You’ve been saving for awhile, weighing your options, looking around casually. Now you’ve finally decided to do it
—you’re ready to buy a house. The process of buying a new home can be incredibly exciting, yet stressful, all at
once. Where do you start?
It is essential you do your homework before you begin. Learn from the experiences of others, do some research.
Of course, with so many details involved, slip-ups are inevitable. But be careful: learning from your mistakes may
prove costly. Use the following list of pitfalls as a guide to help you avoid the most common mistakes.
- Searching for houses without getting pre-approved by a lender:
Do not mistake pre-approval by a lender with pre-qualification. Pre-qualification, the first step toward being pre-
approved, will point you in the right direction, giving you an idea of the price range of houses you can comfortably
afford. Pre-approval, however, means you become a cash buyer, making negotiations with the seller much
- Allowing “first impressions” to overly influence your decision:
The first impression of a home has been cited as the single most influential factor guiding many purchasers’
choice to buy. Make a conscious decision beforehand to examine a home as objectively as you can. Don’t let the
current owners’ style or lifestyle sway your judgment. Beneath the bad décor or messy rooms, these homes may
actually suit your needs and offer you a structurally sound base with which to work. Likewise, don’t jump at a
home simply because the walls are painted your favourite colour! Make sure you thoroughly the investigate the
structure beneath the paint before you come to any serious decisions.
- Failing to have the home inspected before you buy:
Buying a home is a major financial decision that is often made after having spent very little time on the property
itself. A home inspection performed by a competent company will help you enter the negotiation process with
eyes wide open, offering you added reassurance that the choice you’re making is a sound one, or alerting you to
underlying problems that could cost you significant money in both the short and long-run. Your Realtor can
suggest reputable home inspection companies for you to consider and will ensure the appropriate clause is
entered into your contract.
- Not knowing and understanding your rights and obligations as listed in the Offer to Purchase:
Make it a priority to know your rights and obligations inside and out. A lack of understanding about your
obligations may, at the very least, cause friction between yourself and the people with whom you are about to enter
the contract. Wrong assumptions, poorly written/ incomprehensible/ missing clauses, or a lack of awareness of
how the clauses apply to the purchase, could also contribute to increased costs. These problems may even lead
to a void contract. So, take the time to go through the contract with a fine-tooth comb, making use of the resources
and knowledge offered by your Realtor and lawyer. With their assistance, ensure you thoroughly understand every
component of the contract, and are able to fulfill your contractual obligations.
- Making an offer based on the asking price, not the market value:
Ask your Realtor for a current Comparative Market Analysis. This will provide you with the information necessary to
gauge the market value of a home, and will help you avoid over-paying. What have other similar homes sold for in
the area and how long were they on the market? What is the difference between their asking and selling prices?
Is the home you’re looking at under-priced, over-priced, or fair value? The seller receives a Comparative Market
Analysis before deciding upon an asking price, so make sure you have all the same information at your fingertips.
- Failing to familiarize yourself with the neighbourhood before buying:
Check out the neighbourhood you’re considering, and ask around. What amenities does the area have to offer?
Are there schools, churches, parks, or grocery stores within reach? Consider visiting schools in the area if you
have children. How will you be affected by a new commute to work? Are there infrastructure projects in
development? All of these factors will influence the way you experience your new home, so ensure you’re well-
acquainted with the surrounding area before purchasing.
- Not looking for home insurance until you are about to move:
If you wait until the last minute, you’ll be rushed to find an insurance policy that’s the ideal fit for you. Make sure
you give yourself enough time to shop around in order to get the best deal.
- Not recognizing different styles and strategies of negotiation:
Many buyers think that the way to negotiate their way to a fair price is by offering low. However, in reality this
strategy may actually result in the seller becoming more inflexible, polarizing negotiations. Employ the knowledge
and skills of an experienced realtor. S/he will know what strategies of negotiation will prove most effective for your