The perils of buying your first home

First time home buyers

Buying your first home can be as exciting as it is intimidating. Your home-to-be is where you will put down roots, start a fresh chapter in your life that may include starting your family. But it’s also likely the biggest financial commitment you will ever make.

First home keys

Learning about potential pitfalls, and how to avoid them, is a good first step as you go down the home buying journey. Here are a few key pitfalls to avoid.

Ignoring the fine print in contracts

With all of the paperwork involved with buying a home, you may start to feel like a celebrity who’s signing stacks of autographs. But just because real estate contracts aren’t as exciting, doesn’t mean they aren’t critically important. Once you sign on the dotted line, you’ve locked yourself into a legally binding contract. This holds true for any Buyer Representation Agreement you sign to work with a real estate professional, or Agreement of Purchase and Sale to make an offer on a property. If you’re not sure about something in a contract, ask questions and take the time to understand what it is you’re agreeing to.

Getting caught up in the frenzy

Many areas of the province are experiencing a sellers’ market. This means there are more buyers than homes available for sale, which can result in multiple offers on a single home or homes that sell very quickly. Losing out on a couple of homes you like can be upsetting and may have you thinking that it’s now or never when another home comes up for sale. But, going over your budget or making other rash decisions can hurt you in the long-term. As hard as it can be, sticking to your budget and keeping a cool head will help you have a positive buying experience.

Removing conditions from your offer

Not only can a multiple offer situation heighten your desire to go over budget on a home, you may also be tempted to make other concessions. Removing conditions from your offer, such as financing or a home inspection, could make your offer more attractive to the seller. But, not taking advantage of conditions can also leave you vulnerable. You may find yourself unable to secure a mortgage or on the hook for thousands of dollars in unexpected repairs that a home inspection could have potentially caught. Before deciding to remove conditions, consider whether you can afford to take the risk should something go wrong.

Assuming that what you see is what you will get

As you walk through an open house, the vintage dining room chandelier and stainless steel appliances may catch your eye, but you can’t assume they come with the home. The seller may want to take their light fixtures and appliances with them to their next home. And, other items in the home, such as the furnace and water heater might be under a rental contract that you’ll be required to take over. Before making an offer, ask your registered real estate professional to detail all these items in writing together with applicable rental or lease contract details. Your offer can also include a clause requiring the seller to pay out any outstanding contracts, giving you clear ownership of the items under rental or lease.

While there’s a lot to consider as you start the house hunt, a registered real estate professional can be a valuable asset in helping you make informed decisions along the way.

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