Are You Looking to Buy a Home? Don't Make These Mistakes!
Wednesday Jul 14th, 2021Share
You've decided to become a homeowner and you've been working your way towards it with a vengeance.
You have multiple listing sites bookmarked in your browser. Your realtor is now appearing on your "most frequent contacts" list. And everybody in your life knows that they can come to you for advice on how to value a residential property. However, real estate can be complicated, and buying a home even more so. There are always moving pieces and logistics that need to be sorted out. But at the same time, it's easy to make mistakes as a first-time homebuyer that can land you in the wrong house while also costing you a substantial amount of cash.
To that end, here's a list of four common mistakes that many homebuyers have a tendency to make.
Mistake #1: Being in Too Much of a Hurry
In July 2021, Global News reported on the red-hot Canada real estate market. And when you've got some of the lowest interest rates ever combined with fewer houses to choose from, no one would blame you for being tempted to rush the offer like an Olympic sprinter competing for gold. Even so, however, the house hunt is one of those situations where rushing for the sake of rushing can have serious financial consequences. That's why when you're wrapping up the day and discussing the different houses you've seen, it's important to avoid making rash decisions. Take a deep breath, decide if you like the property, and then go through the standard steps. Reasonable sellers will understand that you're just trying to do your due diligence.
Mistake #2: Overlooking the Rest of the Neighborhood
When you've fallen in love with one specific house, it's easy to get attached to it to the point of taking the position that the surroundings and the other remaining details don't matter. But the truth is that if the house is one or two blocks away from a high-crime area or if you're a free-spirited person looking at a property with an especially particular HOA, it's important to think about what your quality of life might look like after you've moved in. To that end, the area surrounding the house can also affect property values. If it looks like you're buying in a dying area or the services in that region are shutting down and moving elsewhere, you may want to think very seriously about what the monetary value of your property means to you in the grand scheme of things.
Mistake #3: Trying to Fix Your Credit at the Last Minute
You hear financial experts and people in real estate talk all the time about having a solid credit score before trying to purchase a home. After all, your score directly influences factors like whether you get approved for the mortgage while also affecting your offered interest rate. While doing a bit of debt repayment and financial shuffling is par for the course when you're making a mortgage application, you have to give your credit score time to improve.
Because there are a surprising number of solid financial decisions that can cause your credit score to drop. The best way to weather out these credit-affecting day-to-day fluctuations is to work on your credit early. You'll be glad you did.
Mistake #4: Skipping the Home Inspection
This one feels like a subcategory of the "Rushing Too Much" umbrella, but we thought it deserved its own category. According to CBC, buyers have been increasingly choosing to waive their home inspections. As we mentioned before, the housing shortage is in full swing and a lot of would-be homebuyers are having to deal with a more competitive real estate market than usual. However, from simplifying the process of getting home insurance to giving you the equivalent of a "This expert agrees with me!" line of argument during negotiations, home inspections just make sense if you want to make your home purchase safer to live in over the long haul.
Buying a house is a major purchase by any measure. As such, it's important that you're able to go into the loan agreement feeling confident that you're getting your money's worth. We've just given you a list of pitfalls to avoid during your homebuying journey. If you can avoid making the mistakes we've talked about during your house hunt, your pathway to becoming a homeowner will suddenly become a lot easier.
|Finance Writer & Blogger|