Selling your home?

You need these reports!

27 Home Selling Tips
Highest Price for Your Home
Selling in a Divorce
Pass Your Home Inspection
Quick Over the Net Evaluation
Your House Didn't Sell?
Legal Mistakes to Avoid
The Sellers Lawyer
Home Down the Street
Moving With Pets
Selling Your Home Yourself
Trade up Mistakes to Avoid

Buying in London?

Become VIP Buyer
Distress Sale Homes
Home Buying Mistakes
London House Listings

20 Home Buying Mistakes to Avoid

Buying a home is a process not an event, and it is a big experience in our lives that is usually a straightforward process but to avoid troubles that other buyers have experienced, here some common pitfalls and ways to avoid them.

1. Choosing the wrong Realtor. You would not meet your doctor for the first time at the entrance to the operating room nor would not meet your lawyer for the first time at the entrance to the courtroom so you should not meet a Realtor at the front door of the house you want to see. It doesn’t cost you any more to have an experienced Realtor than one who is inexperienced so ask your friends and family for referrals and check around for Realtors who are active in your marketplace. Ask questions about of the Realtors, do they work on their own or as part of a team that has a systematic approach to the buying process? Are they full-time or part-time Realtors? How many transactions did they have in the last year?

2. Not knowing who is on your side. Is the real estate salesperson working for you or for the seller? Is the bank’s representative looking out for you? When you select a real estate sales person, you are entitled to receive the undivided loyalty of the real estate brokerage and its sales representatives. You should be informed at the beginning of the relationship about the service and loyalty limitations that may arise during the relationship.

3. Not Obtaining a Mortgage Pre-approval before looking at homes. Without knowing that you can obtain financing and how much you can afford, you cannot make a decision and will be “just spinning your wheels” when you look at homes.  A pre-approval puts you in a position of strength when negotiating with a seller. Make sure you get a pre-approval and not just a pre-qualification when you talk to a lender.

4. Not knowing what costs, in addition to the down payment, you are required to pay.

5. Not checking out the neighbourhoods where you want to live or where the homes you can afford are located.  You are buying the neighbourhood as much as you are buying the house. Are there industrial sites in the neighbourhood, does the street have lots of traffic at times other than when you saw the home? Where are the parks and schools? Pending developments? Brownfields?

6. Not having a home inspection or inspection of specific components included in your offer. Inspections are a “second set” of eyes looking at the home for your benefit and they will help you to avoid unforeseen surprises.

7. Not shopping for your mortgage. Different lenders have different mortgage options and rates. Insure that you have the best financing strategy by shopping the market before you make an offer.

8. Not reading the documents before signing them. Ask your Realtor for copies of the Purchase and Sales Agreement and other documents in advance of making an offer so that you have time to become familiar with the contents and to ask questions. Real estate contracts are detailed so take the time to understand what you are agreeing to because assumptions about what is meant, poorly written clauses, missing clauses, and failure to address your needs can lead to unexpected consequences or you being unable to negotiate the sale. Timing is everything in an offer and if conditions are not waived or actions completed on time, your offer could fail and then the seller would be free to deal with another buyer.

9. Relying on verbal agreements. The purchase and sale of real property can only be done with a written agreement. Make sure your written agreement includes all verbal promises or representations that were made to you. Get it in writing!

10. Offering the wrong price. Become familiar with recent market activity in the neighbourhood that is around the home you want to buy. Have your Realtor show you the listings for similar properties that recently sold as they will tell you what these houses offered, how long they were for sale and what price was received. The features of nearby homes will affect the value of your home. The most expensive homes on the street may have a lower value because of cheaper homes on the street, while lower priced homes may benefit from being in a neighbourhood of higher priced homes.

11. Picking the wrong house. You are wowed by the décor and the staging of the home and are keen to make an offer, and you forget the need for two bathrooms or that in a short time the house will be too big or too small for your needs resulting in the expense and inconvenience of another move. Make a list of priorities or “must haves” and only look at homes that have these features. This will keep you focused on what is important to you. When you find homes that interest you, go back for a second look and spend the time to really check them out before making an offer.

12. Missing an opportunity. When the market is hot, you need to be ready and able to recognize a good deal and be prepared to act quickly. Shopping around might mean that the perfect house is sold before you get back to it. If you see something that you really want, be ready to go for it.

13. Not acknowledging that there always will be another home. A wise home buyer knows there will be another home and if a deal can’t be reached or a home is sold before and offer can be made, just move on and keep looking.

14. Buying more home than you can comfortably afford. The mortgage payments are only part of the cost of owning and operating a home. What about taxes, utility costs, maintenance, insurance, landscaping, condo fees? What else do you like that will use part of your income; travel and kids? You don’t want to be spending every available penny on the home so determine in advance how much of your monthly income you can comfortably spend on housing and buy accordingly.

15. Incurring additional debt after the mortgage pre-approval was obtained. How much debt you have at the time of the pre-approval is a factor in determining how much you can borrow to buy a house. If you then take on more debt before the purchase is complete you might not qualify for the financing you need and be unable to complete the sale. This could result in you being sued by the seller. Don’t buy anything on credit after you receive your mortgage pre-approval and if there is any question about your financing, have it checked before you make an offer to buy a home!

16. Not reading the closing documents. Schedule a time a day or two before the closing to meet with your lawyer to review the closing documents. Make sure the mortgage amount and the interest rate, and the terms of the mortgage are what you expect, that the names of all the buyers are on the documents. Missing a closing date because of a last minute snag could jeopardize a mortgage interest rate or result in additional costs. Make sure that there is enough time between the acceptance of the sales contract and the closing date that any investigation, approvals or other work can be completed on time.

17. Disclosing information to the seller that might put you at a disadvantage when negotiating the purchase. Gushing over a home while at an open house and in the presence of the seller’s representative may tip your hat to the seller because the seller’s representative is required to disclose such information to their client.

18. Not understanding what effect competing offers from other buyers can have on the way a buyer’s offer is prepared and negotiated.
    
    
    

19. Not thinking about re-sale. The day will come when the house will be sold so paying attention to the neighbourhood and the desirable features of the home will help you avoid a buying mistake.
    
    

20. Not including a pre-delivery inspection in the offer. This is your opportunity to make a final check on the home before the closing and to confirm any work the seller agreed to do is done and done satisfactorily. If there are serious concerns you will have time to speak to your lawyer about how to respond before the money has changed hands.