Whether you’re a seasoned homebuyer or a newbie in the market, doing extensive research can help you navigate the buying process with confidence. So, let’s dive in and explore the common pitfalls that you should steer clear of before embarking on your homebuying journey:
1. Not getting pre-approved for a mortgage
This step is critical because it helps you know your finances before buying a house, allowing you to determine your budget and make you a more attractive buyer to sellers. Pre-approval means that a lender agrees, in principle, to lend you money towards the purchase of your home.
It’s important to note that pre-approval is not the same as pre-qualification, which only gives you an estimate of what you might be able to borrow. Therefore, before you start house hunting, make sure to contact local banks or an independent finance broker who has access to a range of lenders and finance products to get pre-approved for a mortgage loan. This way, you’ll know exactly what you can afford and can shop for a new home with confidence, making you a stronger buyer when you make an offer on your dream property.
Need some financial advice? Speak to our friends at Fresh Home Loans.
2. Skipping the home inspection
A home inspection can reveal potential problems that may not be visible during your initial walkthrough, and it gives you the opportunity to negotiate repairs with the seller before closing. The buyer’s inspection report may uncover necessary repairs that can be costly to fix, and you’ll want to know about them before closing on the property. By skipping the home inspection, you risk spending thousands of dollars on repairs that could have been easily avoided.
3. Not hiring a professional
Even though there is a lot of information available online, it’s still essential to seek the advice of an experienced professional early in the home-buying process. Your local real estate expert can educate you about the process, provide valuable insights into the neighbourhoods you’re looking at, and have access to properties before they go on the market.
Meet OC’s real estate experts here.
Shopping for a home loan can be tiring work and requires commitment but choosing the wrong lender could set you back thousands of dollars. Consider using a mortgage broker who can compare the terms of each potential loan and provide recommendations to best suit your
4. Focusing on cosmetic features
While a beautiful paint job and trendy flooring may be tempting, it’s important to prioritize structural integrity. Don’t overlook the necessary repairs indicated in the buyer’s inspection report, as the cost to repair items in the report can add up quickly.
5. Rushing into a decision
It’s important to take your time, do your research, and have a clear understanding of what you’re looking for before making an offer. Don’t let emotions cloud your judgment during the buying process and be sure to thoroughly inspect properties for any potential issues. Remember, there are plenty of houses out there!
Falling in love with a house and rushing into a decision can lead to overpaying, buyer’s remorse, and even deals falling apart over small details. Remember that owning a home requires constant work and comes with ongoing costs beyond the mortgage, so be sure to calculate these expenses and factor them into your budget. Additionally, avoid showing too much interest in a property to the seller’s agent, as this can be used against you during negotiations. Instead, be an informed buyer and make a decision based on the facts, not your emotions.
6. Ignoring the neighbourhood
Failing to research the area properly can result in your dream home turning into a nightmare. It’s important to spend time in the area before committing to buying a property, especially if you are entirely unfamiliar with it. Take your time to assess the neighbourhood and make a list of amenities that you will regularly need. Check the crime statistics, and if you have kids, ensure that the area is child-friendly and has good schools.
Don’t rely solely on online property portals, as independent estate agents with local knowledge can be worth their weight in gold. Getting to know a reputable estate agent in your area of choice is highly advisable and could result in you finding the right home at the right price.
7. Overextending your budget
It’s easy to get caught up in the excitement of a bigger and better property, but it’s important to set a realistic budget and stick to it.
Spending more than you can afford leaves you exposed to potential financial shocks, including rises in interest rates. Additionally, remember buying a home comes with hidden costs like loan application fees, inspection fees, government fees, legal fees, and more. These can set you back around 5% of the property price.
While it may be tempting to borrow the maximum amount offered by the bank, it’s also important to consider future expenses like getting married, having a baby, or buying a new car. These future life events will not be accounted for by the bank or an online calculator.
To avoid overextending your budget, learn about the hidden costs of buying a home here.
If you’re looking for professional guidance at any step of your home-buying journey, contact Ouwens Casserly Real Estate today. Our team of experts is always ready to assist you with all your real estate needs.
