What I’m trying to say is, don’t be so sure of yourself. Having a lot of intelligence does not guarantee that a person will make good decisions all the time. I saw this firsthand when I worked as a real estate agent in Manhattan. I would see people with PhDs very excited about apartments that they could not afford and investment bankers talking themselves out of good deals. What I’m trying to say is that you should not be overconfident.
There is no group of people who have a monopoly on bad decisions when it comes to mistakes first-time homebuyers and sellers make.
In order to help people who are new to buying and selling property, we decided to partner with Compass, Halstead, Leverage Global Brokerage Members, and other high-quality brokerages. Together, we can teach people about some of the most common mistakes that are made during the process.
1. Thinking you’re buying a new house when you’re actually buying a used house.
The home you purchase will not be in perfect condition, regardless of what the sellers say. There will be problems that arise that you were not expecting.
2. Not looking under the hood.
A scratched floor probably won’t be a deal-breaker when it comes to buying a house, but it’s still good to know about before you move in. You shouldn’t spend more time shopping for a new pair of shoes than investigating your new potential home.
3. Not being ready to jump on the right house.
In Toronto, housing prices can change rapidly, and it’s not uncommon for a home to receive multiple offers within a few hours. To avoid being caught off guard, it’s important to have your finances in order and be prepared to make a quick decision when you find the right property.
4. Not being fully approved for a mortgage before you start the search.
You need to get a commitment from a lender to make sure that your financing does not fall through. They will check your credit, verify your employment, and your downpayment. Be prepared for this. If you do not know a good mortgage lender, we would be happy to put you in touch with the people we trust.
5. Trolling homes you can’t afford.
million. This is not a good way to find a home because you will most likely be disappointed. Many condos and houses in Toronto are underpriced on purpose to create a bidding war, which will drive the price up. A tip would be to not choose a $1.4 million house as your dream home if your budget is only $1.1 million, because you will not be able to afford it.
6. Not being flexible in your choice of neighbourhood.
There are many great neighborhoods in Toronto, and being willing to live in any of them will help you find the home you want within your budget.
Related: Check out our neighbourhood guides here.
7. Not getting a home inspection or not reading the one you got.
Home inspections are important because they can detect current and future issues with your house. Make sure to read the inspection report thoroughly and ask questions if you don’t understand something.
Home inspections are conducted to assess the condition of a home. Inspectors look for any major defects that may need to be repaired, such as broken windows or a leaky roof. They also check to see if the home’s wiring and plumbing are up to code. If any repairs are needed, the inspector will provide a report detailing what needs to be fixed.
8. Expecting the Seller to pay for things uncovered in a home inspection.
Although it is not common, it is possible to negotiate the price of a home down if the home inspection uncovers something.
9. Trusting a pre-listing home inspection from a random person.
If you’re considering purchasing a property in a competitive market where multiple offers are commonplace, the seller may have already ordered a home inspection prior to listing their home. However, it’s important to exercise caution as the home inspection industry is relatively unregulated and as such, the inspection may not be accurate or comprehensive. It’s always advisable to get your own home inspection but if you decide to use the inspection ordered by the seller, be sure that it was completed by a reputable inspector at a trustworthy company.
10. Low-balling in a hot market.
Making an offer that is lower than the market value is a bad idea when you are trying to buy a newly listed home. The sellers will just look for another offer, and you will probably not end up buying the home. You should know how much the home is worth and offer that amount. Your realtor can help you with this.
11. Not anticipating the closing costs.
In addition to land transfer tax and lawyer fees, there may be other costs.
Related: You can read more about closing costs here.
12. Not understanding the taxes you’ll need to pay.
There are a lot of different taxes that you have to pay when you are buying a house. This includes the provincial and city land transfer taxes, the municipal property taxes, and the HST on legal and real estate services. If you are a non-Canadian citizen, you will also have to pay the Non-Resident Speculation Tax, which is 15% of the purchase price.
Related: All About Taxes in Real Estate
13. Falling in love with the staging and not the home.
While it may be tempting to get caught up in looking at all the beautiful staging, it’s important to remember that you can envision your own furniture in the space and to not get too distracted by the current furnishings.
14. Getting too excited and losing sight of what you wanted/needed.
Don’t let the flowers blind you to what you really need in a house. It’s normal for your wants and needs to change while you’re looking for a house, but don’t forget what you wanted in the first place.
15. Not researching your school district before buying.
The Toronto District School Board operates a catchment system for its schools. You can find the catchment area for your school by researching it on the TDSB website.
We have created a map that shows all of the schools in Toronto and their Fraser Institute rankings.
16. Buying your first home first, when it might be a better ideal to buy your second home first.
While it may be expensive to buy or sell property, it is important to buy as much as you feel comfortable with from the start. This way, you won’t have to move again in a few years.
You can read more about buying your second home as your primary residence here.
17. Being short-sighted in a hot market.
If you’re buying a property when prices are increasing, you should be aware that you will most likely have to pay MORE than the last comparable price. The extra $1,000 you’re not willing to pay now will become the starting price for the next comparable property. An increasing market can be thought of as a set of stairs, with each new sale moving everyone up a step.
18. Expecting to see a home with super short notice.
In a hot market, you will be able to see the home you want to quickly. However, if the home is currently tenanted, the owner is legally required to give the tenant 24 hours notice of any showing.
for Sale If you’re considering buying a home, there are a few things you should know about touring homes for sale. When you tour a home for sale, the real estate agent representing the seller will be there with you. The agent’s job is to represent the seller’s interests, so they may not be forthcoming with information about the home that could negatively impact the sale. It’s important to have your own real estate agent with you when you tour homes for sale. Your agent can give you unbiased information about the homes you’re considering and help you make an informed decision. If you’re thinking about buying a home, here’s what you need to know about touring homes for sale: The real estate agent representing the seller will be there with you during the tour. The agent’s job is to represent the seller’s interests, so they may not tell you about anything negative about the home that could impact the sale. It’s important to have your own real estate agent with you when you tour homes for sale. Your agent can give you unbiased information about the homes you’re considering and help you make an informed decision.
19. Not being respectful of the Sellers and their home.
It is not appropriate to enter someone’s home and make fun of their decorations or how they live. It is also not OK to take photos of the bear on their bed and mock them on social media. Additionally, it is not OK to keep your muddy shoes on and walk through their home. Finally, it is not ok to be late for a showing or just not show up.
Related: Showing Etiquette for Buyers
20. Naively thinking the Seller isn’t videotaping or recording you in their home.
The cameras are usually in strategic locations and the Seller (or their agent) can hear every word you say. Many sellers now have cameras installed in their homes and can see and hear everything that happens during a showing. Avoid discussing your motivations, how much you love or hate the house, or how much you’re willing to pay while you’re in the home.
21. Not being ready to compromise.
Unless you’re Drake, it’s unlikely you’ll find a house that meets all of your criteria. You may have to be willing to compromise on location, size, or condition.
Related: Get Ready to Compromise
22. Failing to understand what the bank appraisal is and how it might affect you.
The mortgage lender will appraise almost every home that needs a mortgage, so it’s important to understand what will happen if the bank appraises your home for less than the agreed-upon purchase price.
Related: You can read more about Bank Appraisals here.
23. Not filing your income taxes.
You will need to have your income taxes filed and up to date before you can get a mortgage from a bank, so if you have been avoiding it, take care of it now.
24. For condo buyers: not reading the status certificate and having it reviewed.
The status certificate is a document that contains the financial and legal health of your condo board and needs to be reviewed by your lawyer.
You can read more about status certificates and the status certificate condition by clicking the link below.
25. Going in with a firm offer without having done your due diligence in advance.
Bidding wars can be very competitive, so you’ll want to get your financing in order and get a home inspection done before you submit your offer.
Related: How to Win a Bidding War
26. Giving more than a $100,000 as a deposit.
If you need to provide more than $100,000 for a deposit on a property in Ontario, you can either split the funds between the brokerages or have your deposit held in trust by your lawyer.
27. Scheduling too many showings in one day.
Homeshopping can be tiring, especially if you visit too many houses in one day. A good rule of thumb is to see no more than six to eight houses in a day, so that you can remember each one and don’t get too overwhelmed.
28. Buying the most expensive home on the street and not understanding the ramifications of that.
The value of the cheapest and most expensive homes on a street are influenced by the values of the homes around them.
Related: Understanding a House’s Value
Related: Understanding a Condo’s Value
29. For condo Buyers: not understanding the rules.
Even though you own something, you might not be able to do whatever you want with it.
Related: Click here to read 14 Misconceptions About Condos.
30. Driving your own car while house hunting with your REALTOR.
Your agent can teach you a lot about the buying process while you’re driving around and looking for parking.
31. Not reading what you’re signing and understanding the legal paperwork.
When you purchase a house, you must sign a large amount of paperwork.
Related: Read what all that Real Estate Paperwork means.
32. Thinking you don’t need an agent to represent you.
Although you may be able to find homes online and visit open houses without the help of a REALTOR, there are a lot of other aspects of their job that they can help with.
Why is it important to have an agent represent your interests? It is important to have an agent represent your interests because they can help you navigate the complexities of the entertainment industry and ensure that you are getting the best possible deal.
33. Not going into the scary unfinished basement.
While your REALTOR can help you with any problems you find in the basement, it’s important that you explore the entire house, not just the kitchen. Inspect the property for signs of pests, water damage, and take a look at the electrical panel.
34. Not asking about the neighbours.
Always ask about the neighbours.
Before you choose your next neighbourhood, ask yourself these 88 questions.
35. Not wanting to commit to one agent by signing a Buyer’s Representation Agreement.
An agent who is committed to working for you has many advantages. The agent represents your interests and there is no cost to you. The Seller pays the Buyer’s agent.
Related: Read about the Buyer’s Agent’s role here.
36. Not budgeting for all the repairs you’ll inevitably have to make as a homeowner.
You will be responsible for a lot of different things as a buyer, both big and small. budgetary planning is a big part of this role.
What is the cost of owning a home? It depends on many factors, including the size of the home, the location, the age of the home, and the condition of the home.
37. Not informing yourself about the unsexy stuff.
An agent who is knowledgeable about a home’s roofing, wiring, drains, and plumbing can be very helpful in ensuring that you are making a wise purchase. Be sure to ask your agent these types of questions so that you can be as informed as possible before making a decision.
Related: 10 Questions to Ask Before Making an Offer
38. Not talking to a home insurance broker in advance of buying.
You will not be able to get a mortgage unless you have home insurance, so make sure that there are no problems with the home (or with your insurance history) that would make it uninsurable.
Related: All about Home Insurance For First Time Buyers
39. Not having serious conversations with your spouse before embarking on the house-hunting adventure.
Do you have any dark secrets in your credit history? Are you planning to have kids? How far would you be willing to commute for work?
For more tips on buying a home with your spouse, click here.
40. Thinking the daily listings email that your agent sends you is the only option to get listings.
All Toronto agents have access to Collab, a system used to search for homes and communicate with your agent. If your agent doesn’t have access to Collab, you should find a new one.
Related: Buying with the BREL team
41. Expecting showings to be scheduled in the early morning or late at night.
Sellers are not likely to let you into their property outside of business hours, and if they do, you will probably only be given a 15-minute window to look around – not nearly enough time to explore what could potentially be your next home.
42. Not exploring the neighbourhood during the day AND at night.
Whenever you can, it’s a good idea to explore your neighborhood so you’re familiar with it and can feel comfortable there. This is especially important to do at different times of day and night, not just when it’s light out and people are around.
Related: 88 Things to Consider About the Neighbourhood
43. Buying with the listing agent.
The listing agent usually does know the most about the property, but they are working for the Seller. Their job is to get the best price and conditions for the Seller, not for you.
If you want to buy a home, it’s usually better to buy with the listing agent. The listing agent is the person who represents the seller and is usually the best person to help you buy the home.
44. Not recognizing the limitations of buying a tenanted property.
If you’re buying a property that has tenants, it’s important to check if those tenants are currently in a lease. If they are, the landlord won’t be able to evict them during that lease. And even if the tenants are only month-to-month tenants, the landlord must give 60 days notice (from the first of the month) before evicting them. So be sure to plan your closing date accordingly.
You can learn more about purchasing a property that is already being rented out by reading the linked article.
45. Believing the asking price is the real price.
The asking price of a home may be set low or high depending on the market conditions at the time of purchase. Your realtor can help you understand the true value of the home.
46. Using Realtor.ca and thinking you see ALL the homes for sale.
There may be a delay in listings being published to realtor.ca, and as a result, many homes may be sold before they are ever posted. You can ask a REALTOR to set you up to receive listings, or if you don’t know one that you trust, get in touch with us and we will set you up.
Related: The Truth About REALTOR.CA
47. Not walking around the outside of the house.
Inspect the bricks for cracks and evidence of water penetration. Enter the garage and examine the fence. Thoroughly walk through the yard rather than just looking through the window.
48. Buying a home during the first three months of a new job.
Since banks are reluctant to give mortgages to those who have just started a new job, it is important to have a stable work history in order to be approved for a loan.
49. Not getting a termite inspection if you’re buying in a termite-ridden area (which is much of Toronto).
If you don’t want to get a termite inspection, be prepared to pay for treatment and termite insurance.
Related: You can read all about termites here.
50. Getting emotional and trying to win a bidding war at all costs.
Although bidding wars can be competitive, you should only offer on a home if you are able to pay for it. Your agent should provide you with a written analysis of the value of any home you are thinking about offering on.
