Six... WAIT ... Seven Big Mistakes New Home Buyers Can Make
by Phil Dekort
on Saturday, May 23rd, 2020 at 9:19am.
SIX nope SEVEN MISTAKES NEW HOME BUYERS CAN MAKE
#7 - Expecting to find EVERYTHING you ever dreamed of.
I just had to add this mistake to this post. I have had this experience come up a few times now and thought it is a good one to add here. You are so excited about buying a space to call your own. No one telling you what to do or when to do it! If you want to sit on your sofa and eat a bowl of whip cream for breakfast lunch and dinner, YOU CAN! So exciting! (I've done it, it was great! Until I looked in a mirror and had to buy a gym membership!) Doing your homework and shopping around online, looking at listings and going to show-homes, all good things to be involved in with such a big decision and knowing what you want. Even more important is knowing what you NEED. These two together can really muddy the waters and give un-realistic expectations of what you will get! I have had someone say no to house because there was no place to put counter stools, I have had someone say no to a house because of the casings and baseboards, I have had someone say no to a house because of a staircase railing! NOW, as your realtor I will point out that these are very small issues and really not un-fixable issues at that. I am not trying to put you in a home you do not want BUT I am not emotionally attached to these home or the ideals. I am the unbiased third party and I am here to help see past some of these minors and look at the majors. But these clients just could not get past these issues so and we moved on to the next house, and the next, and the next and the next... They soon began to see that when I was gently telling them that there list of 1000 wants were not all going to be found in one home that I was right and that they needed to start focusing on the bigger picture! Some people are so set on the vision in their head, that reality just won't ever measure up! My buyers expected that the perfect house was out there and was just going to be ready for them... This is not going to happen. You must look for a home that meets your fundamentals. The Pillars of what you need. Once you have found a house that reaches your needs and you buy it, you then work on making it the house you want!
#6 – Not Realizing the Additional Costs When Buying a Home
There are additional costs of buying a home. Wait…what?! Who knew?! Your Realtor, your mortgage broker, your home inspector, your lawyers… and now, you!
You always want a home inspection - even on new homes, and that will cost you about $500.
If you are buying a condo, you need to pay for the condo documents, and should pay a professional to review them.
One big one is closing costs. This is the payment of the lawyer's fees. This amount is dependent on the firm, but you don't want these to be a surprise in the end.
#5 – Deciding Against or Not Getting a Home Inspection
As mentioned in #6, you should always want a home inspection completed on the home you wish to purchase. The inspector should be an unbiased third party to the buyer and the seller, found by the buyer or recommended by your Realtor. This is not your cousin's friend who has grown up in a house his whole life and could help you at a discount. This should be a professional (who is certified, completed schooling and everything!). They know what they are looking at and for.
An inspection usually comes after the offer has been accepted. It is typically a condition for the sale of the home. This is NOT a tactic to get more money off the house, but part of the buyer's due diligence to ensure the home is up to code and current standards. This may uncover defects, either small or potentially detrimental to the home. This is also recommended for new homes. Many different trades work in many different houses. Just because it is new does not mean it meets all requirements. This, as a condition to the purchase of a home, will allow you to decline the purchase if the inspection isn't satisfactory.
#4 – New Homes Are Not Always Better!
In Calgary and surrounding areas, we have so many choices! New homes come with all the latest trends and designs, but a lot of the products can be marked up to cover many different costs - and you pay for all of them. It's not your fault. Who wouldn't be attracted to new, shiny and ready to move in? But buying your home should be an investment. It can be more cost-effective to find an older home with unique characteristics that can be updated.
We are flooded with home improvement, and design shows inspiring our creativity, giving us the opportunity to have unique homes. Don't discount a well-priced, older home that needs a little TLC! It will increase your investment once the work is done. There are many talented people out there who renovate old houses and bring them back to life with some excellent design CPR. That is not to say a new home doesn't suit your needs better, but just be open-minded! One thing to add to this that most people do not realize is that you should ALWAYS use a realtor even when buying a new home through a builder! They have their realtors, and sales people. These are people hired by the builder to protect their interests and get them the money they are looking for. Your realtor looks out for your best interests in this deal. A lot of builders have a cost built into the price of their homes whether you have a realtor or not, so either way you are paying that fee.
#3 – Don't Fall for Love at First Sight
You may fall head over heels for a home, and what's wrong with that? Well, love is blind! We've all been there. Instantly loving something can cloud your judgment. It can cause you to make rash decisions and not listen to those around you who have had experience with this. My mother had been right about the "boys I've loved." In hindsight, I should have always listened and saved myself the heartache and disappointment!
You may fall for the house that doesn't love you back. One minute it's there, and the next, POOF! It's gone to the pretty couple with more money and a nicer car! But really, you are never guaranteed to get the house you love. Stay calm, think with your head, not your heart. The heart comes later when you start making your house into your home!
#2 – Do you Have the Money to Buy a Home?
You need to speak to a mortgage broker. You is a professional who you need to speak with. You will tell them how much money you make and describe what current debts you have. They will then advise you if they can get you a mortgage, and what you pre-qualify for. This is still not a guarantee, hence the PRE-qualify! This pre-qualify amount should give you a good idea of where and what prices you should be searching for in a home. If you pre-qualify for $375,000 I would search homes under $400,000. Why? You must take into account what houses in the area are actually selling for. The list price is what the sellers are hoping to sell the home for or close to it. Houses could be selling in an area for $30,000 less then what people are listing their houses for. This is what is important to pay attention to.
If you get pre-qualified, then go out and buy that super awesome hot tub for the house you're eyeing, you may no longer qualify for the original amount you were advised. You can find a home, make an offer, and while you wait for conditions, spend $5,000 on your credit card or go buy a car, and you can sink any chance you've had to get that house. When looking for a home you want, be careful not to change your income or debt significantly. I have seen it done. P.S. – We have great mortgage brokers if you need one!
DRUM ROLLLLLLLLL PLEASE…
The Number One Mistake First Time Home Buyers Can Make…
#1 – Not Hiring a Real Estate Agent
We know you are smart. We recognize you know what you like. Buying your first home can be exciting, scary, stressful, and emotional. Having a professional who knows the contacts, the procedures, the market, and just having someone in your corner can make the difference between a great experience and inexperience!
Consider this, just because you watched hockey since you could walk, doesn't mean you're going to step out on the ice for the first time and be Wayne Gretzky (or for those not as old as me, Sydney Crosby). You have lived in a house since you were born, you drive past them every day, it's four walls and a roof. What's the big deal? Please trust me when I say there is more to it than most people think. We take most of the work off your plate, do what we went to school for, what we have worked for, and taken a profession in.
A Realtor should be someone you know, like, and trust. You may know one, but not like them. You may like one, but not trust them, and so on. But you should get one that wants to build a strong relationship with you for your needs now as well as in the future. This should not be a one and done relationship!
TNT Real Estate Pros has the experience you can trust. We are all real people, with families and friends. I can tell you; we are all very likable if you get to know us! You have to know someone to like and trust them. Don't be afraid to reach out or answer your phone if we're calling. Every friendship started with a small conversation, maybe a little small talk, feeling a little awkward, but it all starts somewhere. It makes a much better experience for you and for us!