First-Time Home Buyer Pitfalls

How can you avoid the most common first-time home buyer pitfalls?  It’s time, you are about to set out on the first time home buyer journey.  It is an exciting time, your dreams of home ownership are finally coming true.  It is, for many, the largest investment they will ever make.

Avoid when you are a first-time home buyer

\r\nYour excited,  you and your spouse sit down together and open up the website and search all the options. Houses, condos, duplexes. Possible areas or school districts looking for the perfect place to nest. This is mistake #1.  You will find you are quickly overwhelmed with choices. Those choices may not be choices at all if you have not taken the first step in the process, which is to find a qualified professional REALTOR® who will support you through the process.

This pitfall is easy to avoid when you are working with a qualified agent, they will narrow down your search, keep you on track and make the process much less stressful.

Avoid when shopping for your first-home. Money and the first-time home buyer

Money, yes money is always the biggest consideration.  Your REALTOR® may be able to recommend a reliable Mortgage Broker or send you to get a pre-approval by your bank. If you are not pre-approved for a mortgage then it will be difficult for your real estate agent to narrow down your choices. The last thing you want is to be looking at properties for sale that you cannot afford as this will only lead to disappointment if you are looking at homes over your budget. As a side note on pre-approvals, they are not all created equal. It is important that a pre-approval include a complete vetting of your finances with your bank or a broker. If your assets, liabilities and your credit have not been looked at, you are not pre-approved despite what the nice lady behind the counter may say.

Ask loads of questions when getting pre-approved. Provide all the documents they request so that your financial position is well understood. Failing to do this can lead to the worst possible scenario, not being approved for your dream home when you do find it. When you are working with a well informed lender, they will walk you through all your options and answer questions as you move further into the process helping you avoid this first-time home buyer pitfalls.

To avoid happens before you buy. Not understanding all the costs of home buying

While this could very well fall into the money category it deserves its own spot because often not knowing the extra’s will cause stress well into the buying process. We all know we need some down payment, that could be anywhere from 5% up. If you are one of the thousands of first time home buyers in Alberta you may not be aware of the “extras” beyond your down payment.

    • Appraisal (sometimes covered by lender but not always) 300.00-500.00
    • Home Inspection 300.00-600.00
    • Property Survey, not always but your lender may want an up to date survey, 1,000.00-2000.00, but  your lender may accept title insurance instead 300.00
    • Legal fees; shop around as these can vary. Often it is best to get a few referrals from your REALTOR®.
    • For condo’s you want an Estoppel certificate. They can be up to 100.00 but they will tell you if there are any outstanding condo payments or contributions outstanding

Other fee’s

    • If you are buying a new home the GST is payable but often written into the mortgage.
    • If you have less than 20% down then you will pay CMHC or Genworth Insurance fee’s.  These are also added into the mortgage but should be taken into account.

The most important first-time home buyer pitfalls to avoid is stress! Often times first-time buyers get so stressed out during the process they forget to have fun! This is the only time you get to have this experience. Lean on your REALTOR® and finance representative, trust them to do the heavy lifting so you can enjoy the process!

Are you a First-time Home Buyer? Be fully Prepared before you Buy!

Chat with a professional REALTOR® who specializes in first-time buyers. They are here to help you succeed with the most important purchase of your life!