Top 10 Pitfalls
It’s worth the effort to learn about the home buying and selling process; doing so could save you time, stress, and money. One way to protect yourself is to learn from the mistakes of others.
Too many Ontarians fall victim to easily avoidable buying and selling hazards. Being mindful of these issues can help the process go a lot smoother.
Here are the most common buying and selling pitfalls, and tips on how to avoid them:
1. Hiring the first salesperson you meet
While you may decide to work with the first real estate professional you meet, you're encouraged to meet with a few different representatives before settling on one. Make sure you feel comfortable with them, and their approach to the process. You can even use the ‘Registrant Search’ tool at the top of RECO’s website (www.reco.on.ca) to check the status of their registration and see whether they have been subject to disciplinary action.
2. Not making your expectations clear with your real estate professional
Working with a real estate professional is a partnership, so communication is the key to success. It’s important to have a mutual understanding about what you’re looking for in a home, what elements you would consider to be ‘deal-breakers’, and what services the brokerage will be responsible for. Make sure you discuss what services you expect... and then get it in writing.
3. Failing to read and understand forms and contracts
It can be tempting to speed the process along by signing forms that you haven’t read. After all, nobody really likes reading the fine print. But taking the time to understand what you’re signing can avoid a lot of problems later on. For example, you don’t want to find out that you’re on the hook for a six month listing agreement to sell your home if you only want your house on the market for three months. Make sure all the blanks on the form are filled in before you sign it, and make sure you receive a copy.
4. Allowing emotions to overtake common sense
When you fall in love with a property, it can be hard to walk away. Stick to your budget and be aware of the risks of forgoing a home inspection for a chance to win a bidding war. Making your offer conditional on a home inspection is a smart decision because a qualified home inspector, engineer, or contractor, can identify underlying problems with a home’s major systems; like heating and electrical. Skipping an inspection is a gamble because you’ll leave yourself vulnerable to a much more costly problem later on.
5. Assuming everything is included
Don’t assume that the stove, washing machine, and dryer, or other items, are included with the sale. The seller may want to take the dishwasher with them, and the hot water tank might be under a rental contract that you’ll be required to take over. The best way to protect against any surprises is to detail all the items (known as chattels) you expect to be included in your written offer. In the offer, you can also include a clause requiring the seller to pay out any outstanding leases on the home’s major systems.
6. Forgetting about what’s within the walls
The hardwood floors, stained glass windows, and walk-in closet, are appealing features, but the insulation, wiring, and plumbing, are just as important when you’re evaluating a property. Ask your real estate professional to look into the age of the home’s systems and if there have been any upgrades. If extensive renovations have been done, your real estate professional can also help determine if the appropriate permits were issued.
7. Forgetting about what’s outside the walls
When you buy a home, you’re also buying a place in a community. Visit the neighbourhood at different times of the day to see if the surroundings fit your lifestyle. Is it too noisy, or not vibrant enough? The only way to find out is to spend some time exploring the area, talking to neighbours, and researching the locations of amenities; like grocery stores and banks.
8. Not doing your research
If you’re concerned about buying a home with a troubled past, a simple Internet search for the address can go a long way. This is also something you can ask the neighbours about.
9. Making verbal agreements
Verbal agreements aren’t a problem, until they’re a problem. Putting everything in writing forces both parties to be clear about their expectations and provides a record that can prevent disputes later on.
10. Underestimating closing costs
The price you pay for a home is just one of many costs associated with the purchase. Related costs, such as land transfer taxes, title insurance, and a home inspection, can really add up and take an unexpected chunk out of your budget. There are also the final touches; like a fresh coat of paint, some window coverings, or a new appliance, that you may want to do to make your new place feel like 'home'.
While these tips will certainly help, the most important advice is to work with a registered real estate professional. Registered brokers and salespersons provide a great deal of knowledge and expertise about the buying and selling process, and will help you avoid these hazards.