What are some of the mistakes that homes buyers often make?
#1. Not Getting Pre-Qualified for a Mortgage
What is the risk of not being pre-qualified? It is a good idea to pre-qualify with your bank or mortgage broker before shopping for the purchase of your new home. You can save hours of searching for homes in the wrong price range or worse, purchasing a home and then having the deal collapse because you don't qualify for financing...Heartbreaking. Sometimes people misunderstand the difference between pre-qualifying and a rate hold. The lender can preapprove you with a given rate, but they will still need to assess the home to guarantee the mortgage. Pre-qualifying eases your mind, helps narrow your search criteria and most importantly, gives your RE/MAX agent a negotiating edge by being able to satisfy the seller's concerns over financing. This can mean the difference between a rejected and an accepted offer.
#2. Not Shopping For Mortgage Terms
Rates are sometimes negotiable! Banks will sharpen their pencils to get your business especially if you have a good credit rating and bring other business to them such as your Registered Retirement Savings or other accounts. Posted rates should be viewed as a place to start. You need to know what the best rate is and this is usually done by getting competitive quotes. Also, ask whether the bank will cover appraisal fees, and about buy-out fees, penalties, payment options, portability etc. The time spent can save you thousands of dollars over the life of the mortgage.
#3. Not Getting Professional Inspections
You don't want to purchase a home and later find out that there are latent or patent defects. What is a latent defect? A latent defect is something you can't see and is typically included on the property disclosure statement. However, if the person writing the property disclosure statement has never lived in the house, they may not know of any hidden defects? What is a patent defect? A patent defect is an obvious defect. The seller does not need to point out the patent defects because they ought to be obvious. The potential for these defects is why you want to obtain an inspection by a qualified inspector. Obvious or not obvious, an inspector with a trained eye can help you identify any areas that you ought to be concerned about.
Some types of properties will require additional inspections, like septic, water quality, electrical, or geotechnical. In a well written contract, inspection deficiencies may enable you to renegotiate the purchase price. If the inspection identifies deficiencies, you may be able to negotiate the purchase price to cover required repairs or make your satisfaction of the inspection subject to the homeowner remedying the problem. I can advise you on inspections you should consider and help connect you to the resources that you need.
I can help you find someone you can trust to do a thorough job. This is a big investment and you need to know what you are purchasing with obvious or hidden defects.
#4. Not Using A Professional Real Estate Agent.
Your RE/MAX agent can help you make a purchase with the least amount of problems. He or she can ensure the price you pay is market value. They can offer expert advice on what to look for, conditions to include, negotiation strategy etc. After all, they work for you.
#5. Buying First Before Selling
If price is important to you, you should sell your present home before buying another. There was an exception to this a couple of years ago. People in the Victoria market, sold their homes without a place to go to. Prices rose dramatically and they were left out of the market. However, when there are more homes on the market than are selling, it is important to know how much you have available to spend on a new place.
If you are in the position of having sold your home, it may allow you to place fewer conditions on your purchase and increase the likelihood that your offer will be accepted. With fewer conditions, you have more room to negotiate on the price.
Everyone's situation is different, so in a contract, it is important to add conditions that give you peace of mind. Whether it is selling on the condition that you find an acceptable place to purchase, or buying on the condition that you sell your home. In some circumstances, these clauses are not necessary and a qualified REALTOR® will help you determine what is best for your situation.
#6. Not Knowing The Full Cost Of Home Buying
If you are not aware of the costs involved with the purchase of a home, you will be playing catch-up from the beginning of your purchase. Know all the costs associated with your purchase including legal fees, transfer tax, property taxes, new home landscaping, fencing, appliances and/or window coverings.