They say that hindsight is 20/20. When it comes to making one of the most important decisions of your life—buying a house—the more you can learn about what to avoid, the better. Here is a list of the top 7 regrets that haunt home buyers:

1. Not buying sooner. According to TD Canada Trust's First Time Home Buyers Report for 2012, 55% wish they had purchased a home sooner and not wasted money continuing to pay rent. Many people get stuck waiting for the 'perfect moment' to jump into home ownership and when they finally do, they realize that the process wasn't as daunting or risky as they thought. It doesn't take long for new home owners to see the benefit of their investment. And with mortgage rates so low, it's a great time to get in there and just do it already!

2. Spending the full bank approval amount. Even though the bank has approved you for a specific amount, it doesn't mean you should go ahead and spend that much. Banks will often pre-approve an amount that essentially represents that maximum they think you can possibly afford—which is rarely the amount that you can comfortably afford. The general rule of thumb is to spend 20% less than the bank is wiling to lend you. For example, if the bank says you are approved for $450,000 you should look at spending approximately $360,000. Ultimately you still want to maintain a comfortable lifestyle and be in a position where you can address any financial emergencies and not worry that you have overextended yourself with a huge monthly mortgage payment. 

3. A long commute to work. The importance of location cannot be overstated. That's why the mantra "location, location, location" became so popular! According to a Trulia survey, 15% of home owners wish they'd chosen a home with a shorter commute. When you find that home you absolutely love and can't wait to return to it at the end of the day , the last thing you want is to be tacking on an extra hour to the beginning and end of your workday that ends up reducing the amount of time you get to spend enjoying your beautiful home. Of course, in some situations this is unavoidable, but it's really important to identify your top priorities and decide whether or not the house, and its location, meet your needs. 

4. Not getting a home inspection. According to the Real Estate Council of Ontario (RECO), 15% of home buyers surveyed wish they had completed a home inspection prior to purchasing. It is easy to get caught up in the feeling you have found the perfect home. Gut instincts are good, but investing in an expert opinion to look for major structural issues is even better. Refer to my previous blog for tips on how to choose a good home inspector. 

5. Buying to suit your present needs instead of looking to the future. While not overextending beyond your means is absolutely important, it's also wise to consider how your needs or priorities might be changing in the not-so-distant future. 34% of Trulia survey respondents reported they wish they'd purchased a bigger home. It may be worthwhile to weigh the benefits of buying a home you know you will grow into, especially if you can bank on higher earning potential in the future as you progress career-wise or combine incomes with a partner. 

6. Not having a clear understanding of the buying/selling process. Buying and selling real estate is complex with a lot of moving parts, not to mention life-altering, stress-inducing decisions to be made. RECO found that 38% of those surveyed regretted not having a better understanding of the buying/selling process. Taking time to research your rights and obligations as either a home buyer or seller will put you in the best position possible to avoid costly errors and potential heartbreak. 

7. Not using a Realtor. Despite what people may think, Realtors understand why it may be tempting to list your home For Sale By Owner (FSBO). However, in addition to being a great resource to help you navigate the process from start to finish, the stats show that, overall, Realtors sell homes quicker, easier, and get you a higher sales price than FSBO. On average, FSBOs take 19 days longer to sell, with roughly 20% of them eventually re-listing on MLS, which converts to a total of 68 days longer on the market than homes listed with a Realtor. According to data from the National Association of Realtors, in 2012 Realtors earned sellers 19% more on the final selling price than FSBO. What might seem like a risk-free, cost-effective strategy for selling your home can end up costing you more in time and money than listing with Realtor from the start.

Learning from others' mistakes helps avoid future regrets and disappointment. What advice would you give to someone looking to buy or sell a home?


Posted by Wally Fakhreddine on


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