Finding the right home is challenging enough, but knowing it’s one of the largest purchases you’ll ever make can be nothing short of overwhelming. The good news is, there are steps you can take to find both your dream home AND save money at the same time.
Here are our top tips to avoid paying too much for a home in Edmonton:
Tip 1. Establish Your Wants and Needs
When purchasing a home, buyers must often choose between features they’d like to have vs. features they actually need. For example, should you choose the two-storey home with more than enough space for your growing family, or the quaint bungalow with the backyard perfect for entertaining? Is a chef-inspired kitchen more important than a home office? Is a finished basement a priority over a three-piece ensuite?
Of course, your Edmonton REALTOR® will work hard to find a property that checks everything on your list, but it’s essential to define which features are “wants” and which are “needs” ahead of time. Common examples of “needs” (aka the must-haves) include the number of bedrooms, number of bathrooms and yard space. “Wants” (aka the nice-to-haves) may consist of granite countertops, hardwood flooring or a standalone soaker tub.
Prioritizing your wants and needs serves two important purposes:
1. Saving You Time – Avoid spending countless hours touring homes that don’t satisfy your basic needs.
2. Saving You Money – Avoid falling in love with a home for the wrong reasons (i.e. delivers heavy on the wants but won’t satisfy your needs in the long run).
Pro Tip: Don’t forget to consider your future needs. Are you planning to have children? Live with relatives? Start a home-based business? It’s often less expensive to find the right home NOW than move to a larger one later.
Tip 2. Get Pre-Approved
It’s crucial to get a mortgage pre-approval BEFORE you begin searching for a home. Not only does it show sellers you’re a serious buyer (giving you the advantage over unqualified buyers), but it also lets you know how much home you can afford. Now you can start the home buying process with a clear price range in mind based on the lender's written agreement. You may learn that you can afford a more expensive home than you previously thought or that your expectations are too high, and you need to adjust accordingly. In either case, you should know before you enter the market.
Tip 3. Partner With an Experienced Edmonton REALTOR®
From choosing the right mortgage and finding the perfect property to negotiating with sellers and navigating paperwork, purchasing a home can be exhausting - even for the most experienced buyers. For this reason (and more), it’s essential to partner with an Edmonton REALTOR®. A good agent has years of experience helping both buyers and sellers. They also come backed by a TEAM of helpful professionals, including lawyers, lenders, home inspectors, contractors, movers and more. Not to mention, most home sellers will already have an experienced agent on their side. To get the best deal possible, we recommend having a pro on your team, too.
Tip 4. Consider the Neighbourhood
A home’s resale value is greatly influenced by its location and the homes surrounding it. In addition to the elements that make up a desirable community, including character, quality of schools, accessibility to workplaces and services, recreational facilities, etc., there are other factors that affect a home’s value:
- Large homes surrounded by smaller ones tend to appreciate less than large homes among other large homes. On the other hand, the smallest home in the area tends to be “pulled up” by its neighbours. Even so, selling a smaller home might be more challenging because many people don’t want to pay more for the neighbourhood.
- Resale value often suffers at the outer edge of a neighbourhood. It is better to find a home in the middle of a community of similar homes; it will hold its value better. Exceptions to this rule include houses surrounded by woods, parks, golf courses or other open spaces. These “edge” homes can command a higher price since they have natural boundaries that appeal to buyers.
- Traffic, noise, and odour, can negatively affect property values. Take a careful look around the neighbourhood. You may find the perfect home, but if the community has problems, your investment may suffer when it comes time to sell.
- Take a long walk and ask yourself a few important questions: How well do people maintain their yards and homes? Do the yards have fences? Are children playing in the streets? Is the community well maintained in terms of infrastructure, parks, common areas, etc.? These items may also influence a property’s overall value.
Tip 5. Practice Your Poker Face
Telling sellers how much you love their home is one of the costliest mistakes you can make. Why? Letting the other party know how motivated you are to buy their home may come back to haunt you during negotiations. Even if you’ve made a good offer to start, a seller might feel like they can squeeze more money from you. No matter how much you love the property, keep it to yourself.
Other information to keep between you and your REALTOR®:
- How much mortgage you can afford
- Your move-in timeline
- How much you’ve saved for a down payment
Tip 6. Hire a Home Inspector
Home inspections are worth their weight in gold. A reputable inspector brings experience to the table in addition to good evaluation standards and an unbiased view of a home’s condition. Best of all, a written inspection report can be an excellent negotiation tool – potentially amounting to some big savings regarding overall sale price or the cost of repairs (more on that below).
We strongly advise that you accompany your inspector on the tour. As a result, you’ll gain a lot of knowledge about the home you are thinking of purchasing. Then, having received your inspection report, you can decide whether to proceed.
Common Home Inspection Items:
- Foundation (slab, crawlspace, basement, etc.)
- Electrical, heating and plumbing systems
- Floors, walls and ceilings
- Siding and trim
- Porches, patios and decks
- Property drainage
For more information: 6 Reasons to Get An Inspection Before You Buy A Home
Tip 7. Use Problems to Your Advantage
When it comes to a home evaluation, some problems are more acceptable than others. For example, chipping paint, peeling wallpaper and worn-out carpeting are considered cosmetic and can be easily fixed. In fact, you can use these “problems” during negotiations to lower the asking price (as we mentioned above) or to facilitate repair and replacement. Other problems may serve as warnings to walk away. Common red flags to watch out for when viewing a home include foundation cracks, evidence of water damage and outdated plumbing and electrical systems, to name a few.
Remember: Don’t let a house’s positive qualities blind you to its shortcomings. You might end up spending much more down the road if you do.
Tip 8. Approach “Fixer Uppers” With Caution
Speaking of problems, some people view a home needing a lot of work as an opportunity to make money. A fixer-upper is typically purchased at a bargain price, renovated with sweat equity (and more than a little money), and then resold at a profit. However, if it doesn’t sell for a high enough price, you will not recoup all your efforts and expenses. Before opting for one of these “handyman specials,” do a careful evaluation of what you’ll have to invest. You can then consult your REALTOR® to determine what you can reasonably expect to make when you re-list the house.
Pro Tip: Don’t forget to factor in a little extra. Hidden costs always have a way of cropping up during renovation projects.
For more information: The 17 Worst Home Renovations You Can Spend Your Money On
Tip 9. Avoid a Bidding War (If You Can)
Bidding wars often occur when there are two buyers interested in the same home. The buyers then compete to purchase the home by increasing their offers, occasionally above the original asking price. As bidding wars often occur at a rapid pace, buyers are prone to making financially rash decisions. Keep in mind, though, that regardless of who wins in these situations, the buyer always pays more than they intended.
Tip 10. Be Prepared For Hidden Costs
Buying a house involves more than just a downpayment and a getting a mortgage. Make sure you consider closing costs such as mortgage insurance, appraisal fees, inspection fees, taxes and title insurance, and any other expenses you might incur when purchasing a property. Other costs you should prepare for include:
- Property Taxes
- Home Insurance
- Legal Fees
- Utility Charges/Hook Ups
- Moving Costs
- Furniture and Other New Home Items
Tip 11. Don’t Hesitate
Once you’ve decided to buy a home, be prepared to move fast, as waiting today may cause you to miss out tomorrow. That being said, don’t let the seller’s agent pressure you into a quick close, as this can come with costly consequences if you’re not fully confident. But don’t worry. Your REALTOR® is committed to protecting your best interests and will guide you down the right path.
How to Choose the Right Edmonton REALTOR® When Buying a Home
24/7 Exposure – “Maximum Exposure” REALTORS® don’t just ensure the properties they sell are advertised around the clock. They also have access to the hottest listings – which means you, the buyer, also benefit from being able to explore the latest listings, as soon as they hit the market.
Up to Date Market Knowledge - Expert real estate agents should demonstrate clear and current knowledge of the Edmonton real estate market. Therefore, your REALTOR® should be able to answer any of your questions about Edmonton and its many fantastic communities. This agent-provided information is crucial to making the right choices when buying a home.
An Excellent Track Record - Customer reviews and feedback can provide a lot of information about an agent. Before hiring a REALTOR®, ask them for a list of previous clients you can contact. See what past and current customers are saying about the agent on their website or online reviews. An agent who cannot provide references or has nothing online could be a red flag.
Customer Support Services – The best REALTORS® come backed by a knowledgeable team. This is why we recommend choosing an agency-supported expert. In addition to the specialized services your agent offers, most real estate agencies have their own in-house customer support services - meaning you’ll be taken care of by several experts in addition to the services provided by your agent.
Excellent Communication - Every successful relationship depends on good communication. This is no different for your REALTOR®. In addition to providing honest answers to your questions regarding properties you’re considering (and if they’re worth the investment), they should be available when you need them.
Are you thinking about buying a home in Edmonton? Don’t hesitate to get in touch with us. We also invite you to check out our comprehensive Home Buyer Blog and/or take advantage of any one of our free buyer’s resources:
- Home Buyer Guide – This easy-to-follow guide will walk you through everything you need to know about buying a home in Edmonton.
- 20 Common Mistakes to Avoid When Buying a Home - It’s easy to get caught up in the whirlwind of home buying, which can lead to costly mistakes during the home buying process. By preparing ahead, you can avoid these common pitfalls! Get your free copy of our guide, and we’ll show you how!
- Six Tips That Make Home Buying More Affordable – Here are a few easy tips to make home-buying more affordable!