10 Mistakes a first Time Homebuyer could make

Are you gearing up to buy your first place? If so, arm yourself with these tips to get the most out of your purchase and avoid making 10 of the most costly mistakes that could put a hold on that sold sign.

1. Going House Shopping Without Knowing What You Can Afford
What the bank says you can afford and what you know you can afford or are comfortable with paying are not necessarily the same. If you don't already have a budget, make a list of all your monthly expenses (excluding rent), including vehicle costs, student loan payments, credit card payments, groceries, health insurance, retirement savings and so on. Don't forget major expenses that only occur once a year, like any insurance premiums you pay annually or annual vacations. Subtract this total from your take-home pay and you'll know how much you can spend on your new home each month.

If you end up looking at homes that are outside your price range, you'll end up lusting after something you can't afford, which can put you in the dangerous position of trying to stretch beyond your means financially or cause you to feel unsatisfied with what you actually can afford. You may even learn that you can't afford the type or size of home that you desire and that you need to work on reducing your monthly expenses and/or increasing your income before you even start looking.

2. Going House Shopping Without a Mortgage Qualification
What you think you can afford and what the bank is willing to lend you may not match up, especially if you have poor credit or unstable income, so make sure to get pre-approved for a loan before placing an offer on a home. If you don't, you'll be wasting the seller's time, the seller's agent's time, and your agent's time if you sign a contract and then discover later that the bank won't lend you what you need, or that it's only willing to give you a mortgage that you find unacceptable.

Be aware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, like finance a car purchase. If you cause the deal to fall through, you may have to forfeit the several thousand dollars that you put up when you went under contract.

3. Forgetting to Include Taxes, Fees, Maintenance, Closing Costs and Insurance
Once you're a homeowner, you'll have additional expenses on top of your monthly payment. Unlike when you were a renter, you'll be responsible for paying property taxes, insuring your home against disasters and making any repairs the house needs (which will occasionally include expensive items like a new roof or a new furnace).

If you're interested in purchasing a condo, you'll have to pay maintenance costs monthly regardless of whether anything needs fixing because you'll be part of a homeowner's association, which collects a couple hundred dollars a month from the owners of each unit in the building in the form of condominium fees.

So, if you know you can afford to spend $1,500 a month on your home, subtract from that $1,500 whatever property taxes are on your home divided by 12, your annual home insurance premium divided by 12 and a couple hundred dollars for maintenance. Now you know how much of a monthly mortgage payment you can really afford. Make sure to actually set aside the extra money so you'll have it when those other expenses come up.

4. Being Too Picky
Go ahead and put everything you can think of on your home-buying wish list, but don't be so inflexible that you end up continuing to rent for significantly longer than you really want to. First-time homebuyers often have to compromise on something because their funds are limited. You may have to live on a busy street, accept outdated decor, make some repairs to the home, or forgo that extra bedroom. Of course, you can always choose to continue renting until you can afford everything on your list - you'll just have to decide how important it is for you to become a homeowner now rather than in a couple of years.

5. Rejecting a Great Place Because of Lack of Vision
Even if you can't afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford. If the home otherwise meets your needs in terms of the big things that are difficult to change, such as location and size, don't let physical imperfections turn you away. Besides, doing home upgrades yourself, even when you have to hire a contractor, is often cheaper than paying the increased home value to a seller who has already done the work for you.

6. Being Swept Away by Staging and/or Minor Upgrades
These inexpensive tricks are a seller's dream for playing on your emotions and eliciting a much higher price tag. Sellers may pay $2,000 for minimal upgrades or staging that you'll end up paying $40,000 for. If you're on a budget, look for homes whose full potential has yet to be realized. Also, first-time home buyers should always look for a house they can add value to, as this ensures a bump in equity to help you up the property ladder.

7. Compromising on the Important Things
Don't get a two-bedroom home when you know you're planning to have kids and will want three bedrooms. By the same token, don't buy a condo just because it's cheaper when one of the main reasons you're over apartment life is because you hate sharing walls with neighbors. It's true that you'll probably have to make some compromises to be able to afford your first home, but don't make a compromise that will be a major strain.

8. Getting Your Heart Set on a Home Before It's Been Inspected
It's tempting to think that you're a homeowner the moment you sign the papers, but not so fast - before you close on the sale, you need to know what kind of shape the house is in. You don't want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs. Keeping your feelings in check until you have a full picture of the house's physical condition and the soundness of your potential investment will help you avoid making a serious financial mistake.

9. Not Choosing to Hire an Agent or Using the Seller's Agent
Once you're seriously shopping for a home, don't walk into an open house without having an agent (or at least being prepared to throw out a name of someone you're supposedly working with). Agents are held to the ethical rule that they must act in both the seller and the buyer parties' best interests, but you can see how that might not work in your best interest if you start dealing with a seller's agent before contacting one of your own.

10. Not Thinking About the Future
It's impossible to perfectly predict the future of your chosen neighborhood, but paying attention to the information that is available to you now can help you avoid unpleasant surprises down the road.

Some questions you should ask about your prospective property include:

• What kind of development plans are in the works for your neighborhood in the future?
• Is your street likely to become a major street or a popular rush-hour shortcut?
• Will a highway be built in your backyard in five years?
• What are the zoning laws in your area?
• If there is a lot of undeveloped land? What is likely to get built there?
• Have home values in the neighborhood been declining?

If you're happy with the answers to these questions, then your house's location can keep its rose-colored luster.

Conclusion
Buying a first home can seem stressful and overwhelming, and it isn't without its share of potential pitfalls. If you're aware of those issues ahead of time, you can protect yourself from costly mistakes and shop with confidence.

For many people, a home is the largest purchase they will ever make, but it need not be the most difficult.

*by Amy Fontinelle

Amy Fontinelle is a freelance writer and editor with clients located across the United States and in Canada. She has written over 300 published articles and blog posts for a variety of national and local publications and websites on topics including travel, restaurants, food and drink, fitness, budgeting, credit management, real estate, investing and historic preservation. Her articles have been featured on the homepage of Yahoo! and on Yahoo! Finance, Yahoo! HotJobs, several local news websites and Forbes.com.

You can read more of Amy's personal finance articles at Two Pennies Earned, her own personal finance website, and at PF Advice, one of the web's leading personal finance blogs.

The Room Addition. To Add, or not to Add?....

If you're happy with your home and your neighborhood but are craving a little more space, maybe adding on is a better alternative to moving out. Room additions can be a terrific alternative for many homes, adding space for a growing family and adding resale value at the same time.

But be forewarned. A good room addition involves a whole lot more than just slapping on some additional square footage. Here are some important rules to keep in mind as your planning gets under way:

1. Know why you're adding on: This is the first rule, and it happens before you lift a hammer. Why do you need to add on? And no fair cheating and saying, "I need more space!"

Do you need another bathroom? Bedroom space? A laundry room or mud room? An improved kitchen flow? More space to entertain? Better accessibility due to health issues? More storage? A larger garage or hobby area? The only way the addition will meet your needs is to know what those needs are in the first place.

2. Good additions never look like additions: This is the other top rule of room-addition planning. When you're done, the addition -- no matter what its size or where it's located -- should never look like an addition. The architectural styles of new and existing need to blend.

The exterior materials need to blend as well, or at least complement each other. To the extent possible, use the same type of windows, roofing, doors, siding and other materials. If the original home has wood windows, using new vinyl windows in the addition screams "add-on" and lowers the appeal and the value. Don't overlook the need to blend landscaping and hardscaping as well.

3. Out, up, down, or a combination: The how and the where of a room addition is always a fun and exciting challenge for everyone involved. Some homes are situated on larger lots and lend themselves very nicely to adding out. Others seem best suited to adding up by building on a second or even a partial third floor.

Some houses are even laid out in such a way that it's possible to excavate under them and add new living space in the form of a daylight basement. Or it could be that a combination of two or even all three of these options makes the most sense for your particular home.

Keep your mind open to the possibilities. Work with a good contractor and a good designer and you'll be amazed at what you can come up with.

4. Don't let the interior become an afterthought: I've seen a surprising number of additions that look great from the outside but seem to have no thought put into them on the inside. Flooring doesn't match. Trim doesn't match. Sometimes even the interior floor heights don't match. Remember that how the interior of your addition looks and flows on the inside is just as important as how it looks and flows on the outside.

Use the same materials or the same style of materials. Match up ceiling, floor, and wall levels. Here again, no matter how you view the addition, inside or out, it should never look like an addition.

5. Create convenient access: This is another afterthought in a lot of additions. Let's say you have a three-bedroom, one-bathroom house, and you want to add a second bathroom. Typically, that's an addition that's going to have a good payback.

But then you build the addition so that the only access to the second bathroom is through the kitchen. You now have a three-bedroom, two-bath house, but since the layout is lousy, you've actually gone backwards in terms of desirability and resale value.

Are you going to create a beautiful second-floor master suite that can be accessed only by a tiny spiral staircase from the family room? Is the only way into your great new kitchen via a convoluted hallway that leads through the laundry room?

When planning your addition, never lose sight of how you're going to access the new spaces, and make sure that access is both convenient and inviting.

6. Don't overwhelm your lot: Granted, room additions are expensive. So when you're doing one, and all those workers are on site, there's a temptation to get as much square footage as you can. But don't cram your lot full of house. Remember that open space is important as well, both to you and your family, and, later on, to potential buyers.

This is a good time to go back to Rule No. 1 and reconsider the "why" part of your room addition. Don't add space just to add it -- stay focused on your overall goals.

7. Understand the legalities: There are lots of rules and regulations that come into play regarding room additions. These include property line setbacks, zoning restrictions, and restrictions imposed by homeowner associations and architectural review committees.

In some historic areas, your addition may have to comply with certain historic guidelines. In other areas, there may even be solar shading restrictions that limit the height or the orientation of your roof line. Be sure you check into all of this before you get too far along with your planning.

Chat Soon!!

Sharon xoxo

*Article from Paul Bianch: "Yahoos Real Estate Expert"

Locate all Open Houses in the KW area!!

It's a great weekend for Open Houses!

There are hundreds of REALTOR® open houses in Kitchener-Waterloo and area this weekend.

The house hunt starts here: http://www.kw.openhouses.ca/

Chat Soon!!
Sharon
xoxo

cell-519-574-7144
email- sharon.nunes@rogers.blackberry.net

The City of Waterloo's Official Plan Review

The City of Waterloo has been undertaking a review of the City Official Plan, the primary strategic document for guiding land use and development.

As part of the public consultation process, the City will be holding a series of Open Houses where staff will be available to discuss the proposed policies and mapping, answer any questions, and receive comments.

Copies of the Discussion Papers outlining proposed Official Plan policies and mapping will be available at the Open Houses or may be downloaded from the City's website here.

Open Houses will be held in the City of Waterloo Council Chamber of the Waterloo City Centre, 100 Regina Street South (3rd floor), Waterloo, Ontario. There will be no formal presentation at the Open Houses, so attendees are invited to drop in at any time during the scheduled Open Houses on:

Wednesday June 23, 2010 at
1:00 -4:00 pm and 5:00 - 7:00 pm
and
Tuesday June 29, 2010 at
1:00 - 4:00 pm and 5:00 - 8:00 pm


Chat Soon!!
Sharon
xoxo