Being a first-time home buyer without guidance from qualified professionals is like using the internet to diagnose a serious illness -- it鈥檚 not going to end well. That鈥檚 the advice Toronto real estate agent and industry expert Karyn Filiatrault gives to millennials looking to enter the housing market.
She joined CTV鈥檚 Your Morning on Tuesday to warn against some of the biggest mistakes she sees real estate rookies make, even when they are getting help from the pros.
Not getting pre-approved by an experienced mortgage broker
Online calculators can help buyers get a rough idea of how much housing debt they can handle, but Filiatrault recommends using a mortgage broker to find the rate and terms that are best for you.
She adds that younger buyers often make the mistake of getting too cozy with their first financial institution, the bank where they first opened an account as a child, and fail to shop around.
鈥淚鈥檓 not dissing the banks, but don鈥檛 walk into the bank and talk to the first teller you see and get a pre-approval that way,鈥� she said. 鈥淕et a pre-approval from a qualified mortgage broker.鈥�
Going to a home viewing with 鈥榖linders鈥� on
Some sellers pull out all the stops when it comes to making their home look like it was torn from the pages of a magazine. Filiatrault said it鈥檚 important to filter out the 鈥渟taging,鈥� and look carefully at the property you are actually buying.
鈥淓verybody falls in love with the staging, the furry throws, the beautiful little baby room,鈥� she said. 鈥淚t鈥檚 always pristine and perfect, and they walk away and say, 鈥極h, I love this so much.鈥欌��
Using the seller鈥檚 realtor
A seller鈥檚 agent can double their commission by representing the buyer. They may make using them sound convenient, but buyers should know that the commission for the agent representing them comes out of the sale price at closing. It鈥檚 common for seller鈥檚 broker to share the commission with the buyer鈥檚 broker. The buyer is not out of pocket for an additional fee.
鈥淯sing your seller鈥檚 agent to help you buy a property is like using your ex spouse鈥檚 divorce attorney to help you litigate the divorce settlement,鈥� Filiatrault said.
Not listening to your agent
Schooling up on the ins-and-outs of how real estate deals work is perfectly fine, but don鈥檛 rely on your amateur online training when you have a pro in your corner.
鈥淭here is so much information online. Use it and talk to your agent. Trust them. If they say the home needs a home inspection, trust them. If they say this home is outside of your price point . . . they are not saying that just so you can spend more,鈥� Filiatrault said.
Messing up your credit score before a deal closes
Perhaps unsurprisingly, it鈥檚 important to keep your credit situation as pristine as possible when a real estate deal is in the works. That means you shouldn鈥檛 apply for a new credit card, go on a plastic-fueled spending spree, or co-sign a loan for a friend. It sounds obvious, but Filiatrault said these missteps happen more than you鈥檇 think.
鈥淚 have a client. He literally bought a beautiful Mercedes right before closing,鈥� she said. 鈥淚 got the call from the mortgage broker. He was like, 鈥榃hat just happened?鈥� The deal didn鈥檛 fall through, miraculously. But it wasn鈥檛 a good choice.鈥�
