Selective Amnesia: 5 Things to Consider Before You Buy a New Home

(This is a guest article by Donald Farber*)

The picture is so vivid in your mind you might as well be watching it on glorious high definition television. Stretched out on your private deck soaking in a beautiful sunset while sipping wine with your loved one thinking how lucky you were to find this gem. In fact, you’re so wrapped up in your daydream you just nod politely when the realtor tells you that the reason for the low price is the high-rise slated for development across the street. It’s selective amnesia and it’s more common for homeowners than you might expect.

"You simply can’t persuade some people even if you know their decision isn’t in their best interest; it really just boils down to emotions," says 20 year veteran realtor Tony Swanson. "It’s usually not price, or size of style but usually something more personal."

For instance, he says, a recently divorced father of two who wanted a place that would be great for his kids decided to move them into the city where he grew up. "It was because he wanted the best for his kids that he moved back to his old neighborhood."

Unfortunately in the 30 years since he had lived there, things had went downhill in that area. "You can’t blame him because he was seeing everything through a veil of his happy childhood". It was two months later before he realized what a poor decision it had been and something Swanson says was avoidable.

So how do you let cooler heads prevail and balance those emotions with reason? Here are 5 tips that can help you see a potential home in a more complete light.

1. Talk to the neighbors. This is such a fundamental one, but oftentimes people neglect it. Sure it’s friendly, but it can also let you know if you’ll be buying a house amongst a sea of college aged renters. Find out if they have an association or newsletters. These are usually a good indicator that the community you are moving into also cares about it. This makes them more likely to look out for your home or kids, which can be great for your peace of mind.



2. Get a Home Inspection. This is incredibly important as it can save you substantial headaches down the line. Ask for referrals from your friends or from an independent agency. The important thing is to find out if the home inspector offers any guarantees or liability if they miss anything. Be careful about taking the realtor’s recommendation. Chances are that 99% of the time they will refer you to a legitimate inspector but always remember there may be a conflict of interest. Being aware of the financial consequences of having your inspector miss something crucial is reason enough to find your own inspector.



3. Obtain any records about renovations done on the house. A qualified inspection can only tell you so much. Be on the lookout for anything that raises alarm bells when it comes to the quality of materials used in any improvements. Being a detective means scouring any receipts for clues. Finding out the water heater was replaced two years ago despite the house only being 4 years old is a great example. Seemingly innocuous clues such as these could mean a flooded basement, which means you will want to be extra sure no mold is lurking in the drywall. Don’t be afraid to quiz the current homeowner. It’s not an interrogation, but can help you learn about other unique features of the home.



4. Think big picture when it comes to the add-ons. Sure a hot tub seems like a great idea, but what about the upkeep of chemicals and maintenance. The same thing can be said about the pool, or large beautiful yard and garden. Being realistic can save you significant time and money in the future. If gardening is your passion or you can afford the landscaper then by all means - but, often potential buyers seem swayed by the bells and whistles only to realize their annual hot tub dip is costing them $400 dollars on electricity and chemicals.



5. Don’t forget the house is in a community. Exploring the surrounding area can be a deal breaker on a great house. Finding out your house is a couple blocks from a fire station or hospital means the chances of 3AM siren wake up calls all the more likely. Expect similar problems with nearby airports, railroad track or even agriculture areas. Having the constant smell of manure may put a damper on your summer backyard BBQ. On the flip side, a less than perfect home may become more appealing when you realize how close it is to the elementary school, local park, or shopping centre. It might also save you a lot of money. The important thing is to do your research before you buy and make sure you’ve made the right choice.

*About the author: This guest post was contributed by Donald Farber, who writes extensively about first time home buyers and life insurance for LifeCover.ca

*Image Credit: Photograph by mamamusings [via Flickr Creative Commons]