Buyer beware: Don't make these common mistakes

By Patricia Leboeuf, Ottawa Citizen
There are few purchases that have as much emotional response - and financial commitment - as buying your very first house. And with a recent report by the Royal Bank of Canada showing continued low interest rates combined with a stable market to entice buyers, there's an increased chance of buyers making common mistakes on the way to home ownership.
"Sometimes they do things without proper guidance, proper inspections and they are lead astray," says Ottawa's Patricia Verge, a broker with Royal LePage and a 30-year real estate veteran. "It's a more difficult world shopping for houses than it used to be because there are so many more issues with homes now," including insulation problems and former grow ops.
Verge and the Ontario Real Estate Association urge buyers to avoid making decisions that could by costly by avoiding the following pitfalls.
1 Home inspection. Skipping on a home inspector can seem like a thrifty idea at first, but it's the single worst decision any buyer can make. The signs of trouble can be hard to spot and even new homes may not be spared. A home inspection "is absolutely critical," says Verge. Everything may look fine and the buyer may be emotionally attached to the house and not see problems right away, "but if they have to replace the roof and a whole bunch of other things, it can be expensive."
2 Wants versus needs. Make a list separating what you want from what you really need since it can be easy to lose focus on what's necessary when you're presented with the extraordinary. "You first want to look at where you want to live and what you can afford," says Verge. "It's sort of a balance between wants and needs. You have to go with your needs first."
3 Emotional attachments. It can be very hard to keep your emotions out of the buying process when you're looking at a place that could become your home. But not staying detached or not listening to your real estate agent can cause you to rush into a costly mistake, warns Verge.
4 Budgeting. Canadian laws are slanted towards protecting home buyers and mortgage companies should limit a buyer's debt ratio to no more than 40 per cent. But that doesn't mean they won't let you cut it close to the limit. "I don't recommend that my buyers buy to the max because then they won't have any money to play with," says Verge. "If something goes wrong or one of them loses a job, it can be very upsetting."
5 Background check. Research and a real estate agent is your best protection when buying a home, but a bit of on-site exploration also doesn't hurt. "Knock on the neighbours' doors and ask for information," says Verge. "It's amazing how much people will talk."