I’m looking to enter the real estate market for the first time in 30 years. What are some common mistakes that I should avoid? Part 5
This column wraps up our series on the common mistakes made in buying and selling real estate. By now you’ve learned about these eight common oversights, with tips on how to avoid them:
- Hiring the first salesperson you meet
- Not making your expectations clear with your real estate representative
- Forgetting about what’s within the walls
- Forgetting about what’s outside the walls
- Not doing your research
- Making oral agreements without confirming them in writing
- Failing to read and understand forms and contracts
- Assuming everything is included
Being mindful of these avoidable errors can help ease the process of buying or selling a home.
And now: the final pair of Top 10 mistakes.
Mistake: Underestimating closing costs
When you’re buying a home, the number that is often given the most attention is the purchase price of the property. But the price you pay for a home is just one of many costs you’ll have to consider.
Before you close, for example, you may want to conduct a home inspection, and your bank may require an appraisal or survey of the property before they agree to provide financing. Aside from the purchase price, additional closing costs include land transfer tax, mortgage insurance, legal fees and, perhaps, title insurance.
These costs can certainly add up and take a bite out of your overall budget.
There may be additional costs you encounter after closing, too. How will you move your belongings? Will temporary storage be necessary? Will your gas, hydro, water and telecommunications companies charge a “hook-up” fee to set up services in your new home? Will you need bridge financing if you purchase before selling your present property? These are numbers you’ll want to research and determine well in advance of your closing date. Finally, consider the final touches, such as renovations, repairs and decor, which help to ultimately make your new house your home.
Mistake: Allowing emotions to overtake common sense
When you fall in love with a property, it can be hard to walk away. My final caution, one that’s important to keep top of mind throughout the buying and selling process, is to always maintain a level head. Your real estate rep can be a great asset in providing objective advice and counsel.
Stick to the budget you’ve established for yourself and be aware of the risks that could come with foregoing offer conditions, such as a home inspection or financing.
Grounding your decisions in common sense, and the plan you initially set out for yourself, will make for a smoother process overall.
Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.