Avoid these pitfalls when buying a home

What pitfalls should I look out for when buying a home?

Buying a home is a big decision and, for most people, the most substantial financial commitment they will ever make.

As you would expect, a real estate transaction consists of many steps that require close attention. Given today’s hot housing market in many parts of the province, it has become even more crucial to be aware of this so that you can be mindful of any potential pitfalls as you finalize your purchase. Here are some of them.

Review fine print closely. Don’t gloss over it. All the paperwork that you have to sign can be overwhelming, but it is key to remember that these documents are legally binding. This holds true for any buyer agreements to work with a real estate agent, or seller agreements to list a property for sale. Because of this, I highly recommend reviewing everything in detail, asking questions and consulting with a real estate lawyer.

Be thoughtful, not impulsive. With the supply of listed homes currently low and the demand high, multiple offers are common. While losing a few bidding wars can be disheartening, don’t succumb to the pressure to make hasty decisions.

As daunting as the process may seem, remember that sticking with a budget that you are comfortable with and keeping a cool head will serve you far better in the long run. As well, you will eventually likely find a home that you can love.

Include conditions to protect yourself. If you are in a multiple-offer situation involving a property you are keen on, you may be tempted to not only go over your budget, but also to make other compromises. While removing conditions like financing or a home inspection can certainly make your offer more attractive to a seller, know that you are also increasing your potential exposure to avoidable risk.

If you are unable to get a mortgage or you discover unforeseen costly repairs, you will have to deal with the consequences. That is why I strongly suggest that you crunch your numbers thoroughly and assess whether you can take on the risk before you decide to remove any conditions.

Don’t assume that what you see is what you get. As you walk through the property, the beautiful light fixtures and modern stainless-steel appliances may catch your eye and make it easy to fall in love with the place. However, it is important to note that you have to verify whether they come with the house. Often sellers want to take expensive features with them to their next home.

As well, other items in the home, such as the furnace and water heater, may be under a rental contract that you, as the new owner, may be required to take over.

So, before you make an offer, ask your agent to detail all these items in writing, together with applicable rental or lease contract details. This will help ensure that both you and the seller are on the same page. You might request the seller to pay out any outstanding contracts, thereby giving you clear ownership of the rental or lease items. Your agent can include necessary clauses in your offer.

There is certainly a lot to consider, so ask your agent questions and leverage their expertise to make informed choices.

If you have a question for Joe about the home buying or selling process, please email information@reco.on.ca.


This column is for general information purposes only and is not meant as legal or professional advice on real estate transactions.

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.

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