Get pre-approved before house hunting
Talk to a mortgage broker before you begin looking for a house. It lets everyone know you are serious about buying a home. Pre-approval isn’t confirmed financing; you’ll still need to go through the process of qualifying for the loan. You can make your broker’s job easier by providing all necessary documents up-front rather than relying on estimates to get a pre-approval. Sometimes a lender will give a Letter of Commitment, which is a legally binding loan offer that you can redeem later.
Think long-term value
Buying a house is the single largest investment you will ever make. Think about resale value, look for good locations, and how feasible it is to add features later. Can you imagine yourself living in the home for 10 years?
Research the neighbourhood
Walk around the block and see how other people live. Introduce yourself to the neighours and ask what it’s like to live in the neighbourhood. Ask about noise, past problems, and listen for pride of ownership. If the neighbours like the area and have lots of good things to say then it may be an area you’ll like.
Research bargain properties like foreclosures
Get estimates on repairs or renovations. Get answers as to why the property was given up by the former owners. Something that is too good to be true usually is. If a home has an unusually low price try to find out why. Professional buyers will have gone over the property with a fine tooth comb and discovered why it’s priced low and you should too.
Buy within your budget
It’s easy to overspend especially when everyone seems to be encouraging you. An extra $2 a day may require sacrificing entertainment or other lifestyle choices. Make a realistic budget and stay within it. Better still, create your new budget six months before you expect to buy and put the extra money in the bank to see how realistic your plans are.
Falling in love at first sight
A certain amount of pragmatism is required when house hunting. It’s easy to fall for the house that reminds you of Auntie’s or be swayed by the smell of baking bread. Be objective and ask questions. If you do find a house you love be sure to do your homework and see if it’s the real thing.
Get a home inspection
Never assume that because the home looks tidy and organized that all is well. All homes should be professionally inspected. Even condos and new homes may have issues with common areas or fit-and-finish that you need to be aware of. Professional home inspectors carry errors and omissions insurance – ask to see their credentials before you allow them to begin.
Read the fine print
Ask to see the mortgage documents and other transaction paperwork well before you sign anything so there are no surprises. When in doubt, consult your lawyer about things you’re not sure of. Your real estate agent isn’t qualified to answer questions about legal issues.
Always have options
Never sign an offer that doesn’t allow you to back out of the deal because you cannot get financing or the home inspection turns up something expensive. Your real estate agent will add clauses to the offer that will give you the option to cancel if everything isn’t to your liking.