Belleville Blog

The most common mistake home buyers make is that they buy with their heart instead of their head. This often means they pay more than they should or are disappointed when they uncover defects in the home or find out the neighbourhood isn’t quite what they thought.

Here are 9 ways to prepare yourself.

1. Be prepared

The best way to avoid this is to be prepared when you buy a home. This means doing research and finding the right agent – should you choose to use one – and other professionals to protect your interests.

2. Why an agent is a good idea

Agents give you objective advice about what a home is worth. The agent will also have connections to lenders and home inspectors to ensure you get the best mortgage rate and that the home is properly inspected before you buy. They will also be able to explain the fine print of any agreement so you know what to expect on closing. Although it is not mandatory to use an agent to represent your interests, you will not have the benefit of the advice and experience of an objective third party before making probably the largest investment that will ever make.

3. How to find an agent

Start by asking family and friends. Look for signs in the area that interest you, especially “Sold” signs. This is a good indication that the agent has the area’s pulse and knows how to properly price a home. They will also likely be aware of any problems, such as sewage backups, termites or vandalism; things that may only be known by locals. Also check the website of agents you may interview. Do they offer tips and explain what services they provide? Do they offer information about the neighbourhood including parks, religious institutions, demographics and schools?

4. What to look for in an agent

When interviewing agents, ask for testimonials from satisfied clients. Look for words such as ‘careful’, ‘followed up’ and ‘protected my interests’. If you want to go one step further call these people. Be wary if you hear words such as “pressured me”, “always in a hurry”, or “did not respond in a timely manner.”

5. Visit the neighbourhood on foot

Take a walk through the neighbourhood and talk to people. Drive by at 7:30 in the morning to see how many school buses are picking up children. You can also tell how long it may take you to commute to work during rush hour. By speaking to people, you can not only get a sense of the friendliness of the community, but also as to whether there are any surprises that no one is going to advertise, a local haunted house or former grow op, or the neighbour from hell.

6. Go to City Hall

Visit your local building department and find out if any new developments are planned. New development may increase property values but also increase traffic. Check to see how many owners have applied for minor variances, to either build homes or additions that are larger than the by-law permits. This gives an indication of the future direction of this neighbourhood.

7. How much can you afford

When it comes to mortgages, it is not enough to know in advance how much you can safely borrow based on your income. Buyers should also realize that the lender will do an appraisal and if the lender believes you paid more than the house is worth, they will not give you the full amount of the loan that you expect. So, be very careful about stretching yourself to the limit when you make an offer on any home.

8. Title insurance is a must

Title insurance can be arranged through your lawyer. You will be protected against unpaid taxes or water bills by the seller, as well as problems that are not known at closing. This includes problems where part of the home or swimming pool is in fact on your neighbour’s property. However, it is a mistake to believe that title insurance will protect you against everything. For example, title insurance will not compensate you if you thought your lot was 50 feet and a later survey showed that it was only 48 feet.

9. Choose a home inspector carefully

The home inspection is a critical part of the process, so do your research. Make sure the company is registered before retaining them. The Ontario Association of Home Inspectors is a self-regulating body that defines qualifications for home inspectors, and grants the designation RHI, or Registered Home Inspector, to qualified practitioners in Ontario. Most inspection firms have a limitation of liability clause, which states that if they miss something that costs you money, they are not responsible. It is better for you if the company does not have this type of clause.

If you follow these simple steps and buy with your head instead of your heart, chances are you’ll get the house you want at a price you can afford.