9 buyer traps and how to avoid them
“A systemized approach (like our 33 Point Home Buyer's Care Plan) to the home buying process can help you steer clear of these common traps, allowing you to not only cut costs, but also secure the home that’s best for you.”
No matter which way you look at it buying a
home is a major investment. But for many
homebuyers, it can be an even more expensive
process than it needs to be because many
fall prey to at least a few of the many
common and costly mistakes which trap them
This important report discusses the 9 most common and costly of these homebuyer traps, how to identify them, and what you can do to avoid them.
A systemized approach to the home buying process can help you steer clear of these common traps, allowing you to not only cut costs, but also secure the home that’s best for you.
1. Bidding Blind.
What price should you offer when you bid on a home? Is the seller’s asking price too high, or does it represent a great deal. If you fail to research the market in order to understand what comparable homes are selling for, making your offer would be like bidding blind. Without this knowledge of market value, you could easily bid too much, or fail to make a competitive offer at all on an excellent value.
2. Buying the Wrong Home…
What are you looking for in a home? A simple enough question, but the answer can be quite complex.
More than one buyer has been swept up in the emotion and excitement of the buying process only to find themselves the owner of a home that is either to big or too small. Maybe they’re stuck with a longer than desired commute to work, or a dozen more fix-ups than they really want to deal with now that the excitement has died down.
Take the time upfront to clearly define your wants and needs. Put it in writing and then use it as a yard stick with which to measure every home you look at.
3. Unclear Title…
Make sure very early on in the negotiation that you will own you new home free and clear by having a title search completed. The last thing you want to discover when you’re in the back stretch of a transaction is that there are encumbrances on the property such as tax liens, undisclosed owners, easements, leases or the like.
4. Inaccurate Survey…
As part of your offer to purchase, make sure you request an updated property survey (or the seller's declaration on the existing) which clearly marks your boundaries. If the survey is not current, you may find that there are structural changes that are not shown (e.g. additions to the house, a new swimming pool, a neighbour’s new fence which is extending a boundary line, etc.). Be very clear on these issues.
5. Undisclosed Fix-ups…
Don’t expect every seller to own up to every physical detail that will need to be attended to. Both you and the seller are out to maximize your investment.
Realtors representing the buyer usually ask for a Seller's Property Information Statement to be completed.
Ensure that you conduct a thorough inspection of the home early in the process. Consider hiring an independent inspector to objectively view the home inside and out, and make the final contract contingent upon this inspector’s report. This inspector should be able to give you a report of any item that needs to be fixed with associated, approximate cost.
6. Not getting Mortgage Pre-approval….
Pre-approval is fast, easy and free. When you have a pre-approved mortgage, you can shop for your home with a greater sense of freedom and security, knowing that the money will be there when you find the home of your dreams.
7. Contract Misses.
If a seller fails to comply to the letter of the contract by neglecting to attend to some repair issues, or changing the spirit of the agreement in some way, this could delay the final closing and settlement.
Agree ahead of time on a dollar amount for a fund to cover items that the seller fails to follow through on.
Prepare a list of agreed issues, walk through them, and check them off one by one.
8. Hidden costs…
Make sure you identify and uncover all costs – large and small, far enough ahead of time.. When a transaction closes, you will sometimes find fees for this or that sneaking through after the “sub” total – fees such as loan disbursement charges, underwriting fees etc.
Understand these in advance by having your lender project total charges for you in writing.
9. Rushing the Closing…
Take your time during this critical part of the process and insist on seeing all paperwork the well before you sign. Make sure this documentation perfectly reflects your understanding of the transaction, and that nothing has been added or subtracted.
Is the interest rate right? Is everything covered? If you rush this process on the day of closing, you may run into a last minute snag that you can’t fix without compromising the terms of the deal, the financing, or even the sale itself.
If you are not quite ready to commit to moving, but want to keep abreast of the marketplace as it pertains to what and where you might want to live next. Consider getting onto our Weekly MLS hot pics and Market Watch (for investors: Weekly Investor MLS hot pics).
If you have made the decision you want to move then get onto our Daily MLS hot pics programme. You will be made aware of MLS listings you are interested in as they are published on the MLS that Realtors use.
Please note the Realtor MLS is not the same as Realtor.ca the national public marketing service for Realtors. Granted our active listings are uploaded to Realtor.ca but there is a time lag and due to confidentiality no information about conditional contracts etcetera is published.