Top 5 Home Buying Mistakes

1. Choosing the wrong agent

Lack of experience or conflicts of interest in the person who’s supposed to be your guide can make home-shopping a frustrating experience. As Rob Johnstone, a ReMax agent in Calgary, points out, “In the real estate business, an agent with many successfully closed transaction costs no more than someone who is inexperienced.” Interview several and ask for a list of properties they recently sold or helped clients buy. How did they do on sale prices? How long did it take? Have they worked a lot in your chosen neighbourhoods? A good agent will listen carefully to what you’re looking for, preview homes on your behalf and show you only those that fit your parameters. Tino Sequeira, a representative with Homelife Response Reality Inc. in Mississauga, Ont., suggests requesting a “plan of action” from the realtor that outlines his strategy for finding your home.

2. Choosing the wrong location

There’s a lot more to evaluating the location than proximity to parks and your workplace. According to David Weekley, author of How to Buy a Home Without Getting Hammered, “Even within a neighbourhood, location matters. Is it on the busiest street? Is there a shopping centre out the back window?” You should check traffic at different times of the week and of the day—perhaps your quiet street is used as a shortcut by morning commuters. If you have kids, find out about the schools in the area by talking to local parents and looking up the schools’ provincial scores. Find out if there are major developments planned for the neighbourhood: it could be a pleasant surprise, like a new playground, or a nasty one, like a major construction. Finally, and this one’s important, ask the police for local crime statistics.

3. Offering the wrong price

Many home-buyers forget that the market value of a house is affected a great deal by its neighbours. The best way to gauge a fair offer price to get your agent to pull prices that comparable homes nearby recently fetched. The listings will show not just the amounts but how long the house sat on the market and its condition and size. Note that the character of nearby homes will affect your home’s value. That means the most expensive house on the street may be pulled down in value by its cheaper neighbours, while a low-end one will benefit from posher surroundings.

4. Choosing the wrong house

You walk in, get entranced by the charming decor and are ready to bid, forgetting the house only has one bathroom and lacks the family room you wanted. Peter Kunz, a Toronto broker, cautions against falling in love with “the wrong house”—one that’s too big or small for future needs or a fixer-upper if you’re not handy. Weekley points out that people often swoon over curb appeal and ignore inferior floor plans. “You don’t live on the lawn. How do you really live? Do you really need a formal dining room and living room? Would you be happier with an eat-in kitchen and a great room?” Before you head out on home tours, agents suggest making a list of your priorities, and only going to houses that have those features. Then go see the homes you liked again, this time getting past the love at first sight to consider what it’d really be like to live there.

5. Buying more home than you can afford

Many buyers wisely get pre-approved for a mortgage before they head out into the market. “When you are pre-approved, you are effectively a cash buyer,” notes Bill Pettinger, a realtor in Victoria. “This makes it much easier to negotiate.” But the mortgage isn’t the only cost to consider when figuring out a price tag you can swing. Are you planning to have kids, how many and how soon? Do you like to travel a lot? And will you have cash to support home ownership going forward? Beyond mortgage payments, there’ll be costs like insurance, maintenance and landscaping. You don’t want your home to deprive you of your lifestyle.

 

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