What are the top mistakes people make when buying a home?
The following are the most common mistakes people make whenever they are on the quest of buying the home they desire. If they avoid them, they will eventually end up making the best decision and eventually end up buying the best house, loft or a condominium.
1. Infatuating about a residential property that is expensive and not affordable
A problem buyer often fall into is falling in love with a home they cannot afford. It’s not just the looks, it’s the aesthetics, functionality, features, and layout along with the strength and structure of the home.
They then start daydreaming about how their life would be in that home, infatuating about those lovely clean tree-lined streets, the large bathtub, the big spacious kitchen, theatre-like living room, spacious gym with pool, spacious parking and a view of Lake Ontario right from the bedroom balcony.
Sounds dreamy indeed, but do buyers often wonder how its price tag sounds like? This could cost C$2.5 million. Yes, such kind of a condo is expensive. If buyers cannot (or will not) be able to afford it, they are hurting themselves by imagining themselves in it.
In order to overcome this, buyers should look for houses and condos that are in their budgetary range. They should start searching from the lower end of their budget and go up top slowly. If they find what they are looking for, they do not need to search for an expensive option.
They must keep in mind that when they pay extra for a home, they are also paying in the interest which can be double the amount or more over the life of their loan. It is best that they avoid paying extra and put that money for more productive use.
2. Thinking that there is no variety in the market
Unless buyers are high-end buyers looking at customized homes, chances are that there quite a few others resembling their choice. A lot of neighborhoods have many homes that are of the same model and they also have homes that were made by the same construction company.
Even if buyers cannot find an identical model of a home for sale, they will probably find one with almost the same features. If buyers consider either a townhouse, a condo townhouse or a condo, they have the odds on their side.
If buyers have a long list of features they demand, there are a lot of homes out there that can meet their needs. The same goes for condos. If the home they desire has issues like repairs needed, damaged roofing, price rigidness or a difficult date of possession, then buyers must move on to the next option.
They should widen their search options and prevent themselves from making a bad buying decision.
3. Desperately attempting to buy a home
The current conditions of Toronto’s housing market are expensive, exorbitant and tough. Prospective buyers are easily outmatched, outwitted and outbid by other buyers on the homes they want to buy. This then makes the buyers desperate to get a home in their budget in the fastest possible time frame.
However, if buyers move in a home they eventually start hating, the costs to get rid of it will be high. How? Buyers eventually have to pay an agent their commission (which is 5-6% of the sale price). They will also end up paying closing costs for the mortgage on their new home (whether its an apartment, loft, condo or house). Buyers also must deal with the painstaking process of being on the move again.
If buyers decide to try making the best of what they have instead of moving out then they must understand how expensive, time-intensive and cumbersome renovation is. If they have time, then it is understandable to wait for a suitable option.
As long as the buyer’s demands are realistic within the budget, they are bound to have something worth everything in time.
4. Ignoring major flaws in a home
Considering the above factors, buyers can be tempted to overlook any major issues the residential property has. If they have a time crunch and have the budget, then it can be difficult for them to control the desperation in buying a particular property, given Toronto’s current conditions. It even becomes difficult in ignoring major flaws that property has.
Buyers must carefully evaluate their options before making a commitment and should wait for a better option. A lot of new listings for houses and Toronto condos come in daily.
5. Buyers often overestimate their craftsmanship
Buyers often overestimate their own craftsmanship and skills when it comes to time, money and ability in getting the repairs done by themselves. If the repairs buyers think they can make in their new home easily then they need to calculate the costs again.
If buyers plan to move in a home that is not ready yet from any major repairs, it will be more costly than the original price due to costs of labor, extra material, and other unforeseen occurrences. Thus, they should buy a home with all the works completed on time.
6.Buyers rushing to place an offer
It might be needed to pull the trigger early in a tough market, especially when buyers find a home they like the most. However, they must balance the need to make a quick decision with the need to make the right purchase decision.
Buyers should not neglect important steps when buying a home. They should check the neighborhood, how well are its standards, how safe is it and in what proximity are important markets and amenities. Taking time in considering the purchase decision gives buyers more time to research both the neighborhood and the property.
7. Waiting too long to make a purchase
It is a tough act to make a sound decision but often people take too much time in making it (especially prospective home buyers). Losing out on a home a buyer intended to purchase can lead to a definite heartbreak and also bring in economic consequences.
For most individuals (salaried, self-employed and retired included), time is money. The more time & energy they use in searching for home leaves them with less energy and time for work.
It would be best for buyers to not drag their purchase decision in the home purchase process. Home shopping can be time-consuming, but they must also pull the trigger at the right time when needed.
8. Offering quite a lot than the asking price
In an intensely competitive market, it is easy for buyers to get dragged in a bidding war. Trying to evade a bidding war through bully offers or by offering a higher price can be costly too.
If the home does not appraise at or above the amount the buyer offers, the bank won’t give them the loan unless the seller reduces the price or buyers pay cash for the difference in amount. If this happens, then any shortfall in the bid in comparison to the mortgage must be paid solely by the buyer out of their own finances.
Similarly, in terms of selling the home; its market conditions are what they are or worse than what they were when a person purchased the home, they may find themselves in a conundrum regarding the mortgage and be unable to sell it.
Buyers must ensure that the purchase price for the home they purchased is reasonable for both the home and the home’s area by checking similar sales of homes nearby and the realtor’s opinion before they make an offer.
Buying a home is a monumental decision and emotions getting involved in it is a natural process. Buyers should ensure that they always make the most rational decision instead of getting carried away by emotions. They should make a property purchase that is good for both their feelings and their budget so they can live comfortably and soundly in the long run.