The process of buying a home can be incredibly exciting, yet stressful, all at once. Where do you start and what do you need to know?
It is essential you do your homework before you begin. Learn from the experiences of others, do lots of research. Of course, with so many details involved in the home buying process, mistakes are probable. Hopefully, these are small mistakes, but, still, be careful. Even smaller mistakes can turn out to be costly. An experienced realtor has the knowledge to rely on to minimize risk when buying a home.
Following is a list with some guidance to help you avoid some common pitfalls in the home buying process.
1. Searching for houses without getting pre-approved by a lender
Getting pre-approved is always the first step in the home buying process. Knowing what you can afford gives you several advantages. The first advantage is that you know your monthly living costs: how the mortgage payments fit your budget and within your personal comfort level. The next advantage is that you will then only see homes that fit your budget. You won’t feel tempted to spend more than you can afford. Another advantage is that you will stand stronger into your negotiations with the seller. Knowing what you can carry, where your line in the sand is, gives you a stronger position in negotiations.
2. Allowing “first impressions” to influence your decision
Look behind the ‘bling’ in a home and focus on the important matters
3. Failing to have the home inspected before you buy
A home inspection is essential when buying a home. A home inspection is rather inexpensive, especially if you compare it to the value of what you purchase. Have a home inspector examine the main elements in the home, such as roof, furnace, hot water tank, the electrical, plumbing, etc. The technique of thermal imaging presents the opportunity to find leaks, which is worth the value of the home inspection itself. A home inspection can give you the opportunity to walk away from the purchase or to renegotiate the sale price. And if not that, at least you know how to budget for upcoming repairs and maintenance. Learn more about the importance of a home inspector.
4. Not knowing and understanding the offer to purchase
A Comparative Market Analysis is not only for sellers
If you have made the decision of buying a home, make sure to hire your own real estate agent
5. Making an offer based on the asking price, not the market value
A CMA, a Comparative Market Analysis is not only for sellers. Buyers also need to understand the current market value of the property. This information makes it possible to make an informed decision. Is the home underpriced, overpriced or priced at fair market value? Ask the realtor for an evaluation of the property based on what similar homes, in the same area, recently sold for. Then decide what the home is worth to you, and design a strategy before submitting an offer.
6. Failing to familiarize yourself with the neighbourhood before buying a home
Check out the neighbourhood you’re considering and ask around about communities. What amenities does the area offer? Are there schools, churches, parks, or grocery stores within reach? If you have children, consider visiting the schools in the area. How will you be affected by a new commute to work? Are there infrastructure projects in development? All of these factors may influence the way you connect to your new home. So, invest quality time researching the surrounding areas before purchasing. Learn more about finding the right community.
7. Not looking for home insurance until you are about to move
Don’t shop for insurance at the last minute. Insurance is important, especially for the biggest investment in your life. Shopping pays off in Canada. But the best price doesn’t necessarily mean the best product for you. So, give yourself time to research insurance well before possession date. Insurance must be in place before the lender gives out the funds. This means, no insurance, no home.
8. Not recognizing different styles and strategies of negotiation
Negotiations come in many different styles. And this is where the experience of a realtor comes in. Determine, with your realtor, which strategy to take before submitting an offer. Motivation is key in negotiations. Are you in love with the home, or are you in dire need of a home? And what is the motivation of the seller? Also, the type of market plays a big role in buying and selling. Is it a sellers’ market, a buyers’ market or a balanced market? Is the property priced below market value? Perhaps the asking price is too high according to the evaluation. These are just a few questions to take into consideration when making an offer. Low ball offers can offend a seller, making the negotiations stagnant. However, overpaying for a property isn’t good either. Discuss this with your realtor before submitting an offer.
We are Tanja van de Kamp and Ariette van Pelt, working as a team, both buying and selling homes in Calgary. Calgary has been our home since 2004, and real estate our full-time profession since 2009. Tanja was a lawyer in The Netherlands for 12 years, and learned how to negotiate strategically, and to work in the best interests of her clients. Thanks to our honest and transparent approach to real estate and towards our clients, we have built our business. It’s been a privilege to work with our clients, and, over the years, many clients reciprocated their appreciation of us, as shown through their many referrals.