Even if this is not your first real estate transaction, there are still a few things that can complicate your life. Maybe some of these factors did not cause any problems during the first transaction but you should not neglect anything during the second transaction.
Not only do you have to think about the financing but you have to sell the house that you currently own at the right time in order to avoid the financial burden of two houses for an extended amount of time.
In this document, we highlight the five most frequent mistakes owners make when buying a new property. Knowing these mistakes and the strategies to avoid them will help you make informed decisions before putting your house for sale.
1. Rose Coloured Glasses
Most of us dream of a better lifestyle and to move into a bigger or more luxurious house. Unfortunately there is often a discrepancy between our heart and our bank account. You fall in love with a property that you saw in your neighborhood but it’s already sold or you can’t afford it. If that "dream house" sold, no worries, we will find another. But the affordability part of this process should be tackled prior to even starting the search. You must have a pre-approved mortgage to get the ball rolling.
2. Ignore necessary improvements
If you want to obtain the best possible price for your house, you have to do some work to improve the perception to the potential buyers. The repairs do not have to be expensive, but if you accept to invest a little, you might leverage your investment by ten times or more when you sell. It is very important to do these improvements before putting your house for sale. Paint is certainly your best friend in this situation. Along with de-cluttering and presenting a spic-and-span home.
3. Do you sell first ?
You should plan to sell before buying. This will give you the leverage to make an offer on your dream home without having the condition to sell. If you receive an interesting offer for your house but did not start looking seriously for another one, you can insert a provision in your promise to purchase to make it conditional to buying another house, thus giving you some time to find a home. Or you can accept an offer with an occupancy that is further out, thus giving you time to find a home. This option might make you nervous, but we will go over the details in person so your mind can be put at ease.
4. Get a pre-approved mortgage
Several clients who are selling and buying simultaneously ignore the considerable benefit of a pre-approved mortgage. It does not cost anything and there are no obligations. It gives you an important advantage because you know your acceptable price range while looking for a house, but more importantly, it confirms to the seller (where you will be purchasing) that you have the required funds to buy the property. With such an advantage, your offer will be perceived much more favorably by the owner seller, even if your offer is slightly lower than the one of a non-qualified buyer. Don’t miss such a valuable opportunity.
5. Coordinating the two transactions
With these major transactions to coordinate and all the people involved (mortgage brokers, notaries, building inspectors, real estate brokers), the risk of miscommunication and oversights increase. Your real estate broker is more than qualified and capable of keeping track of dates and timelines to ensure smooth and easy-going transactions. This is precisely one of the reasons your broker is here, to give you peace of mind that the transactions are properly taken care of and to get you to the notary without any delays.
