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Deciding to take the exciting plunge into homeownership in Ontario can be an exciting, yet overwhelming decision. It can also be hard not to get so caught up in the dream of finding your perfect property that you overlook certain things that can quickly lead to costly mistakes. Buying a home is a significant investment, not just emotionally but financially. In Ontario’s competitive market, it is important to strike a balance and to not let your excitement cloud your judgment. Take your time, do your research, and make informed decisions that will set you up for success as a new homeowner.

This blog will outline five common mistakes that first-time home buyers make in order to help prospective home buyers navigate the real estate process smoothly.

1. Moving Too Fast

In Ontario’s hot housing market, emotions can run high and the thrill of finding your dream home can be overwhelming. However, for first-time homebuyers, taking a step back and avoiding impulsive, emotion-driven decisions is crucial. Making rushed decisions can result in financial strain and hidden costs that may not have been thoroughly thought out beforehand. Moving too quickly and not taking time to conduct careful research can also result in overpaying for a property. Acting too fast on a particular property may result in hidden or ignored red flags, which can result in headaches and pricey repairs down the road.

Moreover, making decisions quickly or based on emotions can lead to buyer’s remorse. It is important to keep an open mind when looking at homes and consider whether they meet your current and future needs. Taking time to weigh the pros and cons rationally will ensure that you are comfortable with the property and its financial implications.

2. Skipping a Home Inspection

It can be tempting to skip the home inspection, particularly if you are in a hot housing market, as you may fear that you will lose your dream home to another buyer. However, it is crucial to not let urgency overshadow the potential hidden problems and additional costs that a home inspection can uncover. A home inspection conducted by a qualified professional uncovers unseen issues, such as faulty wiring, structural problems, roof leaks, or potential mould growth, which can lead to major repair costs down the road. If you opt to skip an inspection, you might unknowingly purchase a house with extensive underlying problems and the joy of homeownership can quickly turn into a stressful and expensive renovation project. Further, a home inspection report can be a powerful negotiation tool. Identified issues can be used to request repairs from the seller or negotiate a lower purchase price to account for the required repairs.

3. Not Getting Pre-Approved for a Mortgage

Despite being strongly recommended by real estate professionals, some home buyers either overlook or choose to bypass the mortgage pre-approval process. However, doing so can provide prospective buyers with clarity and confidence throughout the real estate process. Obtaining pre-approval affirms your maximum borrowing potential, which allows you to focus on houses within your realistic budget. This can help prevent the disappointment of falling in love with a property that you cannot afford.

While not a guarantee of final mortgage approval, pre-approval offers a significant advantage in Ontario’s competitive housing market. It empowers you to make informed decisions when deciding on a property and offer and allows you to present yourself as a serious buyer, increasing your chances of securing your dream home.

4. Failing to Budget for Closing Costs

Closing costs are often overlooked and not included in a first-time home buyer’s house-hunting budget. In some cases, closing costs can be significant and should not surprise you. In addition to your down payment, it is important to set aside a budget for anticipated, or unexpected expenses, such as closing costs, which can include legal fees, land transfer taxes, insurance, title registration, and home inspection costs. However, it is critical to note that your mortgage lender will not cover these costs and it is up to you to bear these additional costs in mind when searching for any property.

5. Not Considering Future Needs

It is easy for first-time homebuyers to get caught up in their current needs without thinking about what life could look like in the next five to ten years. While it is impossible to predict the future, it is important to consider how well your home fits your future goals and potential changes, such as a new job, family additions, or changes to your lifestyle. Choosing a property that fits your current and future needs can save you from the hassle of future moving costs or extensive renovation projects. As such, keeping an eye on the future can be beneficial when choosing your first home.

Let the Real Estate Lawyers at Bader Law in Mississauga & Oakville Help Guide You Through the Real Estate Process

At Bader Law, our trusted team of real estate lawyers frequently advise clients throughout Mississauga, Oakville, and Ontario on their options while moving through the buying and selling process. We work with buyers and sellers in both residential and commercial real estate transactions and will advise you on your options, help secure your interests, and protect your financial investments. To speak with a member of our real estate team, contact us online or by phone at (289) 652-9092.