Wise people learn from other’s mistakes. Your purchase will be easier and produce far better results if you avoid these costly mistakes:
1. Choosing the wrong salesperson
You are serious about buying; make certain you have a salesperson who is equally serious about working with you. You need someone who is professional, whom you respect and trust. The wrong salesperson can sabotage your mission.
2. Not using an experienced salesperson
The average salesperson is involved in more transactions in six months than the average buyer is in his lifetime. Use the experience they have acquired in many successful transactions to your benefit. Experienced salespeople can help you avoid the costly mistakes outlined here.
3. Not understanding what you and your spouse need and want at the outset
Wastes time and causes fights. Work on a wish list together.
4. Not signing a buyer’s agency agreement
A Buyer’s agent will give you exclusive representation from beginning to end and it will likely cost you nothing. Pick your salesperson judiciously then get them working for you. In the 90’s a Sprint survey in the states showed that buyers using buyer’s agents paid an average of 5.5% less for their home than did those using traditional agents.
5. Not getting pre-qualified or pre-approved
If you make the effort to attain pre-qualification or pre-approval from a lender, you greatly strengthen your negotiating position when the time comes to submit an offer on a property. Sellers and listing agents will treat you more seriously.
6. Not knowing how much you actually want to spend each month
Again, saves time and frustration. Establish your comfort level for total monthly payments associated with purchasing before you commence the search. Be prepared to spend into your maximum comfort zone, but avoid feeling pinched because you have overextended. You have a life to live too.
7. Waiting too long to see a house
Ensure that your salesperson understands exactly what you need and want. Thereafter, speed is important. When they tell you they’ve seen a particularly good home for you, move quickly – make yourself available to see it ASAP. Good properties tend to sell quickly.
8. Being pushed into buying a particular home
Don’t make a decision until it’s the right decision for you, not the right one for the salesperson.
9. Waiting too long to put an offer in once you’ve decided on the right house
Spend all the time in the world looking. Once you see your house, move quickly. This mistake has cost many buyers the house that they really wanted.
10. Buying without keeping resale value in mind
Traditional homes and even those which are attractively unique can be great investments. Stay away from the oddballs. Every house will have to be resold sometime. Can you reasonably foresee that the property you are considering will have broad appeal to buyers in the future when it is time for you to sell? Please pay attention to this one; you’ll be pleased with yourself in the future if you do.
11. Letting emotion blind sound reasoning
Don’t conclude that you really must have a particular house mainly because of its emotional impact on you. Some people buy houses based on little more than the very clever decorating skills of its owner. There are many better reasons to buy a house. Validate the emotional appeal a property has for you through objective information, facts and sound reasoning. Don’t let emotional attachment preclude rational judgment.
12. Buying the right house in the wrong neighbourhood
Get a grip! You don’t spend your whole life inside the house. Make certain the neighbourhood makes you as happy as the house does.
13. Not concealing your thrill at finding the right house
When you fall hopelessly in love with a house play your cards close to your chest. Listing agents are pros at reading your body language and will relay this type of feedback to their Sellers. Sellers and agents know over enthusiastic buyers tend to pay more.
14. Basing your offer on the asking price alone
Maybe the asking price is too high. Maybe it’s low, hoping for a bidding war. The asking price does not necessarily reflect the VALUE of a property. Recent comparable sales is a much better guideline.
15. Overpaying for a house by not getting enough information about comparable properties
Obtain market statistics and specific comparable sales for the area. You can’t make a reasonable offer if you don’t know what is reasonable.
16. Submitting a low ball offer
Low ball offers at best get signed back high and at worst get rejected outright. If you want the house, be fair and reasonable in your offering price. Submit an offer that will tempt a vender to accept or at least will call for one reasonable sign back. Extended negotiations give an opportunity for other buyers’ offers to be considered and accepted. Low ball offers have the tendency to sour negotiations and cause the seller to become inflexible. Pitching a low ball offer at the seller is no good to you if you don’t get the house that you want.
17. Including “everything under the sun” in your offer
You want the house. Forget the furniture for now. If you include items which the owner has no intention of selling it will just antagonize, alienate and blow away any good will. Include only items which are on the listing! Save haggling for the trinkets until later.
18. Not having a house inspection
They eliminate costly surprises and allow you to budget for maintenance and improvements.
19. Not knowing or understanding your obligations and your rights as set out in the accepted offer
It is essential to understand all the terms and clauses in the offer. Be mindful of the time frames of any conditions. Poor clauses, incorrect assumptions or simple misunderstandings of your obligations can lead to unexpected costs or even an inadvertent termination of the Agreement. Don’t sign the offer until you understand it. Gain understanding by asking questions.
20. Forgetting to calculate all the costs
Remember, unanticipated expenses necessary to close the deal are surprises you want to avoid. Follow the Scout Motto of Canada – Be Prepared.
21. Putting all your eggs and emotions into one basket
Accept the fact that you might have to deal with disappointment. In the event that you are unable to buy a house which you really wanted it is much easier to get back in the saddle and resume your search in earnest if you were not totally emotionally committed to the property. Easier said than done, but try not to allow yourself to fall in love with a property until its yours. Put an offer in on a house, once you get it, allow it to become your future home. It’s hard to carry on looking if you can’t put to rest losing a particular house. Things do have a way of working out. Listings come out daily. Be rest assured that many people do in fact find a home which they like even better than the unforgettable one that got away.
22. Being impatient
Purchasing a house requires patience and negotiation. Sometimes negotiates occur at lightning speed, often they don’t. Don’t require that the pace of the negotiations meet your timetable alone unless you are in a bidding war. Give the negotiation process the time that it needs.