Newspaper article The Canadian Press

A Little Knowledge Is a Powerful Thing in Avoiding New Home Buyers' Regret

Newspaper article The Canadian Press

A Little Knowledge Is a Powerful Thing in Avoiding New Home Buyers' Regret

Article excerpt

First time home buyers have some regrets

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OTTAWA - With Canadians entering the housing market in greater numbers than ever before, it wouldn't be surprising to find that many suffer buyers' regrets.

But a recent survey commissioned by TD Canada Trust suggests the most common regrets for first-time home buyers have little to do with paying near record level prices, or purchasing the wrong house.

Instead, many say it was a mistake not to buy sooner so as to stop pouring money down the rental hole with nothing solid to show for it.

The two biggest regrets -- admitted by 60 per cent of the 1,002 respondents -- have to do with finances; not putting down a bigger down payment, and not thinking hard enough about the associated costs of home ownership.

That's not surprising, says Farhaneh Haque, director of mortgage advice with TD Canada Trust

Even though buying a home is the biggest investment the vast majority of Canadians will ever make, many first time buyers still don't do the necessary homework.

"It's not the sticker price that shocks first-time home buyers. It's the costs associated with the sticker," she explains.

"We see so many home buyers that after the fact feel they could have used information, that they could have had more preparation going into home ownership."

For instance, 29 per cent of those surveyed said they didn't budget for ongoing costs, such as maintenance and utilities. One in eight said they overlooked some of the one-time fees associated with buying, such as inspection and legal fees, title insurance, and land transfer taxes, depending on the home price.

These are not minor omissions.

Paying the mortgage is just the most obvious cost of ownership, and not necessarily the biggest in today's world of super-low interest rates. The combined cost for municipal taxes, fire and theft insurance, utilities, plus regular upkeep, could actually pinch household monthly budgets more.

"If you are renting, you pay that one shelter costs and that's all you have to think about. But as a home owner, there's more," says Haque, who tells clients to budget at least $500-$700 on average in additional monthly expenses.

Her advice to prospective buyers is get advice, which is easily available to them. Most first-timers know of at least one, likely more, existing homeowners who have acquired wisdom through experience.

And financial institutions, real estate agencies and other market players regularly stage seminars with experts that can offer sage counsel. Most are short, informal gatherings lasting a few hours spent with agents, inspectors and financial experts.

Michele Rowe, a sales representative with Keller Willams VIP Realty in Ottawa, tries to arrange one seminar every month, and she typically invites an inspector and a mortgage broker to the sessions to handle their particular specialties. …

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