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99 First Time Home Buyer Mistakes (and How to Avoid Them)

Updated: Dec 8, 2022

There’s a lot that goes into buying a home for the first time – don’t make these rookie buyer mistakes.

1. Thinking you’re buying a new house when you’re actually buying a used house.

The Sellers owe you the home in the same condition it was in when you bought it – they don’t owe you a perfect home with no issues. Trust us…every home will have problems you weren’t expecting when you move in.

2. Not looking under the hood.

While a scratched floor probably won’t change your decision to buy a home, it’s nice to know before you move in. Don’t spend more time shopping for a new pair of shoes than exploring your new potential home.

3. Not being ready to jump on the right house.

In Toronto, the market moves fast, and homes sometimes get multiple offers in mere hours. Make sure to have your financial ducks in a row and be ready to make a quick decision when you find the right home.

4. Not being fully approved for a mortgage before you start the search.

Forget about online mortgage tools and bank pre-approvals – you need a commitment from a lender to ensure your financing doesn’t fall through. They’ll want to check your credit, verify your employment and your downpayment – so be ready. If you don’t know a good mortgage lender, we’d be happy to put you in touch with the people we trust.

5. Trolling homes you can’t afford.

This is a recipe for heartbreak, and it doesn’t help that many condos and houses in Toronto are purposely underpriced to drive the selling price up with multiple offers. Pro tip: don’t choose a $1.4 million house as your ‘ideal’ home that you will judge all others against when you have a budget of $1.1.

6. Not being flexible in your choice of neighbourhood.

There are tons of great neighbourhoods in Toronto and being flexible about where you live will help you land the home of your dreams within your budget.

Related: Check out our neighbourhood guides here.

7. Not getting a home inspection or not reading the one you got.

A home inspection is like a physical for your house, and a DNA test rolled into one – it diagnoses current issues and acts as an early-detection system for what might go wrong in the future. So don’t skip over this important step and make sure to READ IT ALL. Ask questions when you don’t understand something.

Related: Click here to learn more about what to expect in a home inspection.

8. Expecting the Seller to pay for things uncovered in a home inspection.

This doesn’t really happen in Toronto or in any other hot real estate market in Ontario. Get a home inspection to get informed and help you decide if you want to buy the house – but don’t expect to be able to bargain the price down if the inspector uncovers something.

9. Trusting a pre-listing home inspection from a random person.

If you’re buying in a hot market and multiple offers are common, you might be provided with a home inspection that the Seller ordered before putting their home on the market. Be careful – the home inspection industry isn’t closely regulated, and it might not be thorough or true. It’s always best to get your own inspection, but if you decide to use the Seller’s, make sure it was completed by a trusted inspector at a trusted company who values their reputation.

10. Low-balling in a hot market.

Putting in an offer that’s below market value (which may or may not be different than the asking price) is a recipe for a disaster on a newly listed home. All it will do is encourage the Sellers to go hunting for an offer to compete with you, and you’ll probably lose the home. Know the market you’re in and offer accordingly – your REALTOR can help.

11. Not anticipating the closing costs.

You’ll need to pay land transfer tax and your lawyer fees, but there may also be other costs.

Related: You can read more about closing costs here.

12. Not understanding the taxes you’ll need to pay.

From provincial and city land transfer taxes (in Toronto) that you pay on closing to the municipal property taxes that get paid annually, to HST on legal and real estate services and capital gains taxes on investments, there are a LOT of taxes. If you’re a non-resident non-Canadian citizen Buyer, you’ll also be subject to paying the Non-Resident Speculation Tax, which amounts to 15% of the purchase price (paid on closing).

Related: All About Taxes in Real Estate

13. Falling in love with the staging and not the home.

It’s easy to get sidelined into looking at the pretty furniture and pillows. Staging exists for that very purpose – to make you fall in love. But make sure to imagine YOUR furniture and look past the staging.

14. Getting too excited and losing sight of what you wanted/needed.

If a gorgeous yard wasn’t on your initial must-have list, don’t fall for the flowers and forget that what you really needed was a finished basement or office. It’s normal for some of your wants and needs to change throughout the house-hunting process, but don’t lose sight of your original goals.

15. Not researching your school district before buying.

Schools in Toronto operate on a catchment system. You can research and find your school on the TDSB website.

Related: We’ve mapped all the Toronto schools with their Fraser Institute rankings.

16. Buying your first home first, when it might be a better ideal to buy your second home first.

Buying and selling real estate is expensive, so make sure you buy as much home as you’re comfortable with, in the beginning, so you won’t have to move in a few years.

Related: You can read more about buying your second home first here.

17. Being short-sighted in a hot market.

If you’re buying at a time when prices are increasing, recognize that you’ll likely need to pay MORE than the last comparable price…and the extra $1,000 you aren’t willing to pay tonight will become the starting price for the next comparable property. Think of an increasing market like a set of stairs, with each new sale moving everybody up a step.

18. Expecting to see a home with super short notice.

Most showings are scheduled with a day or two notice, and Sellers aren’t usually receptive to only having one hour to prep their home. In a hot market, you can probably get in to see a home quickly (and that might be a big strategic advantage). If the home you want to see is currently tenanted, the owner is legally obligated to give the Tenant 24 hours notice of any showing.

Related: Advice for Buyers: What to Expect When Touring Homes

19. Not being respectful of the Sellers and their home.

It’s not cool to go into a home and make fun of the decor or how the Sellers live. It’s not OK to take photos of the bear on their bed and mock them on social media. It’s not OK to keep your muddy shoes on and traipse through their home. It’s not ok to be late for a showing or just not show up.

Related: Showing Etiquette for Buyers

20. Naively thinking the Seller isn’t videotaping or recording you in their home.

These days, many Sellers have cameras installed and are watching what’s happening during a showing. Don’t discuss your motivations, how much you love/hate the house or how much you’re prepared to pay while in the home.

21. Not being ready to compromise.

Almost nobody gets everything they want in a house (except maybe Drake). You’ll likely need to compromise on at least one of these three things: location, size or condition.

Related: Get Ready to Compromise

22. Failing to understand what the bank appraisal is and how it might affect you.

Almost every home that will need a mortgage will be appraised by the lender…so make sure you understand what happens if the bank appraises your home for less than you agreed to pay for it.

Related: You can read more about Bank Appraisals here.

23. Not filing your income taxes.

Banks will require your income taxes to be filed and up to date before they’ll advance you a mortgage, so if you’ve been avoiding filing, get on it right now.

24. For condo buyers: not reading the status certificate and having it reviewed.

The status certificate is a crucial document that needs to be reviewed by your lawyer. It contains the financial and legal health of your condo board.

Related: Read more about Status Certificates and the status certificate condition.

25. Going in with a firm offer without having done your due diligence in advance.

Bidding wars are competitive, but that doesn’t mean you shouldn’t protect yourself. Get your financing in order and get your home inspection done BEFORE you submit your offer.

Related: How to Win a Bidding War

26. Giving more than a $100,000 as a deposit.

Deposits in Ontario are only insured up to $100,000, so if for some reason you need to provide more than that, you can split up the funds between the brokerages (half to the listing brokerage, half to the brokerage representing you as the Buyer) or have your deposit held in trust by your lawyer.

27. Scheduling too many showings in one day.

Looking at homes is fun – but if you see more than 6-8 in a day, you’ll be exhausted and probably forget what you saw.

28. Buying the most expensive home on the street and not understanding the ramifications of that.

The cheapest home on the street is more valuable because of its neighbours, and unfortunately, the most expensive home’s value is brought down by its neighbours too.

Related: Understanding a House’s Value

Related: Understanding a Condo’s Value

29. For condo Buyers: not understanding the rules.

Just because you own it, doesn’t mean you can do whatever you want.

Related: Click here to read 14 Misconceptions About Condos.

30. Driving your own car while house hunting with your REALTOR.

There’s so much you can learn about the buying process from your agent while you’re navigating traffic and parking.

31. Not reading what you’re signing and understanding the legal paperwork.

When you buy a house, there’s a TON of paperwork to sign.

Related: Read what all that Real Estate Paperwork means.

32. Thinking you don’t need an agent to represent you.

Sure, you can find homes online yourself and visit open houses, but there’s a lot more to a REALTOR’s job than that.

Related: Read Why Having an Agent Represent Your Interests is Important.

33. Not going into the scary unfinished basement.

Your REALTOR will help with scary basements, but it’s important that you explore the whole house, not just the sexy kitchen. Look for evidence of pests, water problems and take a peek at the electrical panel.

34. Not asking about the neighbours.

Always ask about the neighbours.

Related: 88 Questions to Ask When Choosing Your Next Neighbourhood.

35. Not wanting to commit to one agent by signing a Buyer’s Representation Agreement.

Having an agent commit to working for you has many advantages, not the least of which is having somebody represent your interests at no cost to you (the Seller pays the Buyer’s agent).

Related: Read about the Buyer’s Agent’s role here.

36. Not budgeting for all the repairs you’ll inevitably have to make as a homeowner.

You’ll be surprised by all the little and big stuff that you’ll be responsible for as a Buyer. Budget, budget and then budget some more.

Related: How Much Does it Cost to Own a Home?

37. Not informing yourself about the unsexy stuff.

Ask about the age of the roof, the kind of electrical wiring, how old the drains are, whether or not there’s Kitec plumbing, etc. Work with an agent who asks all the questions and reports back to you.

Related: 10 Questions to Ask Before Making an Offer

38. Not talking to a home insurance broker in advance of buying.

Your mortgage will be conditional on getting home insurance, so make sure there aren’t any issues with the home (or with your insurance history) that it make it uninsurable.

Related: All about Home Insurance For First Time Buyers

39. Not having serious conversations with your spouse before embarking on the house-hunting adventure.

Does either of you have a dark secret in your credit history? Are you planning on having kids? How far are you comfortable commuting to work?

Related: Click here for more tips on buying a home with your spouse.

40. Thinking the daily listings email that your agent sends you is the only option to get listings.

All Toronto agents have access to Collab, a system that mirrors the REALTORS’ MLS. Collab allows you to set up multiple searches, communicate within the system with your agent about the homes you love and get instant notifications of new listings. Your agent doesn’t use Collab? Get a new agent.

Related: Buying with the BREL team

41. Expecting showings to be scheduled in the early morning or late at night.

For starters, Sellers aren’t likely to let you in at off-hours, and if they do, they’ll probably only let you in for 15 minutes…not nearly enough to explore what could be your next home.

42. Not exploring the neighbourhood during the day AND at night.

It’s important to get a sense of your new ‘hood at all times of day…not just when the sun is shining, and the kids are playing outside.

Related: 88 Things to Consider About the Neighbourhood

43. Buying with the listing agent.

I know, you think the listing agent knows the most about the property (and they usually do). But they’re working for the Seller! Their job is to get the best price and conditions for the Seller, not for you.

Related: Click here to read more about Buying with the Listing Agent.

44. Not recognizing the limitations of buying a tenanted property.

If you’re buying a property that has tenants, make sure the tenants are not in a lease. Landlords can’t evict their tenants during a lease, and if they are ‘month-to-month’ tenants, the Landlord must give 60 days notice (from the 1st of the month) – so plan your closing date accordingly.

Related: You can read more about Buying a Tenanted Property here.

45. Believing the asking price is the real price.

Depending on what’s happening in the market when you buy, the asking price might have been set arbitrarily low to generate a bidding war, or it might be high with an intention to negotiate. Either way, your REALTOR can help you understand the real value of the home.

46. Using and thinking you see ALL the homes for sale.

Truth: there’s a delay in listings getting published to, and many homes are sold before they ever get posted there. Have a REALTOR set you up to receive listings. Don’t know a REALTOR that you trust? Get in touch, and we’ll set you up.

Related: The Truth About REALTOR.CA

47. Not walking around the outside of the house.

Look for cracks in the bricks and evidence of water penetration. Go into the garage. Check out the fence. Take the time to walk through the whole yard; don’t just peek out from the window.

48. Buying a home during the first three months of a new job.