As a first-time homebuyer, things can get confusing. With talk of offers, mortgages and equity, you might feel like running from the entire process. But, it really doesn’t have to be that hard, as long as you don’t make these ten common first-time homebuyer mistakes.
1. Using your heart and not your head
When you ask someone why they bought a home, you want to hear that it was because it was the right price and in the right location. You don’t want to hear that they bought it because it “felt like the right one”. Sure, you are going to have some “feelings” towards a home you may have “fallen in love with”, but you should always do your research and use your head when buying your first home. Ask yourself if you can afford it, if it’s in a location that is conducive to work and play and if it is a sound home (and you know this because you did an inspection).
2. Not using a real estate professional
Especially when buying your first home, but pretty much in most cases, buyers should be using real estate agents. They’ve got your back through the entire process, can steer you away from homes that just aren’t suitable and can get you the best deal on your home purchase. The best part is – you don’t have to pay them a cent. The buyer’s real estate agent fees are paid by the seller. Get an agent.
3. Not choosing the right agent
But, don’t just get any agent. Do your research and find an agent that is going to look out for your best interest. Interview a few real estate professionals and ask them pertinent questions like how long they’ve been in the business, how well they know the area and what their schedule is like for showing you homes.
4. Not researching the neighbourhood
Where you buy a home is probably the most important decision out of all the decisions you make when buying your first home. You need to consider what your commute to work will be like, what sort of schools are in the area (if you have kids), what sort of transportation is around and what other amenities you’ll need in a neighbourhood or city. It is up to you, and not your agent, to figure out if your neighbourhood meets your needs in terms of safety and friendliness to your situation (i.e., family friendly, single friendly, dog friendly, etc.).
5. Being too picky
Most first-time homebuyers have grand dreams of their first home, but quickly come to the realization that you aren’t going to get everything you want the first time around. In our current seller’s market, buyers are having to sacrifice the things they truly want in a home (space, move-in ready, updated) just to get into a home they can afford. Have a vision of what your home can be, and look for good potential.
6. Not being picky enough
On the other hand, don’t choose a home that needs extensive renovations and believe that you’ll be able to move in and do them right away. If a home has obvious structural issues, mould or is in a bad location, you might want to see what else there is before jumping in.
7. Not knowing what you can afford
Before you contact a real estate professional to help you find a house, you need to have some parameters set around what you can afford. You will do this by getting a pre-approval from a qualified lender who will give you an idea of how much they’ll lend you and you can tailor your purchase price around this. Knowing what you can afford will give the best idea on what range of homes to look for so you don’t waste your time looking at ones you’ll never be able to buy.
8. Not thinking about the future
You will probably live in this home for at least five years, so consider where you’ll be in five years. Will you have kids? Will you have a spouse? Will you change jobs? All of these factors need to be considered when buying your first Markham home.
9. Committing to more than you can afford
While your lender will only lend you what you can typically afford, only you know what your budget is like. Perhaps you have an unquenchable shoe fetish and *need* to buy expensive shoes every week. Switch that around to your daily coffee habit or your once a week bar nights. While you may have to sacrifice things from your budget in order to buy a home, be realistic about what you will actually do so you don’t get yourself into a pile of debt after buying your first home.
10. Not considering closing costs
Many first-time buyers think that all they need to buy their Markham home is a 5% down payment, but don’t forget the cost of closing, which can be from 1-3% of the total purchase price. Leave yourself a good buffer for legal fees, land transfer taxes, utility hookups and moving costs.
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