{"id":226,"date":"2015-04-15T21:38:05","date_gmt":"2015-04-15T21:38:05","guid":{"rendered":"http:\/\/www.chrisbrownrealestate.ca\/blog\/?p=226"},"modified":"2015-04-15T21:39:18","modified_gmt":"2015-04-15T21:39:18","slug":"seven-mistakes-millennials-make-when-buying-real-estate","status":"publish","type":"post","link":"https:\/\/www.chrisbrownrealestate.ca\/blog\/seven-mistakes-millennials-make-when-buying-real-estate\/","title":{"rendered":"Seven mistakes Millennials make when buying real estate"},"content":{"rendered":"
\"thespotrender3a\"<\/a>

The Spot by Shato Holdings. Coming soon to Cambie and 12th in Vancouver. 134 transit oriented homes in a concrete air conditioned building.<\/p><\/div>\n

You\u2019ve cut back on lattes, taken a soul-crushing job on Burrard Street or 2nd Street SW, and borrowed from mom and dad. Congrats! You\u2019re ready to put down a chunk of cash to cover the 20% downpayment on a property. But don\u2019t make newbie mistakes, like trusting your bank to look after you. \u201cThe reality is that best rates are not always offered up front,\u201d says mortgage broker Atrina Kouroshnia, 29, of Lavarates.ca in an email.<\/p>\n

And don\u2019t forget to look into subsidies, discounts and programs like the Home Buyers\u2019 Plan for first-time buyers. Here\u2019s what you need to know before you sign on the dotted line.<\/p>\n

1. Putting every last cent into a downpayment<\/strong><\/p>\n

Hold on just a second. Tempting as it is to pour all your savings into a home, it may not be the best idea with today\u2019s crazy prices.<\/p>\n

\u201cFor our parents, it was normal to take out a $200,000 to $300,000 mortgage, whereas now first-time home-buyers regularly borrow $700,000 to $800,000,\u201d says Brandon Wasser, a 29-year-old agent with Royal LePage in Toronto.<\/p>\n

Should you divorce, or your car breaks down, those monthly mortgage payments may be impossible to meet. \u201cI\u2019ve seen people buy a place, lose their jobs, and they have to sell quickly because they can\u2019t afford the monthly payments,\u201d Mr. Wasser says.<\/p>\n

Solution:<\/strong> Set aside some money. Mr. Wasser recommends socking 6 to 12 months of living expenses in an emergency fund.<\/p>\n

2. Rushing to buy a condo, when you really want a house<\/strong><\/p>\n

Millennials may be delaying children, but we still want a few eventually. Or at least a big dog. Unfortunately, both require space to run around and slobber, which means most of us see boxes in the sky as a mere stepping stone to a house. But starting to ascend up that ladder may be riskier than staying put and continuing to save.<\/p>\n

Beware: if you buy a condo and it fails to significantly appreciate, or the monthly payments prove too high to also save, you\u2019ll have to ditch or delay your dreams of a backyard.<\/p>\n

\u201cLook at the street activity, look at the areas it\u2019s in. Is it an upcoming area? Is there a stigma attached to it that could affect the value negatively?\u201d Mr. Wasser says.<\/p>\n

Solution:<\/strong> Mr. Wasser says don\u2019t put a short-term investment ahead of long-term goals. \u201cPeople a lot of times are looking for a deal, but in a hot market,\u201d he says, \u201cthere are no deals.\u201d<\/p>\n

3. DIY property searching<\/strong><\/p>\n

Mr. Wasser says Millennials often search on MLS, find a property they like, and contact the agent pictured. Oops! That\u2019s the listing agent, who works on behalf of the seller. You end up telling him what you can afford and are willing to pay, which is information he\u2019ll pass along to the seller \u2014 hurting you in negotiations.<\/p>\n

Solution:<\/strong> You don\u2019t have to stop searching MLS addictively under your duvet late at night, but hire a realtor first. \u201cThat agent will now be in a relationship with you, where they have legal obligations to you.\u201d Mr. Wasser says. \u201cEverything you say to them is confidential.\u201d<\/p>\n

4. Conflating online calculations with reality<\/strong><\/p>\n

Heartbreak for twentysomethings usually consists of a flaky Tinder date. But Millennials won\u2019t experience true heartbreak until they bid on a perfect place, only to have the offer fall through in financing. Don\u2019t trust online calculators to tell you how much you can afford; they don\u2019t account for things like your credit score, which can affect your mortgage rate.<\/p>\n

Solution:<\/strong> \u201cGo to a bank, go to a lender,\u201d Mr. Wasser says. \u201cFind out what you will be approved for.\u201d And check that credit score.<\/p>\n

5. Thinking what a bank will lend you is what you can afford<\/strong><\/p>\n

Until now you\u2019ve had a cellphone bill, a hydro bill and some student loans. When you buy a property you may wrongly assume you\u2019re only adding a single extra bill \u2014 the mortgage, to that list.\u00a0 \u201cThere are lots of costs that lenders don\u2019t factor in when determining what you can comfortably afford,\u201d Rob McLister, founder of RateSpy.com, writes in an email.<\/p>\n

If you fail to budget for additional expenses \u2014 Home Depot trips, insurance, property taxes \u2014\u00a0 you may soon find yourself back in your bed-bug infested basement apartment.<\/p>\n

Solution:<\/strong> Mr. McLister says don\u2019t focus on how much you\u2019re able to borrow, but how much you should borrow. Add up all your current living expenses, plus the extra expenses associated with home-ownership, then tack on at least 5% to 10% of your monthly income for savings. Circle that number in red, because that\u2019s what you can afford.<\/p>\n

6. Over-trusting your mortgage adviser<\/strong><\/p>\n

As a young, inexperienced home buyer, you\u2019re more likely to depend on what the professionals tell you \u2014 but never assume any mortgage professional knows best, is lending at the highest rates, or is giving you the most accurate information.<\/p>\n

Solution:<\/strong> \u201cAs Ronald Reagan used to say, \u2018Trust but verify\u2019,\u201d writes Mr. McLister. \u201cVerify that their rates are competitive, that they have disclosed all potential downsides of the mortgage they\u2019re recommending, that they gave you a competitive analysis on why their recommendation is optimal and that they are experienced in the industry,\u201d he says.<\/p>\n

7. Not considering rate risk<\/strong><\/p>\n

Interest rates are like Canadian winters. A few good, warmer than average years, barely any snow, you think global warming\u2019s working, and then boom! Polar vortex.\u00a0 \u201cToo many new buyers see a tantalizing rate like 1.99% or 2.49% and forget that rates can jump, fast,\u201d Mr. McLister says.<\/p>\n

Solution:<\/strong> \u201cNever get a mortgage without considering how your payments could change at renewal, or at Bank of Canada meetings if you have a variable mortgage,\u201d he says.<\/p>\n

Read more:\u00a0http:\/\/business.financialpost.com\/personal-finance\/mortgages-real-estate\/seven-mistakes-millennials-make-when-buying-real-estate<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

You\u2019ve cut back on lattes, taken a soul-crushing job on Burrard Street or 2nd Street SW, and borrowed from mom and dad. Congrats! You\u2019re ready to put down a chunk of cash to cover the 20% downpayment on a property. But don\u2019t make newbie mistakes, like trusting your bank to look after you. \u201cThe reality is that best rates are not always offered up front,\u201d says mortgage broker Atrina Kouroshnia, 29, of Lavarates.ca in an email.<\/p>\n","protected":false},"author":2,"featured_media":227,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[47,48,14],"tags":[],"class_list":["post-226","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-first-time-buyer","category-getting-into-the-market","category-new-homes"],"_links":{"self":[{"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/posts\/226"}],"collection":[{"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/comments?post=226"}],"version-history":[{"count":3,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/posts\/226\/revisions"}],"predecessor-version":[{"id":230,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/posts\/226\/revisions\/230"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/media\/227"}],"wp:attachment":[{"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/media?parent=226"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/categories?post=226"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/tags?post=226"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}