With the First Home Savings Account (FHSA) newly launched in Canada, the dream of homeownership has once against started to feel within reach for many. When the time comes to actually pull the trigger to purchase your first home though, you’ll want to avoid letting excitement cloud your judgment. Here are 9 of the most common mistakes first-time homebuyers make, no matter where you live.

Mistake #1: Falling in love with home staging.

The first thing you want to do when looking at homes is get past the staging. Home stagers are experts at making houses look like they belong on HGTV, but they don’t always reflect what it will really be like to live in a space.

When viewing a staged home, think about the use case for each space, and how it will fit with your lifestyle. Ask yourself things like:

• Will the bedroom with the staged queen bed actually fit my king-size mattress?
• Where will the TV go in the living room? Where will we sit to watch it? Do we have to crane our necks?
• Is that child’s room really big enough for two kids to share it?

Getting over excellent staging is key to purchasing a house that’s going to fit your lifestyle.

Mistake #2: Shopping when your mind is elsewhere.

They say you should never do groceries while hungry. That’s true. And so is the fact that you should try to avoid shopping for a home when your mind isn’t completely focused on the task at hand. That’s because distractions can cause you to miss key factors that should influence your purchase decision.

If you’ve got kids who are hopped up on sugar and climbing the walls with their teeth, how do you expect to catch that toilet that never stops running? Or the hole in the wall cleverly disguised by a curtain?

Distracted shopping is the last thing you want to be doing when you’re in the market for what will likely be the biggest purchase of your life.

Mistake #3: Not considering the broader neighbourhood.

Take it from the guy who bought a semi-detached next to neighbours who were running an illegal AirBnB, and who bought their kid a drum kit and stuck it right beside our living room wall: your neighbours and surrounding amenities make a massive difference to your quality of life.

If you’re seriously considering buying a certain house, knock on the neighbours doors. Introduce yourself, and ask them to share their perspective on living there. If it’s positive, that’s a good sign. If they grumble at your or treat you poorly, that might be indicative of what they’re like to live next to… and do you really want that?

If the neighbour situation checks out, be sure to research the amenities in the neighbourhood. If you’ve got kids of school age, are there appropriate, well-rated schools nearby? How about grocery stores? Are things walkable, or do you need to get in a car to get anywhere?

All of these are factors you should be considering when thinking about putting in an offer on your first home.

Mistake #4: Not looking at comparable home sales.

A home’s value is an interesting thing. It’s only worth what someone is willing to pay, and if you’re a buyer, you want that number to be as low as possible. One way to make sure you’re not overpaying for a house is to look at comparable home sales in the area. In other words, what did similar homes, in a similar area, sell for? Your Realtor can help you with this data, and you can use it as a benchmark to understand whether a home is price fairly, too high, or too low relative to other homes like it.

Mistake #5: Spending your entire life savings on a down payment.

It’s never good to be house rich and cash poor. If you’ve used up your entire life savings to come up with a down payment, you have no money left to cover off emergency expenses. On top of that, many of the costs of homeownership, such as property taxes and utilities, come as a shock to first-time buyers. If you don’t have cash on hand to help create a buffer until you establish a new budget, you might have a hard time covering those early expenses.

Mistake #6: Forgetting the deposit.

Related to the above, depending on where you live, it may be common practice to offer a deposit once your offer is accepted. This deposit is a portion of your down payment that is paid at or just after the time the offer is accepted. It can range from 5% to 10% of the purchase price of the home, depending on how much the home is worth and where you live.

I know my wife and I were caught off-guard by this requirement. Even though we had the money to afford a down payment, it was tied up in registered accounts, and so we had to borrow money from our parents to cover the deposit, which was due just days after our offer was accepted. I know not everyone has that luxury, which is why this is an important point to keep in mind as a first-time homebuyer!

Mistake #7: Not considering closing costs.

Beyond the deposit and down payment, there are a variety of other closing costs that you need to factor in when buying your first home. Land transfer tax, legal fees, home inspections, title insurance, mortgage setup costs and more can add thousands to the overall price you pay for a home.

As a general rule, closing costs will amount to about 2% of the purchase price of your home. If you’re buying a multimillion-dollar mansion (why are you here again?), that percentage will be lower, maybe 1% or less, and vice versa.

Mistake #8: Skipping the home inspection.

Most of us aren’t experts at spotting things that are wrong with a home. It can be tempting to skip the home inspection to save money or make your offer look more appealing to the buyer, but don’t do it. Without that inspection, you might find yourself on the receiving end of a nasty surprise in the form of major unexpected repairs. A cracked foundation, for example, can cost tens of thousands of dollars to fix. Faulty electrical writing can present a fire hazard. A leak in the roof can cause mold or severe water damage.

A home inspection can help identify these risks before you purchase, so that you avoid locking into a deal that’s going to cost way more than you thought, and possibly more than you can afford.

Mistake #9: Negotiating only on purchase price.

EVERYTHING is up for negotiation when buying a home. More than just the purchase price, here is a non-exhaustive list of other things you can negotiate:

• Closing date
• Furniture and appliances to be left behind or taken away
• Repairs and maintenance to be completed prior to transfer of ownership
• The amount of the deposit, if you live in an area that relies on them
• Your Realtor’s commission (this often only matters when you sell, but can save you thousands when that time comes)

By focusing too much on purchase price, you may miss out on opportunities to capture other valuable elements in the deal. Everything is on the table!

Wrapping it Up

Buying your first home is one of the most exciting moments in your life. Enjoy it and take it in, but also make sure you go in with eyes wide open. By keeping these common mistakes in mind, you’ll avoid nasty surprises along the road to homeownership, and help make sure that you look back with fond memories of your journey.