge by being able to alleviate the seller’s concern over financing. This last piece of the puzzle is of especially key importance if the deal goes to a multiple offer scenario.
2. Not shopping for mortgage terms
Rates are negotiable! Banks will sharpen their pencils to get your business, especially if you have a good credit rating and bring other business to them such as your RRSPs and savings accounts. Posted rates should viewed as a starting point. You need to know what the best rate is and this is usually done by getting quotes from the competition. Also, ask whether the bank will cover appraisal fees, and about buy-out fees, penalties, and payment options. The time you spend doing this research can save you thousands of dollars over the life of the mortgage.
3. Not getting professional inspections
Nobody wants to purchase a home only to find out later there are defects! In the large majority of situations, you should ensure you obtain a home inspection. If the inspection turns up deficiencies, you may be able to negotiate the purchase price to cover required repairs or make the homeowner remedy the problem prior to sale.
4. Not using a professional real estate agent
Your RE/MAX agent can help you make a purchase with the least amount of problems. He or she can ensure the price you pay is fair market value and offer expert advice on what to look for, conditions to include, negotiation strategy, and more. After all, we work solely for you and have your interests at heart.
5. Buying first before selling
If price is important, you should always sell your present home before buying another. It has the advantage of letting you know exactly how much money you will have available for your next purchase. Selling your home first allows you to place fewer conditions on your purchase, which makes your offer more attractive to a seller. They often will demand more money to take a “subject to” offer which takes their home off the market. The other advantage is that if you find a house to be be terrific, chances are others will also find it attractive, too, and you stand to lose it if you can’t make an unconditional offer.
6. Not knowing the full cost of home buying
Make sure you know all the costs associated with your purchase and don’t forget about things over and above the purchase price, such as: legal and conveyancing fees, property transfer tax, property taxes, landscaping, roofing, appliance repairs, and more!
Before you make a costly buying mistake when you purchase your next property, contact our team to find out how we can help you navigate the complicated world of real estate.