6 Buyer Mistakes to Avoid
- Having no plan on how long to keep the house. A good buying strategy is to keep the home for at least 5 years. That way the property appreciates enough that the sale price covers selling costs and you walk away with more equity than you put into it. Selling within 2 or 3 years rarely covers costs.
- Not getting pre-approved before searching. Today’s mortgage rules make it more important than ever to find out about your credit rating and the mortgage amount you can carry. Otherwise, your offer may end up going nowhere.
- Only working with listing agents to get a better deal. A listing salesperson can represent both seller and buyer with consent. But consider this. Working with the seller over time and having built a relationship, the salesperson may have a strong allegiance to the seller. Ask yourself: “Who does the salesperson have a primary relationship with? You should at least feel that the salesperson is objective and neutral.
- Making too low an offer. This can upset or discourage the seller from wanting to negotiate with you and may end up costing you more if the seller gets his back up. This is a definite losing strategy in a multiple offer situation.
- Not having enough to close the sale. Besides the minimum downpayment of 5%, there are additional pre-closing and closing costs: a home inspection, an appraisal, house insurance, legal costs (fees and disbursements), land transfer tax if you are not a first-time buyer and closing adjustments for taxes and water.
- Borrowing money before closing. Lenders will check your credit again prior to closing. If you have incurred additional debt for a car or furniture