Your home is likely your largest asset, so selling it may be the biggest financial move you’ve ever made, one that requires significant thought and strategy.  However, once you’ve entered the market, the process may move very quickly:  your property has the best chance to sell within its first seven weeks on the market.  Studies indicate that the longer a property stays on the market, the less it will ultimately sell for.  So, you need to ensure you’re ahead of the game.  Get your property into top selling shape before it hits the market in order to increase its chances of selling within the desired window of time and drawing top dollar.

Each homebuyer has different ideas of what will constitute the ideal home for them, these notions often based on particular aesthetic preferences.  But one thing that unites all potential homebuyers is the desire to find a home that is fundamentally sound—in areas beyond the immediate sweep of the eye—and that will provide a safe, comfortable, and efficient foundation for their life behind a new door. 

This is where the services of a home inspector come in.  During a home inspection, at least 30 areas of the home are placed under the home inspector’s “microscope.”  We’ve compiled the ten most common weaknesses uncovered in a typical home inspection.  If not addressed, these problems could cost you thousands of dollars in the long-run.  So, knowing what to look for, and performing your own thorough pre-inspection, will help you to identify areas for repair or improvement before they grow into costly problems.

1.      Damp Basement:

If a mildew odour is present, the inspector will be able to detect it, as this smell is impossible to mask or eliminate.  Mildew odour is often the first indication of dampness in the basement.  The inspector will also examine the walls, checking for any signs of whitish mineral deposit just above the floor, and will note whether you feel confident enough to store items on the floor.

Repairs can run anywhere from $200 to $15, 000, this cost ultimately influencing the calculation of your home’s value, so consider enlisting the help of an expert to ensure you have a firm grasp on the bottom line before moving forward with the sale of your home.

2.      Poorly Installed/ Defective Plumbing:

In older homes, plumbing problems and defects are very common.  The inspector will determine whether your home’s plumbing is subject to leaking or clogging.  Signs of leakage can be visibly detected.  The inspector will test water pressure by turning on all the faucets in the highest bathroom and then flushing the toilet.  If the sound of water is audible, this indicates that the home’s pipes may be too narrow.  The inspector will also check for signs of discolouration in the water when a faucet is first turned on.  The appearance of dirty water is usually an indication that the pipes are rusted—a water quality problem that should be dealt with immediately.

3.      Older/ Poorly-Functioning Heating and Cooling Systems:

Heating/ cooling systems that are older or haven’t been properly maintained can pose serious safety and health problems.  An inspector will determine the age of your furnace and, if it is over the average life span of a furnace (15-20 years), will likely suggest you replace it, even if it is still in good condition.  If your heating system is a forced air gas system, the heat exchanger will be examined very closely, as any cracks can result in the leak of poisonous carbon monoxide gas.  These heat exchangers are irreparable; if damaged, they must be replaced.  While replacing these components may seem expensive, a new system will yield heightened efficiency, reducing monthly heating/ cooling costs substantially, and benefiting your long-term investment.

4.      Older/ Unsafe Electrical System:

In older homes, it is common to find undersized services, aluminum wiring, knob-and-tub wiring, or insufficient/ badly-renovated distribution systems.  When an electrical circuit is over-fused, more amperage is drawn on the circuit than what the circuit was intended to bear, creating a fire hazard.  You’ll typically find a 15 amp circuit in a home, with increased service for larger appliances such as dryers or stoves.  If replacing your fuse panel with a circuit panel, expect a cost of several hundred dollars.

5.      Older/ Leaking Roof:

An asphalt roof will last an average of 15 to 20 years.  Leaks through the roof could be a sign of physical deterioration of the asphalt shingles caused by aging, or could indicate mechanical damage caused by any number of factors, such as a heavy storm.  If you decide your roof requires new shingles, you’ll first need to know how many layers are beneath, in order to determine whether the roof must be completely stripped before installing the new shingles.

6.      Minor Structural Problems:

Common in older homes, these problems range from cracked plaster to small shifts in the foundation.  While this variety of problem isn’t large enough to cause any real catastrophe, they should be taken care of before they grow.

7.      Poor Ventilation:

Unvented bathrooms and cooking areas can become breeding areas for mold and fungus, which, in turn, lead to air quality issues throughout the house, triggering allergic reactions.  Mold may additionally cause damage to plaster and window frames.  These problems should be identified and taken care of before any permanent damage is caused.

8.      Air Leakage:

A cold, drafty home can be the result of any number of problems, such as ill-fitting doors, aged caulking, low-quality weather strips, or poor attic seals.  This nature of repair can usually be taken care of easily and inexpensively.

9.      Security Features:

An inspector will look at the standard security features that protect your home, such as the types of lock on the doors/ windows/ patio doors, and the smoke or carbon monoxide detectors and where they’re located throughout the home.  Check with an expert if your home is lacking in any of these areas, in order to determine what costs to expect.

10.  Drainage/ Grading Problems:

This may be the most common problem found by home inspectors, and is a widespread catalyst of damp and mildewed basements.  Solutions to this problem may range from the installation of new gutters and downspouts, to re-grading the lawn and surrounding property in order to direct water away from the house.

Finding a real estate agent who is right for you requires doing a little homework, and asking the right questions.  Choosing an agent is a decision that could ultimately cost or save you thousands of dollars.  Keep in mind the individual you choose will be handling almost every maneuver in the biggest financial investment of your life.  Experience, interests, and expertise vary from agent to agent, so you should be asking very specific questions in order to align your own needs with the abilities of an appropriate representative.  Use the following list of questions as a guide to finding the agent that is right for you:

1. How long have you been involved in residential real estate in this area?

If the agent hasn’t been connected to the residential real estate market for several years, s/he will be out of touch with the cyclical nature of the current market.

Your agent must be familiar with trends of the local market and have an eye for the ways in which it will change.  This knowledge could mean the difference of thousands of dollars in the long-run. 

2. What is your marketing strategy for my home?

A realtor should be able to lay out for you, in detail, a marketing plan to sell your home.  Examine this plan carefully.  How much money does the realtor allot to advertising?  What type of media does s/he use?  S/he should be able to demonstrate the effectiveness of one form of media over another, explaining why his/her particular marketing strategy will sell your home faster and for top dollar.  The realtor should employ current, innovative marketing techniques that indicate creativity and a willingness to market outside of the box.  Stay away from realtors who rely on traditional, dated forms of advertising.  They simply won’t work in the current real estate market.

3. How do you support a buyer throughout the process?

A realtor should be able to indicate how s/he will support you through each step of the home-buying or selling process, offering you a unique system to suit your needs and goals.  Also, ask if a specialist will be available at each level of the sale.  Your realtor should always be on hand to answer questions, but the specific resources of an expert can be invaluable during different stages of the process.

4. What other properties has your company sold in my area?

The realtor should be able to provide you with a complete, detailed listing of their own sales in your area, as well as other comparable sales.  You should get a clear idea of what you might be able to expect both from the realtor and from the current market.

5. What is your experience with financing options?  How would you suggest I approach my own financing plan?

Each buyer requires a different financing strategy.  A realtor should be able to suggest a plan catered specifically to your financial background and needs.  Don’t just depend on your lender for information and guidance on financing a new home.  Let your agent lead the way.

6. On average, how close is the selling price of your listings to their asking price, and how long do they take to sell?

You can contact the Real Estate Board to obtain information on the selling record of an agent.  The Board also has statistics on a broader scale, so you can see whether an agent’s selling performance is higher or lower than the board average, and whether s/he tends to sell faster or slower than the board average.  Placing the realtor’s performance on a scale will help you get an idea of how much you might expect your home to sell for, and how long it might take to sell.

7. What is your philosophy/method of negotiation and how will you apply it when selling my home?

Your realtor should be able to articulate effective and informed negotiation tactics that demonstrate a commitment to securing the best price for you. 

8. Do you have a reference list of clients I could contact?

Do some homework!  Choose a few names on the list and call them.  The stories of others who have gone through the home-selling process can be a valuable source of information.

Budgeting for a new home can be tricky.  Not only are there mortgage installments and the down payment to consider, there are a host of other—sometimes unexpected—expenses to add to the equation.  The last thing you want is to be caught financially unprepared, blindsided by taxes and other hidden costs on closing day.

These expenses vary:  some of them are one-time costs, while others will take the form of monthly or yearly installments.  Some may not even apply to your particular case.  But it’s best to educate yourself about all the possibilities, so you will be prepared for any situation, armed with the knowledge to budget accordingly for your move.  Use the following list to determine which costs will apply to your situation prior to structuring your budget:

1. Purchase offer deposit.

2. Inspection by certified building inspector.

3. Appraisal fee: 

Your lending institution may request an appraisal of the property.  The cost of this appraisal is your responsibility.

4. Survey fee: 

If the home you’re purchasing is a resale (as opposed to a newly built home), your lending institution may request an updated property survey.  The cost for this survey will be your responsibility and will range from $700 to $1000. 

5. Mortgage application at your lending institution.

6. 5% GST:  this fee applies to newly built homes only, or existing homes that have recently undergone extensive renovations. 

7. Legal fees: 

A lawyer should be involved in every real estate transaction to review all paperwork.  Experience and rates offered by lawyers range quite a bit, so shop around before you hire.

8. Homeowner’s insurance: 

Your home will serve as security against your loan for your financial institution.  You will be required to buy insurance in an amount equal to or greater than the mortgage loan.

9. Land transfer (purchase) tax: 

This tax applies in any situation in which a property changes owners and can vary greatly.

10. Moving expenses.

11. Service charges: 

Any utilities you arrange for at your new home, such as cable or telephone, may come with an installation fee.

12. Interest adjustments.

13. Renovation of new home: 

In order to “make it their own,” many new homeowners like to paint or invest in other renovations prior to or upon moving in to their new home.  If this is your plan, budget accordingly.

14. Maintenance fees: 

If you are moving to a new condominium, you will likely be charged a monthly condo fee which covers the costs of common area maintenance.

When preparing your property to show, work your way from the outside in.  It is essential that your home possess a certain “drive-up appeal.”  Remember, a potential buyer’s first impression of your house is formed while s/he is still sitting in the realtor’s car.  So, first you need to view your house from this perspective.  Go stand on the opposite curb and observe your property.  Compare it to surrounding properties.  Concentrate on the following three areas:

Landscaping:

How does your landscaping measure up compared to the rest of the neighbourhood?  If you guess it would rate below-average, make a few adjustments.  You might want to consider buying some bushes and planting them around the property.  Do not buy trees, however—mature trees are expensive, so you will not see a return on your investment.  And immature trees don’t tend to significantly improve the immediate appearance of your home. 

If the problem with your yard isn’t a case of too little greenery, but rather too much, get out the pruning shears.  The purpose of landscaping is to complement the home, not hide it.  Overgrown shrubs should be sheared to a height near the bottom of the windows.  Remove any ivy clinging to the side of the house.  Tree limbs should be high enough that you’re able to walk beneath.  Trim any branches that bar the way.

Your lawn should be freshly cut and watered, and an even colour.  If there are brown spots, make sure you begin to remedy this well in advance of putting the house on the market.  You may want to re-sod areas, and you need to make sure these spots are given enough time to grow, so they will match the existing lawn.  Also, if you decide to use fertilizer, you’ll want to allow enough time for it to take effect.  Rake up any leaves or grass cuttings.

Planting a few flowers is an easy way to add colour and vibrancy to your yard, enhancing the first impression of your home.  Invest in a full flat of mature, colourful flowers, such as petunias or periwinkles, which last the length of the growing season.  Do not buy bulbs or seeds—they won’t necessarily grow enough by the time you begin showing to achieve the desired effect.  If you don’t have an area in which to plant flowers, consider purchasing a few flower pots for your porch and planting flowers or blooming plants.

If you have a pool, keep it sparkling and leaf-free.

House Exterior:

When you view your house from across the street, does it appear weathered or faded?  If so, it’s probably time to treat it to a fresh coat of paint.  This is usually a sound investment; new paint can do wonders to increase a home’s perceived value.

Stay away from unusual or loud colours.  The new colour should fit in with surrounding houses, and complement the style and structure of your house.

Examine the roof closely.  Old or leaking roofs should be replaced.  If there are leaks, you’ll have to disclose this detail to the homebuyer anyway, and they will want it replaced.  If there isn’t any apparent damage, however, wait for word from the home inspector before making repairs.

The Front Door and Porch:

The front door and surrounding area should look particularly fresh and welcoming, as this will be the buyer’s first up-close impression as they enter the house.  If you paint nothing else, at least give the door a new coat.  Replace the doorbell if it is broken and polish the door fixture until it gleams.  Wash the mail box.  Keep the porch swept and buy a new plush door mat.  All of these little things will contribute to the overall effect of a well cared-for and welcoming home.

When preparing your property to show, work your way from the outside in.  It is essential that your home possess a certain “drive-up appeal.”  Remember, a potential buyer’s first impression of your house is formed while s/he is still sitting in the realtor’s car.  So, first you need to view your house from this perspective.  Go stand on the opposite curb and observe your property.  Compare it to surrounding properties.  Concentrate on the following three areas:

Landscaping:

How does your landscaping measure up compared to the rest of the neighbourhood?  If you guess it would rate below-average, make a few adjustments.  You might want to consider buying some bushes and planting them around the property.  Do not buy trees, however—mature trees are expensive, so you will not see a return on your investment.  And immature trees don’t tend to significantly improve the immediate appearance of your home. 

If the problem with your yard isn’t a case of too little greenery, but rather too much, get out the pruning shears.  The purpose of landscaping is to complement the home, not hide it.  Overgrown shrubs should be sheared to a height near the bottom of the windows.  Remove any ivy clinging to the side of the house.  Tree limbs should be high enough that you’re able to walk beneath.  Trim any branches that bar the way.

Your lawn should be freshly cut and watered, and an even colour.  If there are brown spots, make sure you begin to remedy this well in advance of putting the house on the market.  You may want to re-sod areas, and you need to make sure these spots are given enough time to grow, so they will match the existing lawn.  Also, if you decide to use fertilizer, you’ll want to allow enough time for it to take effect.  Rake up any leaves or grass cuttings.

Planting a few flowers is an easy way to add colour and vibrancy to your yard, enhancing the first impression of your home.  Invest in a full flat of mature, colourful flowers, such as petunias or periwinkles, which last the length of the growing season.  Do not buy bulbs or seeds—they won’t necessarily grow enough by the time you begin showing to achieve the desired effect.  If you don’t have an area in which to plant flowers, consider purchasing a few flower pots for your porch and planting flowers or blooming plants.

If you have a pool, keep it sparkling and leaf-free.

House Exterior:

When you view your house from across the street, does it appear weathered or faded?  If so, it’s probably time to treat it to a fresh coat of paint.  This is usually a sound investment; new paint can do wonders to increase a home’s perceived value.

Stay away from unusual or loud colours.  The new colour should fit in with surrounding houses, and complement the style and structure of your house.

Examine the roof closely.  Old or leaking roofs should be replaced.  If there are leaks, you’ll have to disclose this detail to the homebuyer anyway, and they will want it replaced.  If there isn’t any apparent damage, however, wait for word from the home inspector before making repairs.

The Front Door and Porch:

The front door and surrounding area should look particularly fresh and welcoming, as this will be the buyer’s first up-close impression as they enter the house.  If you paint nothing else, at least give the door a new coat.  Replace the doorbell if it is broken and polish the door fixture until it gleams.  Wash the mail box.  Keep the porch swept and buy a new plush door mat.  All of these little things will contribute to the overall effect of a well cared-for and welcoming home.

If you are considering looking for a new house, and are a current home-owner, then chances are you’re wondering what your strategy should be:  do you wait to find the perfect new home before you put your current home on the market, or do you sell first and then look around?  You have a few options.  Use the following as a guide to explore what might be the best move for you.

Sell First:

There are several benefits to selling your current house before searching for your next home.  First of all, once you have sold your house, you will know precisely how much money you have to work with.  With a concrete price range, you’ll be able to narrow the pool of houses before you begin looking, and negotiate accordingly.  This will allow you to immediately make firm offers on houses that you are serious about purchasing.  You can be first in line with an unconditional offer you know you can afford, and this will grant even further negotiating leverage as Sellers tend to take unconditional offers more seriously.  When they counter or turn down an offer that’s conditional on the sale of a home, they usually think the Buyer will come back with a better and more firm offer once they have sold their current home.  However, if you make an unconditional offer, the Seller will usually give you more consideration, as they realize you’re probably looking at other properties and will move on if your offer is rejected.  Likewise, if you have already sold you house, you probably do have a wider opportunity to look around, negotiate, and find the best deal and fit for you and your family.

The flip side of this scenario, however, is that if you don’t find the right property before the closing date of the house you’ve already sold, you may have to look for temporary housing until you do find what you’re looking for.

So, before you opt to sell first, you should determine whether you have alternate, temporary options, in case you have to move from your house before you’ve found a new one. How would you and your family deal with living in a transition home for an undetermined period of time?

Buy First:

Buying a new house without having sold your current home may occur if you are interested in a specific property and will only sell your current home if this property comes on the market.  It may be a matter of timing—grabbing hold of the home before it’s too late.  The same might be said of a property you haven’t had you eye on previously, but that catches your attention due to its uniqueness or unbelievable price.  If buying first means you don’t miss out on the real estate opportunity of a lifetime, it may be the best move.

However, be careful. If you buy another property and aren’t able to sell your current home quickly enough, you could end up having to finance both homes and shoulder the extra debt until you sell.  You can get a financial appraisal or market evaluation of a home prior to selling, but this doesn’t guarantee the price you’ll ultimately receive for the home after the negotiation process has run its course.  Since your selling price will be an unknown, jumping into a purchase could be a gamble, particularly if your budget is tight. 

Make sure you’re familiar with all aspects of the financial reality this scenario would create before you purchase another home.  You may be faced with owning two homes at once.  What type of financial stress would this bring to your life and how would you deal with it?  Consider the fact that if your current house doesn’t sell quickly enough, you may be forced to sell it off at a reduced price in order align the closing dates of your two properties.  What effect would this have on your financial situation?

Conditional Offer:

An additional option involves making your offer to purchase conditional upon the sale of your current property within a specified period.  Conditional offers usually include a clause that allows for the Sellers to keep their property on the market and remain open to other offers while you try to sell your home.  If the Sellers receive another attractive offer before you’ve sold your home, they may accept and ask you to either remove your condition and firm up your offer, or to back down from the offer.  A conditional offer forms a kind of middle ground, an area of compromise, for those who are afraid to sell or buy first—but doesn’t hold the advantages of the other two options.

One of the drawbacks of the conditional offer is that Sellers tend to take them less seriously.  They definitely give stronger consideration to firm offers.  This leaves you with less negotiating power.  In fact, some Sellers will simply turn down or counter a conditional offer.  Other Sellers will believe the Buyer will come back with a more serious offer when their home has sold.  So, you may end up having to increase your offer in order to have your conditional offer accepted and keep your foot in the door of your desired house. 

Even if your conditional offer is accepted, there is no guarantee another Buyer won’t step in and overthrow your offer before you have sold your current home, which would put you back at the starting line.  Also, consider the fact that you cannot withdraw your conditional offer until the end of the period specified in the contract—which means that if a better deal comes along, you will have to wait to jump at it. 

Setting a realistic price for your home that reflects current market values will help sell your home quickly and for top dollar.  When you price your home properly, you increase the chances that the offer you receive will nearly match your asking price, and that there will be competing offers—which may net you even more in the long run. 

Your property has the best chance of selling within its first seven weeks on the market.  And, studies indicate that the longer a property stays on the market, the less it will ultimately sell for.  A property priced 10 % more than its market value is significantly less likely to sell within this window than a property priced close to its actual market value.  About three-quarters of homes on the market today are 5-10 % overpriced.  Sellers will usually over-price their homes by this margin if, either, they firmly believe the home is worth more than what the market indicates, or if they want to leave room for negotiation.  Either way, if you choose to over-price your home by this amount, you run the risk of increasing the amount of time your home spends on the market, and decreasing the amount of money you’ll ultimately receive. 

At the other end of the selling spectrum are houses that are priced below a fair market value.  Under-pricing often occurs when the owner is interested in a quick sell.  You can bargain on these homes attracting multiple offers and ultimately selling quickly at—or above—the asking price.

The knowledge and skills of an experienced Realtor will be invaluable when determining an appropriate asking price.  It is the job of your Realtor to know the current market and market trends inside and out, to be closely connected to the real estate market at large, and to be aware of other properties currently for sale in your particular area.  Based on this range of connections and knowledge, your Realtor should counsel you on how to price your home properly in order to attract the highest price possible, in the shortest period of time.

Before approaching this process, you should first do some homework yourself.  You’ll need to know the workings of the current market before you even begin to think about setting an asking price.  The market will always influence a property’s value, regardless of the state of a home, or its desirability.  Here are the types of market conditions and how they may affect you:

1. Seller’s Market:

A Seller’s market is considered a “hot” market.  This type of market is created when demand is greater than supply—that is, when the number of Buyers exceeds the number of homes on the market.  As a result, these homes usually sell very quickly, and there are often multiple offers.  Many homes will sell above the asking price.

2. Buyer’s Market:

A Buyer’s market is a slower market.  This type of market occurs when supply is greater than demand, the number of homes exceeding the number of Buyers.  Properties are more likely to stay on the market for a longer period of time.  Fewer offers will come in, and with less frequency.  Prices may even decline during this period.  Buyers will have more selection and flexibility in terms of negotiating toward a lower price.  Even if your initial offered price is too low, Sellers will be more likely to come back with a counter-offer. 

3. Balanced Market:

In a balanced market, supply equals demand, the number of homes on the market roughly equal to the number of Buyers.  When a market is balanced there aren’t any concrete rules guiding whether a Buyer should make an offer at the higher end of his/her range, or the lower end.  Prices will be stable, and homes will sell within a reasonable period of time.  Buyers will have a decent number of homes to choose from, so Sellers may encounter some competition for offers on their home, or none at all.

Remember, a Realtor is trained to provide clients with this information about the market, helping you make the most informed decision possible.  The right Realtor will guide you through the ups and downs of the market and keep you up-to-date with the types of changes you might expect. 

Evaluate your house in the other main areas that affect market value:

1. Location:

The proximity of your home to amenities, such as schools, parks, public transportation, and stores will affect its status on the market.  Also, the quality of neighbourhood planning, and future plans for development and zoning will influence a home’s current market value, as well as the ways in which this value might change. 

2. Property:

The age, size, layout, style, and quality of construction of your house will all affect the property’s market value, as well as the size, shape, seclusion and landscaping of the yard.

3. Condition of the Home:

This includes the general condition of your home’s main systems, such as the furnace, central air, electrical system, etc., as well as the appearance and condition of the fixtures, the floor plan of the house, and its first appearances.

4. Comparable Properties:

Ask your Realtor to prepare you a general market analysis of your neighbourhood, so you can determine a range of value for your property.  A market analysis will provide you with a market overview and give you a glimpse at what other similar properties have been selling for in the area.

5. Market Conditions/ Economy:

Selling your home is a complex process that can be stressful and time-consuming.  An experienced Realtor has the knowledge, skills, and connections to help you through the process every step of the way.  Consider the following benefits of working with a Realtor:

Professional Experience:

With knowledge and training in marketing strategy, negotiation tactics, and the workings of the current real estate market, a Realtor will be able to guide you through the steps of the home-selling process and be able to explain exactly what to expect.  S/he will make you aware of your rights and responsibilities, work with you to strategize the best moves according to your own goals, discuss financing options, and point you in the direction of other specialized professionals who will aid you in different stages of the process.

Best Price:

Realtors have their fingers on the pulse of the current real estate market, and will know what comparable properties in your area are selling for.  They have the resources and knowledge to establish the best asking price and to attract the highest selling price.  With access to their company’s professional marketing resources and connections, they will ensure potential buyers are immediately made aware of your home and market the property to sell as quickly as possible and for the most money.

“Showcasing” Experience:

Your Realtor will know the importance of a property’s first impression.  S/he will have experienced first-hand, for example, the impact a property’s “drive-up appeal” has on the rest of a potential Buyer’s experience of your home.  Your Realtor will be able to offer you tips and information on how to get your home in the best selling shape possible, in order to sell your property quickly and for top dollar.

Access to Qualified Buyers:

Realtors save time and effort by dealing only with qualified buyers.  They have access to a pool of pre-screened and pre-qualified buyers who are serious about buying a home in your neighbourhood.  Realtors work hard to develop this base of qualified buyers which will become an invaluable resource for you.

Negotiation Skills:

Realtors serve many functions, but perhaps the most important is their role as primary negotiator on your behalf.  Your Realtor realizes your goal is to sell your home as quickly as possible, and for the most money possible, and will work closely with you during the negotiation process to facilitate this goal.  Realtors bring to the process the knowledge and skills to draw up legally binding contracts, to assist in negotiating offers and counter-offers, and to offer counsel and perspective as you work toward your selling goals.

8 Mistakes to Avoid When Buying a Home

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.

1. 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 easier. 

2. 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. 

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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 particular situation.