Working with home buyers is a deeply satisfying experience. There are few things I enjoy more than sharing in a buyer’s excitement as they tour a property that looks like it could be “The One.” Of course, finding that perfect home is just the first step of the process —securing it is the second, and that can infinitely trickier!
The good news? Knowing what to expect and being prepared will help make sure that once you find your future home you can make it yours. Here are five major home-buying blunders—and how to avoid them…
1) Not understanding the financing process
All too often, buyers don’t familiarize themselves with the mortgage financing process. By knowing what to expect—and preparing accordingly—you can help ensure that your purchase goes smoothly.
First off, obtaining pre-approval is a must. This crucial step, which entails having a lender determine how much financing you’ll likely receive, can help you budget moving forward (among other benefits). Be aware that the sum you’re pre-approved for shouldn’t necessarily be your ceiling during the home hunt. Remember, you’ll also have some closing costs to cover—which will include land transfer tax and lawyer fees as well as any any adjustments to the purchase price (for instance if the seller has paid their property tax or maintenance fees in advance).
Another thing to keep in mind: when it’s time to make an offer, your lender will have the property appraised. If the value is determined to be lower than the amount you’ve bid, you’ll have to make up the difference to complete the deal.
Of course, these aren’t the only financing considerations to be aware of. In general, you should make sure that all documentation is completed in a timely manner—and be prepared to meet any last-minute requests from your lender.
2) Failing to set the right criteria
There’s no getting around it: the Toronto market can be expensive. It’s true that some properties are more affordable than others, but many buyers don’t take the time to choose the most appropriate search criteria for their budget.
Let’s say you’ve been dreaming of a Victorian-era detached home in Trinity Bellwoods. For many buyers, this type of property will be financially out of reach. Fortunately, a townhouse in an up-and-coming neighbourhood with a similar vibe could also be a fantastic (and less expensive) match.
With so many beautiful homes on the market, it’s easy to fall in love with living spaces outside of your price range. Take it from me—doing so will only end in disappointment. Instead, familiarize yourself with local real estate prices, create a realistic home-type and location criteria, and remain open to your agent’s expert advice.
3) Being overly picky
To say a home is a big investment is an understatement. The living space you choose can have a major impact on your quality of life, so it’s only natural that you want to get it right. That said, there’s a big difference between knowing what will work for you and having expectations that don’t jibe with the homes that are for for sale in your price range.
In a hot market like Toronto, you might not find the absolute perfect home in your all-time favourite neighbourhood. Unfortunately, if your standards are unrealistic, you may wind up passing on properties that you could be very happy with and miss a chance to get a foot hold in this fast moving real estate market.
To find the right balance, adopt a flexible mindset. I suggest separating your must-have features and amenities from those that aren’t deal breakers. Be open to your agent’s suggestions. A property that needs a few cosmetic changes down the road could be your dream home, and that up-and-coming community might already be home to some amazing future neighbours and friends!
4) Hesitating to make a decision
Whoever said “slow and steady wins the race” wasn’t talking about Toronto’s housing market. In this city, indecisiveness can cost you. It’s competitive out there, to put it mildly. Multiple bids and preemptive offers aren’t uncommon, which is why I always advise clients to act fast when they find a great property!
Of course, it’s natural to feel nervous about rushing into a purchase. The good news is, you can do your due diligence while also taking quick, decisive action. For example, there are situations where reading a pre-listing inspection report (as opposed to insisting on bringing in your own inspector) can speed things up. In general, an experienced agent can advise you on how to make an offer that’s as timely as it is low-risk.
5) Going it alone
Most buyers understand the value of working with a true real estate professional. Of course, there are also those who believe they’ll be just as successful on their own. My advice? Think twice about diving into the process without expertise on your side.
In truth, we agents provide the guidance buyers need at every step. We draw on resources and industry connections you can’t access. Our experience with sellers allows us to help you to craft an offer that’s competitive yet fair. And when it’s time to negotiate, we use our in-depth market, neighbourhood and pricing knowledge to advocate on your behalf.
Buying a home can be exciting, but you’re bound to encounter some potential pitfalls along the way. Fortunately, with a bit of careful planning and some advice from an experienced real estate professional, you’ll be well on your way to a successful purchase!