Buying a home is a great investment. With the strong housing market in Canada, now is a great time to start this process. Before buying a home, it’s vital to have a financial plan. Some homebuyers purchase a home that is too big based on their budget. Buying a new home is an exciting process that you should be happy about!
The best method of preventing mistakes like this and others before they happen is to know what to watch for!
Here are some common home-buying mistakes and how to avoid them.
Lack of a Budget
Having a set budget is vital before looking at homes. Whether you’re building a home or buying one, you need to have a budget. Buying a home is an emotional process, and it’s easy to get emotionally attached to a home you cannot afford.
Before starting the building or buying process, you need to be pre-approved for a home. This will help you stay within budget when looking at potential properties.
Not Making a Large Enough Down Payment
Even though the minimum down payment requirement for homes of $500,000 or less is five percent, if you put any less than 20% of the purchase price down on a home, you’ll need to obtain mortgage loan insurance.
For this reason, while you can still purchase a home with as little as a five percent down payment, this could be a mistake. Many homeowners, in retrospect, regret not saving up a 20% down payment in order to reap the benefits of making a larger down payment and avoid the costs of mortgage loan insurance.
If you’re a first-time buyer, take the time to learn the down payment basics so you know what to expect.
Forgetting Additional Expenses
Buying a home costs a lot of money, so it’s very important you plan for new home costs. Not only are there closing costs, but there are moving costs as well. Depending on how far away you live, moving to a new home may cost more than you think.
When developing your financial budget for a new home, you need to consider these additional expenses. Some homebuyers forget about them, and it makes them go over budget.
Being Too Picky For Your Price Range
In the current housing market in Saskatchewan, homes might sell within a couple of days of hitting the market. If you’re buying a home, now is not the time to be picky.
If you’re building a home, you have a little more room to be picky about key features. However, you still need to realize you might not be able to include your every want. Instead, focus on the key areas you need to have in a home. Your home doesn’t have to be perfect, but it can be perfectly right for you. After all, you shouldn’t judge your ideal home by price alone.
Lack of Vision
Buying a new home is an exciting process. Some buyers struggle with putting an offer on a home because they lack a vision of what the home could be. With some of the new options today on upgrading a home, it’s easier than ever to upgrade a home quickly.
For example, if the home you love has terrible paint on the walls, this is something that you can easily change. Make sure to have a vision when buying an older home.
Forgetting the Future
When buying a home, you need to think many years out. One of the most important variables is location. You need to buy in an area that’s going to grow rapidly in the years ahead.
If you buy a home in any of Regina or Saskatoon’s new neighbourhoods, you’re almost guaranteed to benefit from a higher market value should you ever decide to sell your home. Spend some time researching areas you want to live in before looking at homes.
Offering Too Much
In a seller’s market, many people feel like they have to offer a ridiculous amount of money to buy a home. One of the worst parts of buying a home is feeling like you paid too much. Before submitting an offer, you need to do thorough research on what the local market is like. Look at current home listings or ask your realtor for comparable homes when making an offer.
This information will help you submit an offer that’s in line with the current market conditions. If you don’t get one home, you can always make an offer on another one.
Not Thinking About Kids
Finally, a major mistake many buyers make is forgetting to consider the possibility of having kids. If you’re buying for one or two people today, your housing needs are very different than if you have multiple kids.
Some people prefer to buy a home that will have enough room once they have kids. Others would rather sell a home and buy another one when the time comes. Whatever your preference, make sure you think about whether or not you’re likely to have kids in the future. Additionally, if you do intend to have kids, it’s a good idea to include kid-friendly features in your home.
Buying a home is a huge financial decision. If you buy a home the right way, it can be a great investment for you. If you can prevent the mistakes mentioned above, you’ll buy a home you love, at a great price that will appreciate in the future.
