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5 Common Mistakes Of First-time Buyers

Apr 23, 2008
You have been saving for a while, driving through neighborhoods, looking on the Internet... Finally, you decide to take the plunge and buy your first house. It can be an exciting process but also a very stressful one all at once. Here are some common mistakes first-time home buyers make and how to avoid them.

1- Not being pre-approved for a mortgage
First-time home buyers sometimes mistake pre-approval by a lender with pre-qualification. Pre-qualification is your first step. It will give you an idea of what you can afford to buy. Pre-approval means that your have a written commitment from a lender for a maximum mortgage at a stated interest rate. These pre-approvals are usually valid for 3 to 6 months.

2- Waiting for the perfect home
Many first-time home buyers make the mistake of searching for their perfect home - the home that will meet 100% of their needs and wants. These buyers may pass up great homes that would meet 90% of their requirements and eventually give up and purchase a home they do not really want because they are worn out. Also, while waiting for the "perfect" home, market prices continue to rise which means you will have to pay more for a home. Determining your most important criteria will help you select a home that meets the majority of them.

3- Skipping the home inspection
Either in an effort to save some money or because they are wrapped up in a multiple offer situation, first-time home buyers sometimes decide to skip having a professional inspect the home. Using a competent home inspector can offer you peace of mind that you are making a sound choice or alert you to underlying problems that could cost you a lot of money.

If you know the home you are interested in is going to have multiple offers you can always do the home inspection before you present your offer. Having a home inspection under your belt will help you enter the negotiations with your eyes wide open and the advantage of having one less condition.

4- Over-buying
There is a disturbing new trend sweeping major cities in Canada - the house poor first-time home buyer. A large or beautiful home with little or no furniture is a very uncomfortable reality. When you spend all your earnings to support your house, it can quickly cause family stress.

5- First-impressions
First impressions can be a very strong influential factor when searching for a home. First-time home buyers should remember to keep an open mind and to try to be as objective as possible when examining a home. Don't allow the current style or look of the house, whether good or bad, to overly impact your decision. A messy or "ugly" house may be structurally sound and actually suit your needs. Alternatively, don't rush to make an offer just because a home is beautifully decorated. A thorough investigation of the house will help you make a sound decision.

Embarking on the quest for your first home is exciting. But remember, do your homework before you begin and be careful to avoid mistakes that could prove costly.
About the Author
Jeffrey Caulfield is sales representative specializing in Beaches real estate Toronto and is a source for local market information. Visit his site to search for MLS Toronto real estate listings and he will be happy to answer any of your real estate questions.
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