First-Time Home Buyers Should Avoid These Common Mistakes

Posted by Ryan Dutka . on Tuesday, March 7th, 2017 at 11:25am.

“Home is the nicest word there is,” wrote Little House on the Prairie author, Laura Ingalls Wilder. For many first-time home buyers in Edmonton, though, home is more than a word—it’s a hope and a dream, a place where you’ll be investing not only your hard-earned money but your future as well. For some, a first-home may be a stepping stone to greater things, while for others it becomes a place to start a family or a new job. Regardless, though, it’s easy to get swept away.

Young home buyersRemember—alongside the long list of exciting features that you’ll find in the Dutka Team’s real estate listings—all first homes come with pitfalls. When you’re just starting out, it can be difficult to know what’s required of you, and it’s definitely tempting to follow your heart instead of your wallet. Go ahead and dream big, but make sure you’re prepared for the realities of the Edmonton real estate market. With that in mind, here are five common mistakes that first-time buyers—or anybody looking to buy, really—should watch out for.

Failing to Secure Pre-Approval

“Where’s the logical place to start your home search?” When asked this question, most new home buyers will say you should begin by looking at homes. But, outside of a little curious browsing, you’re likely setting yourself up for disappointment if you don’t seek pre-approval first.

There are a few reasons for this. First, you’ll want to know what you can actually afford, making it possible to adjust your expectations before you fall in love with that 5,000 square foot lakeside mansion. Second, some sellers won’t even want to show their home to buyers who haven’t been approved. Seeking pre-approval shows them that you’re serious about buying a new home. Finally, preapproval can take time, so getting the process started in advance will protect you from offers from buyers who are more prepared than you.

Spending Too Much

Nobody’s asking you to surrender your enthusiasm, but it’s quite common for first-time buyers to get wrapped up in finding the perfect home, which is often also a home that they cannot possibly afford. Keep in mind that just because you’ve been pre-approved for a big loan, doesn’t mean you have to use it all.

Don’t rely on the banks to tell you what you can afford. Before you buy, make sure that you have a good sense of your budget. Subtract all other costs—vehicles, credit card payments, groceries, insurance, student loan payments, etc.—from your take-home pay to figure out how much you can afford.

And don’t forget that homes always come with hidden costs. If you’ve been a renter all your life, you may not be prepared for property taxes, heating bills, renovations, and unforeseen costs that come from maintaining property. If a pipe bursts or the water heater gives up the ghost, you’ll want to be able to comfortably pay for repairs.

Skipping the Inspection

With all the expenses that come with buying your first home, you may be tempted to skip the extra cost and time of hiring a home inspector. Don’t. Hiring a fully certified inspector will help you avoid getting stuck with maintenance issues that you can’t afford.

A pre-purchase home inspection, for the record, generally takes around 3 hours and costs under $500, far less than the cost of regrading a foundation,  replacing your shingles, or rewiring the home—all common issues uncovered by inspections.

Not Investigating the Neighbourhood

Is that beautiful dream home surrounded by noisy industrial buildings? Will your front lawn attract sleepy drunks stumbling home from the pub around the corner? Swept away by the emotions of finding their first home, it’s easy for buyers to forget to check out the surrounding area. Make sure you do your research about the neighbourhood before you make a decision—talk to the neighbours, check online message boards, and investigate crime stats and nearby amenities.

Be sure to plan for your future as well as your present. One day, your toddler may be heading off to high school, for example, and having one nearby might save you a lot of time and money.

Failing to Negotiate

The final stages of a new home can be so anxiety producing that many new buyers rush to close rather than negotiating. Remember, it’s not only the price that can be negotiated, but other factors like fixtures, home repairs, closing dates, and much more. Sometimes a seller will be rigid about one factor, but entirely willing to negotiate when it comes to something else. When it comes to buying a new home, there’s no substitute for having an experienced REALTOR® on your team, one who has your best interests at heart. 

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