Buying a house is amongst one of the biggest investment decisions that someone can make. Thus avoiding common mistakes is important to ensure the success of your purchase. Common mistakes that house buyers might make are mainly mortgage or not using a real estate agent, where actually a buyer’s agent’s job is to give service to the buyer and listing agent’s job is to give the service and get the most amount of money for the sellers.
Thus going to a listing agent to find a deal is one of the biggest mistakes that house buyers make, along with not having a mortgage pre-approval in place when shopping around for houses. A Top Toronto real estate agent can help house buyers in Toronto to get their dream house while avoiding those common mistakes.
1. Not Having a Clear Budget
The right budget is not what banks think you can afford to pay. It is possible that you are not comfortable with spending that much money. Having a very clear budget in your mind is important. Do not rely on the bank to tell you how much you can afford to spend. Create your budget by listing all the monthly expenses, including the rent in it, cost of using vehicles, loan payments if you have any, payments of credit cards, insurances, savings, etc. Subtract this amount from the take-home pay and you will know the exact sum of money you can afford to spend.
By knowing the exact budget, you will be able to hunt for houses that are within your price range. By not knowing the budget you will waste your time on properties that you cannot afford. It is possible that you end up investing in a place that you cannot afford. This can cause a lot of financial problems for you.
2. Skipping the Qualification of Mortgage
Before you make an offer on a home, it is important that you have a pre-approved loan. You should know whether you qualify for a loan or not. Every loan has its requirements, for example, if you are applying for a reverse mortgage, you should have all the reverse mortgage information. It is important that the money the bank is lending you matches with the offer you are making for a house. The bank can reject or decrease the loan if you have poor credit or unstable income which can cause problems if you have already made an offer.
It is important to be careful even if you have a pre-approved mortgage as it is possible for it to fall through because of any significant change in the credit score. If the deal falls through, you will have to forfeit a lot of money, and it can be a major financial setback.
3. Not Considering Added and Hidden Costs
Buying a house is not as simple as it looks. There are so many things that you have to consider. It is not just a simple act of moving from rent payments to paying the mortgage. There is the closing cost, insurance of homeowners, property taxes and the homeowner’s association fee. Most of the home buyers have all the major costs in mind, but they fail to consider hidden costs such as the maintenance cost. It is possible that when the added and hidden costs are included, the house becomes over budget. That is why it is important never to forget the hidden costs.
4.Not Shopping Around
While you should be realistic in your search, and willing to compromise to some degree, don’t cave on important things.
For example, don’t get a two-bedroom home when you know you’re planning to have kids and will want three bedrooms. By the same token, don’t buy a condo just because it’s cheaper than a house if one of the main reasons you’re over apartment life is that you hate sharing walls with neighbors. It’s true that you’ll probably have to make some compromises to be able to afford your first home, but don’t make a compromise that will be a major strain.
Unless you are a high-end buyer looking at custom homes, chances are that for any home you find that you like, there are quite a few others that are close to it. Most neighborhoods have multiple homes that are similar or the same model; they may have all been constructed by the same builder. Even if you can’t find an identical model for sale, you can probably find a house with many of the same features. If you’re considering a condo or townhouse, the odds are also in your favor.
Being open to continuing your search will save you from making rash decisions you might regret later.
5.Not Using an Agent
Once you’re seriously shopping for a home, don’t walk into an open house without having a real estate agent or broker. Agents are held to the ethical rule that they must act in both the seller and the buyer’s best interests. But you can see how it might not put you in the best bargaining position if you start dealing with a seller’s agent before contacting one of your own.
6.Ignoring the Neighborhood
Don’t just focus on the residence—look at the surrounding area. It’s impossible to perfectly predict the future of your chosen neighborhood, of course, but inquiring about or researching its prospect now can help you avoid unpleasant surprises down the road.
Some questions you should ask include:
- What kind of development plans are in the works for the neighborhood?
- Is the street likely to become a major street or a popular rush-hour shortcut?
- Is there talk of a bridge or a highway to be built very nearby in five years?
- What are the zoning laws in the area?
- Is there a lot of undeveloped land around? What is likely to get built there?
- Have home values in the neighborhood been declining or rising?
If you’re happy with the answers to these questions, then your potential house’s location can keep its rose-colored luster.
