When making the major financial decision to purchase a home, it is very important to protect your investment. Here is a handy list of top 5 mistakes people make when shopping for a new home.

Neglecting to:

1) Establish a Realistic Price Range:

Many home buyers waste a lot of precious time looking at houses that they can’t afford. Before you start looking at real estate, it is highly recommended to first apply for a pre-approved mortgage. That way, when you’re ready to make an offer, you’ll know exactly how much you can afford.

2) Sell your existing home first:

Although selling your existing home before finding new one can be a little complicated, any inconvenience will be offset by your ability to make a quick offer with cash in hand. Deals which are contingent on the sale of your house will slow the home buying process considerably and will not give you the advantage in a competitive market.

3) Define a “Must Have” List:

Create a precise checklist of the features a property must have to be suitable for your needs.

Ask:

- What TYPE of home do I want? (condo, town home, house, newly constructed)

- What do I NEED in a home? (“Must Haves” e.g. # of bedrooms, # of bathrooms, garage)

- What do I WANT in a home? (Items which would be “Nice” to have but are not essential)

4) Research Neighbourhoods:

Location is just as important as the home itself! So it’s vital to research the community!

Ask:

- Where do I want to live?

- What is the best location for my living situation? (work, schools, family)

- What amenities are important to me? (shopping, public transit, recreation centres, parks)

- Does this neighbourhood have a good reputation? (Low Taxes? Low Crime?)

- In the future, will this neighbourhood increase or decrease in property value?

Research Tools: The Internet is a great research tool.  You can find out a great deal about community news and statistical data. It’s also a good idea to talk to local residents who can tell you first hand what it’s like to live in the neighbourhood.

5) Recognize a “Bad Deal”

When buying a home it is natural to seek the best possible deal, the suitable home for the lowest price. However, be very cautious to avoid dishonest sellers! A low price upfront can cost you in the end if the property has unseen problems. Asking the right questions and paying close attention to the answers can be vital in avoiding “bad deals”. Shifty answers to any of these questions should raise warning flags of possible dishonesty.

Ask:

- Does the property have liens that the seller is unable to clear?

- Does the seller own the property in its entirety?

- Is the possession date constantly being pushed back?

- Does the seller have a new property or living situation lined up?

-  If it seems like the property needs some work, be especially cautious.

(Buying a fixer-upper home might be OK for someone who is a renovation expert and can do the work themselves, but if you’re not very handy the property might simply turn into a “money-pit”.)

Be Informed: Get a Professional Inspection!

As a buyer, you are legally entitled to have an expert inspect the property, so that you know exactly what you are buying. Do not skip the home inspection. The inspector will provide you with a detailed written assessment on the condition of the property. If you do not approve the report, you do not have to buy, as long as that contingency is specified in your offer. “Buyer Beware” is a good motto to remember because what you see is not always what you get.

Homes built by Licensed Residential Builders are covered by mandatory, third-party home warranty insurance.

As a minimum, this coverage includes 2 years on labour and materials (some limits apply), 5 years on the building envelope and 10 years on structure. It’s the strongest construction defect insurance in Canada. Some homes have home warranty insurance that exceeds this minimum requirement.

The HPO’s Guide to Home Warranty Insurance in British Columbia provides owners and prospective homebuyers with information about home warranty insurance in B.C. The warranty is attached to the home, not to the owner of the home, and remains in effect upon the re-sale of the home until the coverage expires.

Strata-titled homes have two policies of home warranty insurance, one on the home and another on the common property. When the coverage of a new strata-titled home commences, it is possible that the coverage on the related common property has already commenced or expired. Coverage on the common property of strata-titled buildings starts when the first unit in the building is occupied or sold.

Warranty Insurance Claims Upon the discovery of a potential construction defect and before the expiry of the applicable home warranty insurance coverage, owner/holder must provide written notice to the warranty provider and the Licensed Residential Builder/Licensed Building Envelope Renovator.

Not only is it easy to forget about your warranty but it is difficult to know what exactly to look for… before your home warranty expires consider having your home inspected to ensure any defects are detected and claims are submitted.

For more info please visit the Homeowner Protection Office’s website: http://www.hpo.bc.ca/homeowners

I enjoy staying connected with you and I trust you find our newsletter beneficial. It has been a little over 9 months that I have had my newsletter in progress. Thank you for your support… With your input I can make it more interesting and relevant.

Tell me “what you need to know”…

Please take my 4-question… 2-minute survey

Inspect your home prior to a major renovation

I feel it is very important to inspect your home prior to embarking on a major renovation.  It is very helpful to know and understand the possible issues you might have with the major components of your home such as the roof, heating, electrical and plumbing before you spend your entire budget on your new kitchen and bathroom.  The last thing you want is to have a leaky roof rain down on your new kitchen!!  You also want to ensure you have enough electrical capacity to support all of the new appliances in that beautiful kitchen.  Once you know the condition of all of the major components of your home you can plan for the expenditures necessary to complete a successful renovation.

The other issue to be concerned with is Permits.  If you are making any structural changes or any plumbing or electrical work you require a permit.  Your contractor is responsible for having those permits in place so you are protected from poor workmanship.  All of the work done under permit is inspected by Municipal or Provincial authorities.  This gives you peace of mind.

A good contractor will welcome an inspector.

Check out 13 questions to ask your contractor: http://peterhansen.extracontactexperts.com/2011/02/how-to-hire-a-%E2%80%9Cgreat%E2%80%9D-contractor/ .

Inspect your renovation prior to paying final bill from your contractor

It is also important to ensure all of the work has been completed to your satisfaction and the Scope of Work has been met prior to paying the final bill.  Your certified home inspector can assist you with this process to ensure all work has been completed properly.

I recently performed an inspection on a 13 year old house and found some issues on the roof that had been there since the house was built.  When I went on to the roof I found a temporary ladder nailed into the shingles which was placed there by the roofers to make the job safer as it was a steep roof.  There was also a block nailed into the shingles in another area for the same purpose. If this home had been inspected prior to paying the contractor these issues would have been taken care of and would not pose a problem now.  These temporary devices have to be removed now and will leave holes in the roofing material.  This will require some replacement of shingles to ensure the roof will not leak.