At EastVan Townhouses we work with all types of buyer and sellers, some of those being first time buyers. Often we see first time buyers that are working with other agents make the same mistakes and we sympathize for them as they can easily be avoided. Here are 5 common mistakes that first time home buyers make:
1) Search for their Dream Home
Stats show that people move every 5 years. Jobs change, people move, families grow (and shrink), and people adapt where they live to fit with these changes. In the Vancouver housing market buying your dream home right away is highly unlikely for most people. For those that are fortunate enough to be able to do it, great, but for the rest of us it’s all about getting into the market. Perhaps your ideal home is a cute townhome complex with 4 bedrooms, 2000 sqft with some outdoor space? Or maybe you want a detached house in Kits Point that has soaring water views?
Everyone has a different end goal but it’s about taking the steps early on to get there. First time buyers may be better off buying whatever they can afford and renting it out if that doesn’t suit what they need to live in. As the market changes at least you are IN the market and will build some equity that way. I find people that are saving for their ideal home typically don’t save at the same rate that the market moves which leads people to getting priced out.
2) Unrealistic of what to Expect
Buying a home is a huge investment and likely one of the biggest investments that you will make. With that being said just because you are putting down a $200,000 down payment it doesn’t mean that you are going to get a house from MTV Cribs. Vancouver is an expensive market and we need to understand that. We can’t compare it to middle America where homes typically cost less than the average downpayment in Vancouver. We need to understand that we pay a premium to be in this city whether we like it or not. A common reaction to a recent sale price is “It wasn’t worth that much”, but truth be told homes are worth whatever someone will pay for them. With the amount of pent up demand from buyers in this market we are seeing sale prices that were unheard of one or two years ago and today are the new reality. It’s important to stay positive and realistic when looking at recent sales.
3) Not Being Prepared Before they Start the Search
People that buy investment properties or buy and flip multiple properties every couple of years have one thing in common. When they see a property that they want they are ready to pull the trigger. It’s common for first time buyers to want to start the process of house hunting before they have everything lined up for when they do find the right fit. This can lead to them scrambling and missing out on what may have been their next home. It’s important that first time buyers, like everyone else, have their financing in order and are ready to view properties quickly as the market does not allow for weeks of procrastinating. As subject free offers become more and more prevalent it is important that you are working with a mortgage broker that is familiar with the process.
4) Over Negotiation
My job as a Realtor is quite broad. In the grand scheme of things I help people buy and sell real estate but I also help people reach their real estate goals. For sellers I try to maximize their profits and buyers I try to find them the right fit for the right price. When it comes to negotiating for buyers I pride myself it securing the best price for each client. With that being said there comes a time in each transaction where a buyer or seller needs to accept the terms and move forward. Often times I see first time buyers getting caught up in a couple of thousands of dollars. Don’t get me wrong, I WANT YOU TO SAVE THAT MONEY, however it is important to think about the big picture before walking away from a property because the seller won’t come down to your price. In a typical mortgage a few thousand dollars will be very minuscule in a monthly payment and if you plan on holding a property for a few years, the appreciation will likely make up for that in a hurry. I don’t suggest buyers over pay, AT ALL, however sometimes the ego needs to be left at the door if you really want a certain property.
5) Focusing on Cosmetic Appearances
Often the best deals are the homes that are tenanted and the tenant doesn’t keep the place in good shape. This can also be very difficult for a first time home buyer to appreciate as the walls may be dirty, the kitchen sink may be full of dishes and the furniture may not fit. A paint job, some new flooring and a good clean can really transform a home. If you have the time and are ok spending a few extra bucks you are likely to end up with a better home at a better price. Staging is proven to work in the favour of the sellers. Remember not to fall in love with the furniture or art work that is going to be leaving with the sale of the home.
Are you asking what are next steps? Then read our article “What is the Buying Process?“.
At EastVan Townhomes we pride ourselves in helping first time buyers through the process. We educate all of our buyers to help them have the best chance possible at finding the right home for their needs. If you have any questions we would be happy to chat about the market or about how we can help you find your next home.
– Casey 604-363-7858