How to avoid the most common buyer errors
Shopping for a new home is an emotional experience. It is also time-consuming and comes with a myriad of details. Some buyers, however, get caught up in the excitement of buying a new home and tend to overlook some items. Their home purchase turns into an expensive process. These errors generally fall into three areas:
Paying too much
Losing a dream home to another buyer
Buying the wrong home
When you have a systematic plan before you shop, you will be sure to avoid these costly errors. Here are some tips on making the most of your home purchase:
Bidding without sufficient information
What price do you offer a seller? Is the seller's asking price too high? Is it a deal? Without research on the market and comparable homes, you could lose thousands of dollars. Before you make that offer, be sure you have researched the market. A REALTOR® can offer an unbiased opinion on the value of a home, based on market conditions, condition of the home and neighborhood. Without knowledge of the market, your offer could be too much. Or worse, you could miss out on a great buying opportunity.
Buying a mismatched home
What do you need and want in a home? Sounds simple. Yet, clearly identifying your needs and bringing an objective view to home shopping leaves you in a better position. Sometimes, home buyers buy a home that is too large or too small. Perhaps they did not consider the drive to work, the distance to school, or the many repair jobs waiting for completion. Plan ahead. Use your needs list as a guideline for every home you view.
Before you sign any document, be sure the property you are considering is free of all encumbrances. As part of their services, REALTORS® can supply you with a copy of the title to ensure there are no liens, debts, undisclosed owners, leases or easements.
Before the purchase is completed, an updated survey is essential. This report will indicate boundaries and structural changes (additions to the house, a new swimming pool, neighbour's new fence which is extending a boundary line, etc.).
For $300 - $500 a professional inspector will conduct a thorough inspection of the home. This way, you will have an idea of the cost of future repairs. Make the final contract subject to a favourable report. [See my blog articles on home inspection: "Questions Buyers Ask, Part 4: Home Inspection" and "Should I Get a Home Inspected Before Purchasing It?"]
Shopping without pre-approval
It only takes a few hours to get mortgage pre-approval. When you are shopping for a home, this gives you more power. A seller is more likely to consider an offer from a serious buyer.
Remember additional costs
Besides the funds for the purchase of a home, you’ll need funds for items such as loan fees, insurance, legal fees, surveys, inspections, etc. [See also my blog article "Questions Buyers Ask, Part 2: Home Purchase Costs".]
Rushing the closing
Before you sign, ensure that all documentation clearly reflects your understanding and conditions of the transaction. Has anything been forgotten? Don’t rush. You could lose money, financing or even the sale.