Saturday, April 08, 2006

Home Buying Dos and Don'ts

  • Sit down and figure out exactly what you want your new house to be like before you start looking. Do you want resale or new? Urban, suburb, exurban or country? Detached, semi-detached or townhouse?
  • Ask friends and family to recommend a real estate agent. If they can’t recommend one, call around and speak to a few before settling on one.
  • Sell your home first before you buy your new house. You’ll know how much you made off the sale that can affect the price range for your new home, and you won’t be caught paying two mortgages.
  • Look at the property as a whole. Consider the lot and the house when you are viewing a property.
  • Consider location. Chose a neighbourhood that suits your income, and the size and age of your family.
  • Try to find a house with gas heating. It is more efficient and environmentally friendly.
  • Arrange your move as far in advance as possible. That way, you can enlist the help of friends, rent a truck and give yourself extra time to pack.
  • Make sure your mortgage commitment is sent to your lawyer after your mortgage is approved.
  • Consider buying a new home rather than a resale property. You can choose the options and look of your house, which could save you money on renovations. Plus a new home is under warranty by the builder. so you are at least partly protected.
  • Keep all receipts related to your move. You may be able to claim them on your income tax if you are moving at least 40 km closer to your work.

  • Forget to discuss all fees for the real estate agent’s services. Typically, the agent’s commission is about 6% of the price paid for the house.
  • Fall in love with a house at first sight. Make sure the things you love about the house last beyond first impressions.
  • Forget about whether or not you plan to resell. If it’s a starter home and you plan to resell in a few years, buy a modest house in a good neighbourhood, rather than an expensive house in a modest neighbourhood. That way the resale value will be higher.
  • Submit an offer of purchase on impulse or under pressure. It is a legally binding document.
  • Draw up an offer of purchase by yourself. A real estate agent or lawyer can minimize possible mistakes.
  • Buy a house out of your income range. Your mortgage should not be more than 30% of your income.
  • Forget that a real estate agent gets a higher commission when the house sells for more. An agent cannot be expected to volunteer information about defects in the house you are thinking of buying. Ask specific questions to get all the information you need.
  • Think that because you are buying a new home, you don’t need to have an independent inspector evaluate the construction.
  • Expect to only be paying the down payment and the mortgage. There are many other costs to buying a home, like taxes, lawyer’s fees, insurance, moving costs, utility bills...
  • Forget to send out your change of address notifications. Make sure you alert the Ministry of Transportation about the change of address.


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