Buying a new home is simultaneously one of the most exciting and one of the most stressful times in life. I recently went through the complicated process of going from browsing real estate listings to putting an offer in on a house, and I learned some really important things along the way.
A Home Inspection Can Reveal A Lot
Here's some of what you'll want to learn from your home inspection:
- Roof: How old is it? What sort of condition is it in? Watch for signs of animal waste on upper balconies or ledges near the roof — this can be a giveaway that someone else is already living in your new home. You'll want to know the state of the gutters. Chronically clogged gutters can lead to water damage and rot.
- HVAC: How old are the boiler and A/C units? They typically last around 10-15 years and can cost around $10,000 together to replace. But beyond that, how old are the windows? Old windows can make even brand new HVAC systems expensive to run if they're not energy efficient. The same goes for the insulation.
- Basement: Are there, or have there been, any signs of water damage in the past? A finished basement is a beautiful asset, but it also prevents an inspector from examining the state of the foundations properly. Be wary of quick-fix style renovations like newly installed drywall or thick paint over brick, stone and concrete.
- Termites: A termite inspection isn't always included in a home inspection report, but if you're buying in an area where they're known to be active, it's a good idea to ask for one.
When A List Price Seems Too Good To Be True
Does the gorgeous home you're looking at seem like a bit of a unicorn with its bargain price tag, much lower than other comparable listings in the neighbourhood? Even if the home inspection report looks OK, and the house seems nice on a visit, there are some external considerations to keep in mind.
- Location Concerns: Where is the home located? Is it just behind the train tracks or across the street from a power station? That might explain the discount. If you can do it tactfully, try speaking to the home's immediate neighbours or someone who lives on the street to get the full scoop. I visited a lovely house in Toronto that shared a wall with a housing unit where too many people were crammed into a space. Neighbours had called police to the address on several occasions. I got the full story from another neighbour.
- Neighbourhood Changes: Check around you for development plans on nearby lots. An idyllic location may end up dwarfed by a condo tower just a few years later. You can also look up whether there are any heritage rules to help maintain the community's aesthetic. In addition to looking at the house that's for sale, don't forget to look at what you'll be looking at across the street!
Keep Cool When Making an Offer
The offer process doesn't work like an auction. You can't see what other people have offered, and you only get one chance, so you have to go in with a price that you'd be comfortable with, without knowing whether that price gets you the house.
- It Can Move Fast: You may only have a few days to decide after viewing the property if you want to make an offer, so emotions tend to run high. I was viewing places at their open houses on Saturdays and Sundays that had offer deadlines on Monday or Tuesday!
- Bidding Wars Can Happen: When only a few houses are for sale and there's a lot of interest from buyers, bidding wars can send the price over asking. Keep your cool and set your limit according to what you can actually afford, not what you think it will take to get the house.
- Remember Added Costs in Addition to the Price: Ask your agent about land transfer tax if you already own a property, lawyers fees, and title insurance so there are no financial surprises when you come to pay for it all.
If In Doubt, Ask Your Agent
I thought I had a fairly good handle on how to be smart about buying a home, but I learned so much about what to watch for in the process - many things I wouldn't have thought of on my own - and how to accurately calculate the affordability of a new home beyond its list price.
The best way to cover all your bases is to ask your real estate agent to walk you through the process step-by-step, and inquire about everything I've listed here to make sure you're not missing anything. A good agent will be happy to do this and will be honest and thorough in their explanations.
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