Planning on buying your first home this year? What are the top mistakes other first time home buyers make and how do you avoid them? In this episode, we discuss some common mistakes when buying your first home such as assuming every home on the market is a good buy or being not ready to actually make a purchase.
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Hi everyone. I'm Karl. Welcome to another Homebuyer's School video, a channel where to get the latest strategies, tactics, and tips to help you with your home buying journey. Now remember, if this is your first time on this channel and you want to get the latest strategies from the experts, hit the subscription button below. Hit the [00:00:30] little notification bell so you don't miss anything.
So today I'm joined by local realtor legend Brad McCallum with Remax First and the question we're going to answer is, "
What are the the top first time home buyer mistakes?
So Brad, in your opinion, what are some of the top first time home buyer mistakes?
Trying to time the market
So I would say the biggest mistake that I see buyers making, especially in our current market where we find ourselves a bit more in a buyer's market than a sellers market, is they try to time the market and [00:01:00] timing the market is just not something that a person can do with any consistency.
If you could do that, you should be celebrating on a yacht somewhere because if you can time the market, you're going to do incredibly well.
But the reality is to be successful in home ownership, you don't have to time the market.
So make sure that you evaluate your own situation and that when you buy that property, whichever one it is, you make a good purchase at that time. That's really the best that any of us can do.
If you [00:01:30] actually want to know more about the discussion we had about buying a home in 2020, check out this video here and in the description below.
So that's number one, so timing the market. What's the second?
Assuming every home on the market is a good buy
Yeah, I'd say another mistake that buyers make is they assume that every house is a good buy in a buyer's market.
It's funny, because you think, well, okay, everything must be on sale.
But that's not actually true and the reason why is because the people that put the homes up for sale are sellers [00:02:00] and sellers hate buyer's market.
Sellers want to hold on to that time in the market when their property was maybe worth a little bit more, when there was less competition, when it was more special in the market.
So you really need to be able to determine is that existing house, that one that I'm interested in, a good deal or a bad deal based on market conditions [00:02:30].
Even if you do see a home that you fall in love with, it ticks all the boxes, make an offer. Even if you feel that it's too high, make an offer at where you value it and you might be surprised. That seller, if he's working with a good agent, might get advised to sell his home at the proper market value and you can end up with the property that you wanted.
So it may be a personal situation for me, when we were looking at homes, we found one and it's price was reduced a couple times already and we thought, "Why don't we pick a price and see what [00:03:00] happens?"
And luckily that seller actually agreed to said price rather than taking their initial offer, but when you see a home that's been reduced a couple of times, do you say, "Hey, you know what, that value that that seller is putting on it, maybe we can go quite a bit lower because..."
Yeah, I think so.
There's a real challenge I think from the seller side to come to the market with a realistic asking price.
[00:03:30] Because if you don't, you're going to be faced with reducing that price and the longer that a property is on the market, the more that people assume that there's either something wrong with it.
It's like if I was a single guy now, people would say, "Oh, he's an average looking guy, he seems semi professional. What's wrong with him? Why has he not found anyone at this point?"
That's the challenge I think with the market is just people have, they develop perceptions [00:04:00] of properties.
That being said, a property like that when you see reductions in prices, it could also be a sign that that seller is motivated to sell and it might be an opportunity for you to pick up a very good deal.
Karl Yeh: But actually making sure by doing a quick home inspection too right?
Brad McCallum: Always. Always, always, always.
So we've got two, we've got timing the market. We've got assuming that all homes are priced equally.
Brad McCallum: Yes.
Karl Yeh: So what's the third one?
Assuming every house is overpriced
The third one is assuming [00:04:30] then that every house is overpriced, and I know it sounds very much like point two, but in this one is people will call up or you'll see a place and you'll think, "Oh wow, that place is, they're asking X, so it must be X minus $50,000.
That must be the real worth because you know what, I'm a buyer and there's very few of us at this time and so my money is going to go that much farther."
The reality is is each property goes onto the market, maybe in [00:05:00] a buyer's market, but that individual property, it might be a seller's market for that property.
If it's well priced, well presented, if it compares well against other properties in the market, there's only one of them, only one buyer's going to get to buy that.
So oftentimes we see even in markets like this, that homes will sell in the first week.
In fact, a really funny stat that I heard that maybe don't fact check me on this, but I think I feel pretty confident about this was last year of the homes that did sell, 60% [00:05:30] of them sold in the first few weeks.
Karl Yeh: Wow.
And that really means that it's the sellers that came to the market with an accurate price that were successful last year.
The other ones often sat for five, six, seven months while they tried to hope that a buyer would come and spend more money than what the market was willing to pay.
So I know we're talking about first time home buyer mistakes, but just a little sidetrack here.
If you were sell house and you noticed your house wasn't selling, [00:06:00] how long until you make those drastic changes such as a price drop?
Well, it's definitely different on a case by case basis, but regardless, the way that you're going to make that decision is good communication with your realtor.
Every couple of weeks just have that quick little pow wow and say, "Hey, how's the showings? How's the feedback?" If there's no showings, then you might want to look at acting sooner than later. If there's a lot of showings, then you might want to hold on longer and stick to your price.
Got it, got it. So [00:06:30] Brad, we've gone through three of those mistakes. What's your fourth mistake?
Being not ready to buy
So the fourth mistake is buyers just not being ready to buy.
So you go out shopping, you go check out some open houses, you go to some show homes, you find that perfect place on the perfect block and you want to write an offer because it's such a great deal and then all of a sudden you're not pre-approved yet.
You have all this other leg work to do to get ready for it and by the time you're ready to put [00:07:00] in that offer, the home's gone.
So the biggest mistake is just not being prepared when you go out shopping.
And if you want to know more of actually how to be prepared when buying your first home, check out this video here in the description below.
So I know you have four, but actually what we're going to do is Brad's actually going to make a video on his top five and that's where you're going to get the number one mistake.
The number one mistake and it surprises everyone, [00:07:30] but you need to check out that video. I think you'll like it.
And I'll leave that video up here and in the description below.
So you've got to definitely check that out. So in general, just in terms of mistakes, do you have anything else to add?
Yeah, I would say the biggest thing to do is to really just once again trust the people that you're getting some advice from because they're going to help guide you through this path of all the different decisions and emotions that go along with making your [00:08:00] first time home purchase.
It feels very daunting like there's so much that you don't know that you can never make a good decision, but the reality is is there's all these people in place that can help you.
When you take that and you measure it against your own sort of logic and your own life experience, you're going to make the best decision for yourself.
Question of the day
Perfect. So the question of the day I have for you is:
Did you make a mistake when buying your first home and what was it?
Let us know in the comment section below.
So if you want to know more about first [00:08:30] time home buyer mistakes, check out Brad's video here as well as our previous video here. Don't forget to subscribe and I'll see you in our next video.
About Brad McCallum:
Brad McCallum is a local Realtor with RE/MAX First in Calgary, Alberta. He's made his name for himself by incorporating his passion for videography and marketing, along with his wife and family into his real estate business. This fresh approach to real estate has allowed Brad to stand out in a market of over 5000 realtors. His knowledge of home design and construction as owner of a renovation firm for 15 years helps him advise his clients on the purchase or sale of their home.