Shopping for a new home is an exciting, but daunting experience. Especially if it’s your first time.
It’s easy to get caught up in the thrill of having big dreams, high expectations, and endless choices—sometimes a little too easy. The obvious pitfalls are usually the ones overlooked in the buying process.
As eager as you are to just jump right in, there are some things to think about before you sign those papers.
Read on to get to know the most common real estate mistakes before considering that home.
1. Looking at Houses You Can’t Afford
If you know you can’t afford it, save yourself the misery and walk right past it. Getting your heart set on something you can’t pay for will only make it harder to find something else. No other house will compare and you’ll likely feel like you’re “settling”.
What’s even worse—buying a house you know you can’t afford. Before you even start looking at houses, do your homework. Calculate your income to debt ratio, get pre-approved for your mortgage, and do your research. Locking yourself into payments you can’t really afford will leave you house poor. Or worse, you just won’t be able to keep up the payments and will be forced to sell.
Prepare yourself by knowing ahead of time how much you can designate toward your monthly mortgage payment. And remember, even if you get pre-approved for a higher amount, that doesn’t mean you’ll be able to afford it. Stick to your budget to avoid future disappointment.
2. Skipping the Home Inspection
You found the house of your dreams, there’s multiple offers, and you don’t want to miss out because of an inspection contingency. But skipping the home inspection is one of the biggest mistakes you could make as it could cost you so much more in the future.
- Unknown safety hazards: Electrical, fire, and carbon monoxide hazards
- Hidden costly repairs or replacements: Roof problems, plumbing or HVAC issues, foundation and slope concerns, signs of potential environmental issues such as mold growth or asbestos
- Advice about future expenses so you can properly plan your budget: If a home is selling at a lower price but will need major repairs in the coming years, this is something you should be well prepared for
- What you can use as a bargaining tool: Not only does a home inspection give valuable insight into the true condition of a house, it can help you negotiate the final selling price. Use what you find on the home inspection to help justify a lower offer
3. Failing to Do Proper Research
- Why is the homeowner selling?
- Are there any known problems in the house?
- Does anything need replacing?
- Are there any permit issues?
- What reputation does the neighborhood have?
- Will long-term construction happen in the area anytime soon?
- Is the property considered a flood zone or problematic area?
- If the property is in a new town for you, are there any problems in town you should be aware of?
Have a serious chat with your realtor and find out as much as they know. Google can be your best friend when searching the area for known problems or risks. There’s no such thing as a stupid question when you’re about to make one of the biggest investments of your life.
4. Not Considering All Responsibilities That Come With Owning a Home
- House taxes
- Utility bills (water, electricity, hydro)
- Pleasure expenses (cable, internet, alarm)
- Upkeep expenses. Roofs leak. Foundations crack. Appliances don’t last forever. Home repairs and appliance replacements can be costly and shouldn’t be overlooked
Owning a home is a huge financial responsibility you may not be ready for. Make sure you consider all expenses before buying a house.
5. Not Saving Enough For a Down Payment
The standard amount for a down payment is 20%. Most people don’t save up enough to do that. Especially first-time homebuyers who usually put down about 5%.
- A smaller mortgage
- More equity in the home
- Lower payments
- A lot less interest over the duration of the loan
The Takeaway: Preparation Is Key
Going in unprepared can leave you feeling vulnerable, especially knowing how a single mistake can be a costly one. Having a trusting relationship with a good realtor is the first step in creating the ultimate home-buying experience.
If you’re looking for someone to walk you through this intimidating process, get in touch. I’ll help you navigate through the toughest questions and make the experience as seamless as possible for you.
Hi, I’m Joel, a real estate professional based in Toronto.
My approach is simple—I put you first. I believe in open communication, total transparency, and meaningful results. I’ll guide you through the real estate process, market values, and always keep the focus on you—and your needs.