9 mistakes for first-time buyers to avoid

9 mistakes for first-time buyers to avoid

Buying a home for the first time is a big step – how do you make sure you do it right? I’ve worked with hundreds of homebuyers (first-time and otherwise) over the years, and have learned some important lessons about what to do - and what NOT to do.

Mistake #1

Not doing your homework. One big misstep first-timers make is coming in unprepared and not doing enough in the planning/up front stages before actually going and seeing properties. Understanding how the process works, researching mortgages, talking to a mortgage broker, and meeting with a really good agent – those are all things that can help you get a better sense of what it takes to buy.

Mistake #2

Not understanding the true cost of buying. There’s more to save for than just your down payment. Closing costs can run you $20K or more above and beyond that down payment, plus you need to understand how maintenance fees figure into your monthly costs. Read What does it cost to buy a condo? and The costs of owning a condo for some helpful info.

Mistake #3

Woman managing debt

Woman managing debt

Carrying a lot of debt. At least one or two years before you buy, get your credit in check. Don’t carry balances on your credit cards, and pay off your student loans. And forget taking out a loan for a new car, or even getting into a monthly payment plan on a new couch from Leon’s – paying cash up front for those purchases is okay, but financing adds to your debt load, decreasing the amount you can borrow for your mortgage.

Mistake #4

Not being willing to compromise. I get it, it’s your first home and you want it to be perfect. But a lot of buyers get caught up in “must-haves” that simply aren’t attainable with their budgets right now. They get wrapped up in buying a house, for example, or they won’t budge from a two-bedroom condo. Sometimes you have to start smaller, build equity, and work your way up.

Mistake #5

Getting hung up on a specific neighbourhood. Toronto is so big, and it has so many neighbourhoods that are amazing - some of which you’ve probably never been to. Give them a chance. We can find you a condo in an area that may not be the most popular place on earth, but has a lot of change happening: that’s the kind of property that will appreciate a lot. Consider Roncesvalles, for example. Fifteen years ago, it wasn’t particularly popular. But after I met with a friend at a Roncy restaurant one day, I fell in love with the area - so much that I ended up moving there. And guess what? In the last ten years, houses in that neighbourhood have more than tripled in value. Back then, I remember thinking that Queen and Dovercourt was the centre of the universe. Turns out it wasn’t.

Mistake #6

Modern Living Room

Modern Living Room

Overlooking a great place because of small stuff. If the building is old or the counter is ugly or the cabinets aren’t the colour you had in mind, don’t let that get in the way. Sometimes the better layouts are in older buildings, and you can always put in a new counter or paint your cabinets.

Mistake #7

Not having the money for your deposit ready to go. If your offer is accepted, the deposit is due in 24 hours, so make sure you know your funds are accessible in that timeframe. Can your bank cut a draft the same day? Some will and some won’t - it’s important to know your bank’s policy around this time-wise. Can you withdraw quickly from your RRSPs? Remember, every financial institution has different policies, and getting the money you need may not be the easiest thing to do under pressure. Getting it liquid and ready to go will make your life a lot easier when you buy. And if you decide to keep your cash tied up until your offer has been accepted, make sure you have a very clear idea of what it will take to access it.

Mistake #8

Not being on the same page as your SO. If you’re shopping with a partner, make sure you agree (more or less) on what you want in a place before you start looking. No matter how good your agent is at their job, if you can’t compromise, the search will just frustrate everyone. (I like to tell people that I’m part sales rep, part therapist…this is a scenario I run into a lot, and it causes a lot of delays and overall unhappiness.) Start with a list of each partner’s must-haves and nice-to-have, and have a heart-to-heart where you talk it through before you start working with an agent.

Mistake #9

Not going with your gut. If you’ve found the right place, you’ll know – there’s no need to see every available listing to figure that out. Of course, it’s natural to want to see what else is out there so you feel like you’re making the right choice, but honestly, in every single home I’ve found for people, when my client finds the right place, we all feel it – whether it’s the first one they’ve seen or the 20th. If it feels like home, don’t wait, because great properties get snapped up fast.

Want more first-time buyer resources? We have a whole section dedicated to helping you learn the ropes – check out the First-time Buyers’ Hub for info on everything from mortgages to closing costs.

About Mary Zontanos

Mary Zontanos is a community-loving book nerd who has lived on the west side of Toronto for almost 20 years. One of the things she loves most about being a real estate agent is working with people, young and old, and helping them shape their financial futures. Contact her today.

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