There is a long to-do list that should be completed when buying a home for the first time, but most people wouldn’t know about it unless someone told them. In today’s world, homes can be bought easily through the click of a button, but the to-do list, if anything, has only gotten longer when using independent services instead of a realtor. Three realtors, and a representative from the online estate agent platform Purple Bricks, compare their top mistakes that buyers make when purchasing a home for the first time.
Featuring: Brittany Bekkers (EXIT Realty), Randall Weese (Purple Bricks), Rony Rizk (Ottawa Property Shop), and Sam Moussa (RE/MAX Absolute)
1. Not Getting Pre-Approved
All four agencies agree that the top mistake they see with prospective buyers is not being pre-approved for a mortgage before browsing homes. “Though a pre-approval isn’t a guarantee that you’ll get a mortgage when you’re ready to buy, it’s the best first step. Starting a home search before knowing how much you can realistically afford can save you a lot of time and heartache,” says Randall Weese of Purple Bricks. “Your local lending institution can provide you with written preapproval for you at no cost and no obligation, and it can all be done quite easily over-the-phone,” says Rony Rizk of Ottawa Property Shop. Some agents won’t even let you in the door without a pre-approval, and prospective buyers oftentimes don’t have a realistic expectation of what their mortgage will be, so it’s best to get it sorted out before looking. “Rather than fixating on mortgage rates, it is crucial to inquire about mortgage penalties, prepayment maximums, and the fine print,” says Brittany Bekkers of EXIT Realty Matrix. These will factor into your overall costs and affect the realistic number that you can pay towards your mortgage each month.
2. Buying At The Top Of Your Budget
Three of the four agencies listed this as one of the most common mistakes, with the fourth listing this more broadly. “Even though you may be pre-approved for a certain mortgage loan amount, it doesn’t mean you should buy a home at the top of your budget. Before you start looking, work out your monthly expenses with the added expense of a mortgage and new projected home bills (like property taxes) for homes at varying price points,” says Weese of Purple Bricks. ‘Buying at the top of your budget’ means purchasing a home that uses up the entirety of your mortgage and housing allowance. By doing so, the buyer fails to take into account other costs such as “lawyer fees, title insurance, moving expenses, and adjustments,” says Bekkers. Other costs can occur after the sale, including maintenance, renovations, utilities, contract breaches, or landscaping, which should all be considered when determining your budgets. “You do not want to be house poor and paying more than you can afford,” says Sam Moussa of RE/MAX Absolute. In a more broad sense, buyers should not think that they can cut corners in other areas of their lives to make up for an unanticipated hike in housing costs.
3. Getting Too Emotional
The third most common mistake that realtors see for first-time buyers can easily be solved through the use of a real estate agent. The Ottawa housing market is particularly ferocious, and so it is easy to invest all your time, hopes, and dreams into one property only to have it taken by another offer. “Too many first time buyers get attached or invested in a home and in a multiple offer situation, they may not be awarded the purchase and get discouraged,” says Moussa. Becoming too emotionally-invested in a property can make it difficult to honestly assess whether or not the property is right for you, and can become more emotionally draining with every failed offer. “Create a criteria wish-list with the genuine expectation that you will have to sacrifice particular items,” says Bekkers on how to avoid this. “If a house doesn’t meet your must-have criteria, eliminate it as an option. If it does, see how it ranks against other homes in terms of nice-to-haves. That’ll help you make choices based on what really matters to you and will keep you from becoming overwhelmed during your home search,” says Weese.
