10 Worst First-Time Homebuyer Mistakes

10 WORST FIRST-TIME HOMEBUYER MISTAKES

Are you gearing up to buy your first place? Arm yourself with these tips to get the most out of your purchase and avoid making 10 of the most costly mistakes that could put a hold on that sold sign.

Not Knowing What You Can Afford
 What the banks says you can afford and what you know you can afford or are comfortable with paying are not necessarily the same. If you don’t already have a budget, make a list of all your monthly expenses (excluding rent). Subtract this total from your take-home pay and you’ll know how much you can spend on your new home each month.

Skipping Mortgage Qualification
What you think you can afford and what the bank is willing to lend you may not match up, so make sure to talk to your mortgage broker and get pre-approved for a loan before placing an offer on a home. Beware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, like finance a car purchase.

Failing to Consider Additional Expenses
Once you’re a homeowner, you’ll have additional expenses on top of your monthly payment. You’ll be responsible for paying property taxes, insuring your home against disasters and making any repairs the house needs. If you’re purchasing a condo, you’ll have to pay maintenance costs monthly regardless of whether anything needs fixing because you’ll be part of a building strata.

Being Too Picky
Go ahead and put everything you can think of on your new home wish list, but don’t be so inflexible that you end up continuing to rent for significantly longer than you really want to. First-time homebuyers often have to compromise on something because their funds are limited.

Lacking Vision
Even if you can’t afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford. If the home meets your needs in terms of the big things that are difficult to change, such as location and size, don’t let physical imperfections turn you away.

Being Swept Away
Minor upgrades and cosmetic fixes are inexpensive tricks that are a seller’s dream for playing on your emotions and eliciting a much higher price tag. If you’re on a budget, look for homes whose full potential have yet to be realized. First-time homebuyers should always look for a house they can add value to, as this ensures a bump in equity to help you up the property ladder.

Compromising on the Important Things
Don’t get a two-bedroom home when you know you’re planning to have kids and will want three bedrooms. Don’t make a compromise that will be a major strain.

Neglecting to Inspect
Before you close on the sale, you need to know what kind of shape the house is in. You don’t want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs.

Not Choosing to Hire an Agent or Using the Seller's Agent
Once you're seriously shopping for a home, don't walk into an open house without having an agent. Agents are held to the ethical rule that they must act in both the seller and the buyer parties' best interests.

Not Thinking About the Future
It's impossible to perfectly predict the future of your chosen neighborhood, but paying attention to the information that is available to you now can help you avoid unpleasant surprises down the road.

3 Classic Mistakes Sellers Make when Staging a Home for Sale

Posted by Carole VanSickle on Tuesday, October 11th 2011

According to numerous surveys, potential buyers make critical judgments that determine whether or not they are going to purchase a home within just minutes of entering that home. Some research indicates that they make that decision within seconds of opening the front door! In order to maximize a property’s appeal, it is vitally important to enhance the advantage initiated with good “curb appeal” by staging the interior of the home as well. You have probably heard real estate agents talking about baking cookies to give a home a, well, “homey” feel, but baking alone does not stage a home adequately in today’s competitive market. In this report, we’ll review some of the “classic” mistakes that people make when staging a home and how to fix them for optimal buyer appeal.

Classic Mistake #1: Mistaking Clutter for Décor

You know that you’re supposed to remove your personal items from a staged home when possible to make it easier for buyers to imagine living there themselves. However, you also should stick to minimalism when it comes to “décor” items. The seller’s personal taste should be as little in evidence as possible, which means that not only should the million “Precious Moments” figures be packed away for the sales process, but excessive containers, sprays of dried flowers and even lighting should be removed. Does this mean that you should eliminate all lamps and flour canisters? Not at all! But it does mean that the five tiffany lamps could probably be thinned to one or two and outside of the classic “flour, sugar, coffee and tea” canisters, extra kitchen storage should be out of sight as well. When it doubt, pack it up! Your buyers want to see clean, clear surfaces that are open for their own personal decorative interpretations.

Classic Mistake #2: Out of Sight is Not Necessarily Out of Sight

When you consider purchasing or renting, do you simply walk through a property and then leave? No! You look around; you open closets and you peer inside cabinets to check out the storage options. And in today’s competitive market, storage is huge. So you need to stage the interior of your closets and cabinets the same way you stage the rest of the rooms in a home: with clean, clear lines and surfaces. If cabinets are full of dishes, that’s definitely life. But you want it to be very clear to buyers that they will have plenty of room for storage. Pack up extra dishes, seasonal items and any non-uniform glasses or storage containers so that your cupboards are neat and organized. Is this the way your buyer likely lives? Probably not. Is it how they wish their cupboards looked? Probably so. And giving them the cupboards, cabinets and closets of their dreams could be the thing that pushes a buyer toward your property and away from another one.

Classic Mistake #3: Small Repairs can be a Big Deal

While it may not be necessary for you to oil the hinges on the front gate in order to get a good price on your home, it could make a huge difference in how a would-be buyer perceives your property. Often, sellers are so consumed with major repairs on their homes that they forget the little things. And, unfortunately, it’s the little things that buyers tend to notice. Hit all hinges with a little WD-40 and if you have cracks in the wall, dripping faucets or burnt-out light bulbs in the bathroom vanity, take a few minutes – or even a few hours – to address these tiny cosmetic details before a buyer comes to view your home. It will make the property more inviting and can even make bigger issues like the fact that you couldn’t afford to paint this year seem like something easily-remedied because the buyer has already started to imagine living there.

Staging is definitely a delicate “science,” and there are a lot of schools of thought out there on how to get the most out of your home when it comes to presenting it to buyers. Generally speaking, “less is more” in nearly all staging decisions, so if you opt not to hire a staging professional, just go with your gut when it comes to removing items from the general viewing area and not your emotional attachment to an item. Remember, you get to take that item with you, so if it attracts you personally rather than contributing to the look of a room you are better off removing it so that your buyer can better imagine themselves in that setting.

Thank you for reading this article in the Bryan Ellis Real Estate Letter’s Educational and Training Series.

lawlessbrown.com

Seeing through home sellers' camouflage

by Stephanie Farrington, Bankrate.com


Mortgage rates have started to climb again. While that's probably a good sign for the economy, it may also be a wake-up call for people who have been hitting the snooze button on the time in which they hoped to buy a house.

If you're one of the many Canadians just entering the buyer's market, it's easy to get caught up in the critical aspects of home buying and forget some of the details. The clock is ticking, rates are rising and what matters in a house is location, location, location, right?

Yes and no. Location matters, but if you're not careful and observant when making your choice, you could get a great location and still end up with a money pit.

In some cases, people anxious to sell their home have been known to make a few cosmetic adjustments to hide the areas where their house might need a little extra care or even some serious repairs. Here's what to watch out for.

A fresh coat of paint in the basement

Dean Langner, a Canadian Residential Appraiser, or CRA, with Kors & Associates, in Victoria, has worked for 15 years as an appraiser and home inspector. During that time, he's seen a lot.

"One thing I find suspicious is a recently painted concrete floor and two or three feet of foundation in an unfinished basement," he says. "A lot of times, basements will leak, and they'll get that mineral stain around the concrete. Before they sell, some owners will cover it up with a coat of paint."
Langner says if you suspect a problem, go back for a second visit. "The only way to tell is to wait for a good heavy rain and visit again to check for moisture. If you're still uncertain, you can hire a plumber with a camera, and they can look down the pipes."

Checking pipes like this is not done in the course of a usual inspection, but Langner says it's worth making it a condition of the sale if you're really worried, because drainage problems can be very difficult to fix.

New sewage or drainage pipes

Around the foundation of every house is a permanent, porous piping system, called weeping tile, that acts as a drain and keeps water from entering your basement. "Over time, this pipe can fail. It can fill with debris and mud and stuff, and it is not easily fixed," says Langner.

In older houses, weeping tile isn't even made of pipes -- it's a series of half-round, clay tiles placed next to each other. So, if the house or the land shifts, you could be in for trouble.

The money you spend to have a plumber look at your drains could end up saving you thousands of dollars, to say nothing of the time and inconvenience of digging a trench around the perimeter of your house to replace the draining system.

A recently pumped septic tank

Jeffrey D. Leiser, author of "The Home Buying Inspection Guide" and "You Can Sell Your House: For Sale By Owner," has his own cautionary tales about plumbing. "The worst is when a home owner is hiding problems with a septic or sewer system. Having the septic tank pumped out prior to an inspection can give the appearance of a well working system," he says. "A failed septic system can cost well over $20,000 in replacement costs."

He says sewer systems can also be bladed -- which involves using a long tube with a rotating blade at one end to clean pipes and cut out blockages -- so that they appear to be working without backups. But, again, this is a short-term solution to an expensive, long-term problem.

Unusual smells

Your senses are your first and one of your best methods of avoiding deception. Mould smells like mould. It's easy to hide the visual signs of mould with paint, but it's a hard smell to mask. Don't be afraid to sniff around any area that makes you feel uneasy.


Suspicious piles and large plants

If something looks out of place, ask about it. A pile of bricks stacked against the side of the house could just be a pile of bricks, but it could also be a way of hiding a cracked foundation.

That newly planted yet mature tree in the back yard, the one in front of the retaining wall? Look behind it. Just as people will paint over stains, they sometimes landscape over cracked retaining walls or other problem areas.

Protect yourself

Follow your gut. If you think someone is lying to you, ask more questions and use your written offer as a means to get the truth. Contracts are there to protect you, and conditions of sale are a good way to ensure you're covered. If you're unsure about how to do this, ask your real estate agent or your lawyer, but do not go in unprotected. It's usually easier to avoid buying a problem than it is to fix it.

If, in the end, you find yourself left holding the bag despite your best efforts, where can you turn?

Danny Berehula, director of the Saskatchewan branch of the Better Business Bureau, or BBB, says the BBB will try to help, but the help they can offer is limited because the transaction does not typically take place between a business and an individual but rather between two individuals.

"We're another resource for them, but most people, when this happens, would probably want to call their lawyer," he says. "There are laws in place, and if it's a serious matter, then it will become a legal matter. They can use us as a mediation service, but once it becomes a legal issue, we stand out of it."

So, take your time and think through your purchase carefully. All of the experts agree on one point -- sometimes you have to accept a few problems to get your dream house, but it's best to understand how much the trouble your home might cost you before you sign on the bottom line.

http://ca.finance.yahoo.com/personal-finance/article/bankratecanada/1597/seeing-through-home-sellers-camouflage

lawlessbrown.com

No Relief for Renters

So I'm reading the Saanich News and what do I see:

"No Relief for Renters"

The cost of rental housing edged higher in Greater Victoria through the fall while the region's vacancy rate remained unchanged at 0.5 per cent. The average cost of renting a one bedroom apartment in October rose by $50 to $764, compared to $716 in October 2007, according to data released from the Canadian Mortgage and Housing Corporation. The average price for a bachelor suite rose $37 to $626, two bedrooms increased $58 to $965 and three bedrooms were $124 more expensive with average rents reaching $1 180.

Give us a call and we can show you how to take advantage of this.

Krista and Sherri

www.lawlessbrown.com

Great Links to Let You Know What is Happening in the Housing Market

MCAP Expert Partner, NEWS LINKS

Get in the know with MCAP's Expert Partner NEWS LINKS! Your MCAP Expert Partner offers NEWS LINKS for you to stay current, educate clients, and provide added value to referral sources. The market landscape is changing rapidly so be sure to open MCAP's monthly NEWS LINKS. NOVEMBER/ DECEMBER 2008 NEWS LINKS: Canadian Mortgage Trends NOVEMBER: News from CAAMP 2008 http://www.canadianmortgagetrends.com/canadian_mortgage_trends/ CTV.ca DECEMBER: What's in store for Harpers political career? http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20081202/harper_future_081202/20081202?hub=Politics The London Free Press DECEMBER: New rules meant to 'raise the bar' http://lfpress.ca/newsstand/Business/2008/12/02/7602536-sun.html Canada.com NOVEMBER: Canadian mortgage lenders in 'good shape' http://www.canada.com/victoriatimescolonist/news/story.html?id=25f6879c-27c5-42bc-af35-2bfb2a37c249 cbc.ca NOVEMBER: Mortgage rate chopped by 2 Canadian banks http://www.cbc.ca/money/story/2008/11/26/canada-mortgage.html MCAP'S FAVOURITE WEBSITES: Canadian Mortgage Trends- http://www.canadianmortgagetrends.com/ Canadian Mortgage Professional- http://www.canadianmortgageprofessional.com/ Genworth (Home Ownership Information)- http://www.genworth.ca/homeownership/index.html Respectfully Krista and Sherri www.lawlessbrown.com

The Best Investment Ever

Victoria is officially a buyer's market with more properties on the market then buyers. What a wonderful time to build your nest egg. Have you ever thought about buying a rental house than balked thinking it would be too difficult?

Let's make 2009 the year to build your nest egg. There is a large selection of houses out there. I personally like single family houses with a suite. I like to have houses with three bedrooms in the upper part of the house and a two bedroom in the bottom. Rents are averaging $600 a bedroom which means on a three bedroom you could be making $1700 - $1800 a month in rent and on a two bedroom, around $1200. That covers your mortgage and more especially if you have an interest only mortgage or a variable rate. Prime is 3.5% right now.

Now you may be asking yourself, "where am I going to get a down payment?" Do you have a house now? Do you have equity in it? Why not make that equity work for you? Pull it out and use it as a down payment for another house. I have done this three times thus far resulting in four houses and my partner, Sherri, has done this twice resulting in three houses for her.

My sister was my inspiration. She came back from travelling with this goal of buying one house a year for the first five years of living in Victoria. Both our families became partners to spread out the risk and it is one of the best decisions we have made. We now own four houses and are considering a fifth. My sister gets mad when she doesn't reach her goals!!!

She does all the landlording and I do all the mortgages making it all work. If you want, I would love to show you how. Our goal is financial independence in the future and we're closer and closer to our goal everyday.

Cheers
Krista
krista@lawlessbrown.com
http://www.lawlessbrown.com

PS> you should see the tax write offs involved with a rental property!!!! but that's for another blog at another time.

FREE Newsletter

So we have started a monthly newsletter. It's full of interesting tidbits about the housing market, bank rates, jokes, cartoons, Did you knows? etc. It will get sent out to your mailbox once a month and is quite an enjoyable read. If you would like to receive this FREE newsletter, just go to www.lawlessbrown.com and sign up. Enjoy.

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http://www.squidoo.com/LawlessBrownMortgageTeam

Enjoy
Krista and Sherri

www.lawlessbrown.com

Publish Post

Real Estate Investing in Victoria

The funny thing about investing in Victoria is that it hasn't really been hurt by this market. The prices have gone down however the rental market is still hot. Only 5 in every 1000 rental suites are vacant and rents are high.

So we both invest in Victoria and between us we have eight rental suites and two vacation rentals. We have yet to have one of the suites vacant for more than a month and have been extremely lucky with tenants.

Some of the rentals have interest only mortgages with variable rates which make sense when they are truly income properties. Some of them have variable rates and pay off principle and well we keep researching to see what the best mortgage is for our needs. We love having rental properties and know that these will be our nest egg in the future.

We also love to show people how to be real estate investors. Once you have everything set up..they basically take care of themselves. We can show you how and tell you about the pros and cons.

The best thing we did was join the Rental Owner's Management Society. The other cool thing we did is follow our passion and become mortgage brokers. The real estate market is fascinating so why not work in an industry you love?

So over dinner one night, the Lawless Brown Mortgage Brokers came to life. Thank you so much to Arlene Modderman for helping us become part of Mortgage Depot. What a wonderful company full of knowledgeable people to assist us in being the best that we can be. The other wonderful thing we did was hire a dear friend of ours to help us design our website and between her and our dear friend Janis, the following was designed

www.lawlessbrown.com

We loaded it with free info and a free newsletter. We hope the info on it will motivate people to invest in the Victoria Real Estate market and set themselves up for a financially independent future.