#1 Shopping before getting pre-approved ~
I know it's very exciting when you start thinking about buying a new home, especially when it's your 1st but it's very important to know what your price range is for several reasons.
(i) You don't want to fall in love with a home that you are ultimately not going to be able to buy. Ugh!
(ii) You want to be respectful of other people's time. Whenever a seller has a scheduled appointment they have to clean up the house and then go somewhere for at least an hour. It can be quite disappointing when the seller is informed by their realtor that the people who looked at their property couldn't actually afford it in the first place. Wouldn't you feel the same?
(iii) You will be in a better negotiating position if you have already been pre-approved.
#2 No List ~
Put together a precise list of needs and wants. Without it you're a swaying reed. Your needs are critical based on your lifestyle but your wants are non essentials. Needs can't be bargained with but wants are icing on the cake. Having this list will help to keep the "wants" in their proper place. You don't want to end up buying a home because you fall in love with thoughts of basking in the sun beside your swimming pool while you need 4 bedrooms and 2,000 sqft of living space and you settled for 2 beds, a small den and 1,300 sqft of living space.
#3 No Realtor® ~
Now why in the world would anyone buy a home without proper representation from a professional? With such a large purchase that doesn't seem to make any sense. Here in BC it's almost always the seller who pays the commission anyways.
Your Realtor® can...
(i) give you valuable advice on the market value of the property you're looking at.
(ii) Protect your interests as a buyer by writing contracts in your favor.
(iii) Negotiate on your behalf.
(iv) Check the title and charges against title
(v) Recommend professional reputable inspectors, mortgage brokers, lawyers/notaries etc.
BTW ~
Don't even consider buying a "for sale by owner" without the assistance of a Realtor®. In almost every case, the seller is asking too much for their property. It's a well known fact amongst Realtors® that one of the worst things you can do is put a buyer and a seller in the same room together. Their negotiating positions typically go right out the window. They tend to get emotionally involved and the buyer quite often ends up paying more than they should have simply because they didn't want to offend the seller.
Here's a testimonial from some clients of mine who paid me directly for my services when I helped them with the
purchase of a "for sale by owner" ...
"Dan, Mike & I just wanted to thank you for all your hard work in helping us with the sale of our home and the purchase of a new home. We never thought we'd ever consider using a realtor to help us with buying a "for sale by owner" but we sure are glad we had you represent us with that. It felt great to know that we were weren't overpaying and that we were so well protected against the unforseeables. This has been a real eye opener for us. We could both also tell right from the start that you cared more about making sure we were happy than you did about earning a commission! We also REALLY appreciated you keeping us up to speed with what was happening every step of the way and returning our calls promptly. We will definitely be sending all our friends and family your way! Thanks again,
Mike & Joanne Van Giesen"
#4 No Inspection ~
Ahhhhhh! Please don't do that to me. You're giving me a heart attack! It is crazy not to do an inspection all for the sake of saving $300-$400 on a $300,000 or more purchase? As a Realtor® representing buyers there have been numerous cases where I have negotiated a lower price due to a problem discovered through an inspection. A new roof could cost you $5,000 -$10,000 or a failed septic system could end up costing you $5,000 - $25,000. It makes good business sense to spend a few hundred dollars so that you know exactly what you're buying. People will think nothing of spending hundreds of dollars protecting their furniture with warranties. A home is a far greater investment... protect yourself!
#5 Unexpected Costs ~
Make sure you know what all the costs are with buying a home. Your Realtor® and your mortgage broker can help you with that as well. A few to consider are...
(i) Property Transfer Tax (1% on the 1st $200k and 2% of the balance of the purchase price)
(ii) Possible GST (Particularly on new construction)
(iii) Legal fees
(iv) Surveys or title insurance
(v) Strata fees (If you're in a condo or townhouse or strata complex)
(vi) Property Insurance & Mortgage Insurance Premiums
#6 Losing out on your Dream Property ~
This one can really hurt and could give you a bad case of the "woulda, coulda, shouldas". Really important again to make sure you communicate clearly with your Realtor® what your objectives are. If your Realtor® is any good they will be more interested in helping you get what you want then anything else. When you come across your dream property it's important to remember that timing is everything. Don't doddle too much because if the property is as good as you think it is you can bet your bottom dollar that someone else is likely to feel the same. Make your offer promptly and use every ounce of your Realtor's® negotiating skills to get an accepted offer on the table as soon as possible. Why is it important to get an accepted offer on the table right away? Because once there is an accepted offer in place... you get 1st dibs. In other words, a seller can only entertain one accepted offer at a time. When you have an accepted offer the seller is contractually bound by that offer until such time as you neglect to do what you said you were going to do in the offer.
