Buying a home is one of the best ways to create wealth. It's a forced way to save money, and we're lucky enough to have a stable, increasing real estate market in Oakville, Burlington and the surrounding areas.
If you're not careful however, you can find yourself in a great deal of trouble financially. Watch out for these 5 scenarios so they don't get the better of you!
1) Buying Out of Your League
Many people get really excited at the prospect of buying a new home and think they should purchase as much house as they can possibly afford. The problem arises when you begin seeing homes outside your price range which will naturally be nicer than those within it. Your realtor should not be showing you homes that you cannot really afford.
As a buyer, you need to carefully evaluation exactly what your price range should be and shop accordingly. You have to remember to factor in taxes, insurance, repairs, maintenance, and utilities. Have your realtor explain all the different expenses and make sure you look for homes within the price range you can comfortably afford.
2) Making Your House Your Only Investment
As stable as the real estate market in the western GTA is, you just never know what will happen. A lot of people these days also see buying a home as the way to show you're financially stable and rush into things. The key is to plan on holding onto your house long enough to see a return on your investment after you factor in real estate commissions, lawyer fees, transfer tax, moving costs and more. Think about other ways to invest your money as well - just in case.
3) Overlooking Small Repairs Now
Putting off little repairs and maintenance issues now could cost you thousands in the future. Small things like kitchen / bathroom leaks that you patch up, or even replacing the filter on your air conditioner regularly can turn into major headaches if you don't take care of them. Flickering lights can cause a fire in the future, and there is always the issue of water damage being ignored for the time being. Fix those things as they arise to avoid a disaster later.
4) Cutting Corners on Major Renovations
Be careful when it comes to who you hire to do your home renos. Try to avoid hiring your brother-in-law and instead hire a licensed contractor with a good track record. An untrained workforce could result in having to do the job twice to fix what went wrong the first time. Also, ensure that you have the correct permits so that there are no issues when it comes time to sell your home.
5) Getting Stuck with Two Payments
This one is tricky - do you sell before you buy or vice versa? A lot of people decide to buy a home before theirs is sold. You need to think about how easy it will be to sell your current home. If you live in a rural area or have a very unique home that will require a specific buyer, it might be more wise to sell yours before you take on another mortgage. You can include a clause in the purchase contract that you can't close on the home until yours is sold, but a lot of home sellers won't want to work with this type of offer. Talk to your real estate professional about the best order to move forward. If they're experienced enough they will have sound advice and insight with regards your particular situation.
The good news is that these things are not hard to avoid if you plan properly and have good help. Hiring a realtor to help you through the process will pay off in the end, especially when shopping for a home. A good one will know great value when they see it, ensure you're buying a home that will go up in value, and help you through the entire process - and even make it enjoyable!
Thanks very much for reading. As always, if you would like to discuss your current real estate situation, I would love to offer my expert knowledge of the Oakville and Burlington markets. I will also show you how my exceptional marketing plan will help you get more money for your home and also make it sell faster. You can reach me at 905 845 9180, or by email at email@example.com.
Century 21 Miller Real Estate Ltd, Brokerage
Independently Owned and Operated
905 845 9180