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Money Matters by Mom2KG

Posted by admin on September 10, 2009 in Mom2KG Columns, Real Estate

Our regular columnist is back to complete her series on buying and selling her home.

In my last post, I spoke about tips to sell your home. This follow-up will give you some tips on buying a house.

1. Pick a Neighbourhood and Pick your Neighbours. Take your time and do your research about where you want to go. Do you need schools, transportation, proximity to airports and highways (yes, this is pretty obvious stuff)? Once you’ve narrowed down your search, spend some time actually driving and walking around. Are there lots of kids/too many kids? Is there somewhere within walking distance to grab a coffee? Are the neighbours in bed at 9 p.m. or blaring with a garage band at 11 p.m? Ask yourself if you can really live there happily for at least a few years.
2. Do your financial homework. How much house can you really afford? Interestingly, I got a lot of advice to “stretch myself” and buy a house that seemed slightly out of reach. Go back and forth between lenders, playing their latest offers off each other. Figure out how much renovating you’ll want to do, and whether you should finance that yourself, or ask for home improvement loans. Spend lots of time on this, and make sure you know all the ins and outs of your mortgage. For example, how much can you increase the payments every year, and when?
3. Don’t get into a bidding war. Sometimes this is inevitable, especially in high-stakes areas in Vancouver and Toronto. Be comfortable with the maximum amount you’re willing to spend. If it looks like there’ll be multiple offers, I suggest going in at your best offer right away (but listen to what your real estate agent tells you). If you’re the only one at the table, don’t panic and bid against yourself (i.e. talking yourself up to a higher price to make sure you get the house).
4. Get a home inspection. Just trust me on this. It’s worth the few hundred dollars you’ll spend. Good inspectors have no interest on what you’re paying for the house. They should just want to tell you whether or not the place is sturdy or about to fall down from termite damage on the next windy day. It’s sometimes difficult to get a home inspection clause into an offer, but it’s a cheap insurance policy.
5. See the house at least twice. The open house will fool you into thinking that there’s more interest than there is. All those people checking the place out – they’re nosy neighbours. An open house will invariably show pretty well, with fresh flowers, room spray and recent vacuuming. Try to go another time when no one else will be there and the house is more lived-in. Take your time and really “see” the rooms, warts and all.