Buying your first home is an emotional experience that most people never forget. Depending on the circumstances, it can be good, bad or ugly. When we bought our first home (a small two bedroom condo), we soon realized that we were real estate rookies that had a lot to
Related: Lessons from a First-Time Landlord
Here are some of the things we learnt when we bought, and how first time home buyers can learn from our mistakes.
When we bought the condo I wish we would have scheduled a pre-possession inspection. A quick inspection should be done 48 hours before possession day to ensure the property is as advertised and all conditions will be met on possession day. Turn on all the lights, check the condition of the floors/walls, inspect appliances and ensure hot water is running to all taps.
We didn’t even know this was an option but I wish we would have done it. On possession day the floors were dirty, there were stains on the walls and a couple of the outlets did not work. Nothing more than a minor annoyance but it could have been much worse, and a walkthrough prior to taking possession would have solved it.
Choosing the Right Mortgage
For most people I would recommend that they stay away from the 5 year fixed rate. Lenders play into the emotional aspect of buying your
first home. They pitch the 5 year fixed mortgage rate as offering stability and security for buyers.
In reality, they make the most money off of it and it generally costs more to go with the 5 year term. I would recommend considering a 2-4 year term, fixed or variable, as the interest savings are likely well worth it. We went with the 5 year rate initially – and I regret it to this day.
Independent Home Inspector
An obvious tip is to get a home inspector, but many people don’t realize the importance of hiring an independent home inspector.
When we got our condo inspected, we trusted our realtor to provide the name of a reputable and diligent home inspector. What we didn’t know
was that the realtor gets a commission for each referral they made, so they had an incentive to refer us to him. The inspection went okay with only a couple minor issues noted, but I still wonder what would have been found if an independent inspector was used.
When we bought our condo we were led to believe there would be multiple competing offers made that same night if we did not make an offer right away. We felt we had no choice but to make an offer, so we did. I feel like we caved under the pressure and I wish we would have stepped back and not succumb to the pressure sales tactics. It was a silly mistake in hindsight, but buying a home (especially a first home) can be very emotional which can lead to mistakes.
First time buyers should never get into a bidding war and if they feel pressured at any point, they should step away and reconsider the purchase.
Conclusion: Our first real estate purchase taught us a lot of little things I wish we would have known beforehand. Live and learn, I suppose, but hopefully there are some potential first time buyers out there who can learn from our mistakes and not make the same ones we made.
How was your first home purchase? Did it go as planned?