Buying a home is a very complex process. Mistakes will be made. there are many ways you can possibly go wrong.
Buying a first home is something that the majority of people do. Currently nearly 70% of Canadians own their own home. Congratulations. Home ownership is one of life’s great achievements.
I have long thought that we should have in high school mandatory courses in how to live life. The course would include:
- How to save and manage money
- How to decide on a career
- How to buy a home…
We don’t have that course (yet) so here are 5 mistakes that many first time homebuyers make. Maybe you can try to avoid them.
Five mistakes that many first time home buyers make
1. Going solo = big mistake
We live in a DIY culture and frankly with the internet – Googation, Googlepedia, dubious social media advice and Youtube University, there isn’t much we don’t think we can do, (and often we can, or can’t). And with searching for a new home, many people start out alone but thankfully find help along the way. If you are trying to buy a house, you need professional help. Don’t waste your time on Kijiji. Don’t deal directly with the private home sellers or with the listing agent. You can do better. Face it. You don’t know what you don’t know. You can do it yourself, but you will do better with an agent at your side.
2. Know your budget
Before you get serious about buying a home, please talk to your lender. They will put you on the right track. They will let you know what your budget parameters are, which will help you from searching for homes that you cannot afford.
Often, lenders will tell you that you are richer than you think.
3. Home is where the neighbourhood is
You are not only buying a home, you are buying a neighbourhood. It is crazy to get drawn into buying a beautiful home with fatal neighbourhood flaws, but it happens all the time. You can change your home, but you cannot change your neighbourhood. Consider the big three of buying good property
- Neighbourhood and schools
- Transit and transportation networks
- Shops and public amenities
4. Keep your credit score high
Don’t do anything that will impact your credit score before closing on your home. That means, do not buy a car with a payment schedule. Do not quit your job. Do not open a line of credit. Furthermore, do not start buying furniture for your new home. Do not apply for any new credit cards. It is of the topmost importance that your lender knows that you have the ability to pay the mortgage. Don’t do anything that will harm your ability to do that.
5. Stay focused and rational
Don’t allow yourself to be manipulated by well staged homes, model homes with all of the upgrades, or even urgencies created with high pressure multiple offer situations. Stay cool. Stay focused. Don’t allow yourself to get too emotional. There are always other houses, other deals, other days…
Don’t be fooled by ‘lipstick on a pig’. Look past the glitter. At the same time, sometimes you have to look past the superficial flaws to the ‘bones’ of the home, the neighbourhood, school and nearby amenities.