Purchasing property is a major step! One must be well prepared to ensure that everything goes according to plan and, most importantly, without regret. The following 7 mistakes to avoid will make sure you start off the process on the right foot and enjoy the experience.
Future buyers may commit the error starting to visit houses before determining their needs. And yet, this step would help them target at the outset which residences would be most suitable, saving them a lot of time.
Start by compiling a list of your priorities, like a garage, a pool, proximity to services or a certain number of bedrooms, then do the same with the features which are not essential to your happiness. And don’t lose sight of these objectives!
Another way future buyers waste time is touring properties without a preapproved mortgage. In fact, some sellers may even refuse to sign a promise to purchase if the buyer does not have official and up-to-date proof of a preapproved mortgage.
This is a document stating how much the bank is willing to lend you to acquire a property. To get one, simply go to your financial institution which will determine the amount based on your financial situation.
It should be noted that the preapproval process can take a few days and you will have to provide lots of information and several official documents, such as a proof of income and proof that you have the down payment.
Even though a preapproved mortgage is a strong indicator of what you can afford in terms of real estate, your financial advisor is not aware of every one of your expenditures. You should make you budget yourself so you can be certain your desired property won’t become a financial liability down the road.
Moreover, future buyers must not forget expenses such as the welcome tax, notary fees, municipal and school taxes, and condo fees, as applicable, or even the moving fees.
It is likewise necessary to take into consideration possible mortgage interest hikes due to inflation, especially in a volatile market.
If you need some assistance, your broker can help you easily assess your financial situation by using the GDS (gross debt service) ratio.
Another potential mistake is not reading the Declarations by the seller, or to simply skim the text. This document contains the property for sale’s complete history, like renovations, water damage, etc. It is therefore essential and allows you to get a clearer picture of your future home. You might even decide to not submit a promise to purchase after reading it.
If you are working with a broker, they will be able to highlight this document’s important points and explain them to you.
Sometimes falling in love with a particular house is ill-advised! It may not meet your needs, require more renovations than you can afford, be less practical than an alternative residence, etc. In short, the important thing is to visit a few properties before submitting a promise to purchase.
Future buyers must follow their head, not just their heart!
In a seller’s market where many buyers may be interested in the same property, some buyers make the mistake of trying to accelerate the process by signing promises to purchase while forgoing the inspection. On occasion this decision can turn into a nightmare. What if the inspector discovers several thousand dollars’ worth of damage? You might then be able to renegotiate the price or simply walk away.
A pre-purchase inspection is essential, in any context, and even if the residence was recently constructed. The few hundred dollars it costs are definitely a worthwhile investment!
If you are getting ready to purchase a property, contact a RE/MAX broker who can guide you through the process and therefore help you avoid potential pitfalls.