6 Mistakes Home Buyers Make

Mistake #1.  Not Getting Pre-Qualified for a Mortgage

Before looking for your next home take the time to get pre-qualified by the bank or mortgage broker you choose.  This can save you hours of searching for homes in the wrong price range or worse, purchasing a home and then finding out you don’t qualify for financing.  Pre-qualifying gives you peace of mind, helps narrow your search criteria and most importantly, provides me with a negotiating edge of by being able to alleviate the sellers concern over financing. The latter is especially important should a competing offer surface.

Mistake #2.  Not Shopping For Mortgage Terms

Rates are negotiable! Banks will sharpen their pencils to get your business especially if you have a good credit rating and bring other business to them e.g. RRSP’s, general account, savings etc. Posted rates should viewed as a starting point. You need to know what the best rate is and this is usually done by get competitive quotes. Also, ask whether the bank will cover appraisal fees, and about buy-out fees, penalties, payment options, portability etc.  The time spent can save you thousands of dollars over the life of the mortgage.  Your mortgage broker is especially aware of these provisions and can advise as to which institutions offer the best terms suiting your qualifications and the type of property you are purchasing on Salt Spring.

Mistake #3.  Not Getting Professional Inspections

Nobody wants to purchase a home only to find out later there are defects, latent or otherwise.  Ensure you obtain inspections where needed e.g. home inspection, structural engineer, insect, radon etc.  If the inspection identifies deficiencies you may be able to negotiate the purchase price to cover required repairs or make your satisfaction of the inspection subject to the homeowner remedying the problem. I am happy to advise you on what kinds of inspections you should consider and provide you with a list of inspectors.

Mistake #4.  Not Using A Professional Real Estate Agent.

A real estate agent can help you make a purchase with the least amount of problems.  He or she can ensure the price you pay is market value.  They can offer expert advice on what to look for, conditions to include, negotiation strategy etc. After all, they work for you.  

Mistake #5. Not Knowing The Full Cost Of Home Buying

Know all the costs associated with your purchase.  ESPECIALLY the Property Purchase Tax.  Also Consider the following costs:   legal fees, property taxes, new home landscaping, fencing, appliances, window coverings.

Mistake #6. Buying First Before Selling or Selling before Buying!

I will assist you in Choosing the Best Strategy for you!

If price is important you may wish to sell your present home before buying another.  It has the advantage in letting you know exactly how much money you will have available for your next purchase.  Selling your home first allows you to place fewer conditions on your purchase which makes your offer more attractive to a seller.  They often will demand more money to take a “subject to” offer which takes their home off the market.  The other advantage is if you find a terrific house, chances are others will also find it attractive and you stand to lose it if you can’t make an unconditional offer.

On the other hand, given market conditions, (and scarcity of listings that suit your needs) you may wish to "find the new shoes before you part with the old shoes". If you can afford to own two houses at once there are some risks of market change.  We should discuss what the market is doing at the time of your purchase.  

You may also wish to consider selling your house with a provision that allows you to rent it back for up to a year (with specific lease terms), that allows you to move with 30 days notice to the new owner, when you find the place you wish to move to.  

These are important discussion to have and I look forward to sharing different options with you for your consideration.

Jan Macpherson
Jan Macpherson
#104, 150 Fulford Ganges Road Salt Spring Island BC V8K 2T8