Significant renovations, small down payments and no home inspection are
among the top mistakes homebuyers make: RBC Poll
TORONTO, April 29, 2013 /CNW/ - The majority (60 per cent) of Canadian
homeowners admit they made at least one mistake when they bought a
home, according to the 20th Annual RBC Home Ownership Poll. Asked to list up to three scenarios as
their top mistakes, Canadians pointed to significant renovations needed
to the property (15 per cent), not having a bigger down payment (14 per
cent), and lack of a home inspection (13 per cent).
"Unfortunately we don't get a 'do-over' when buying our first home, so
it's important to arm yourself with the right advice to avoid
unexpected financial costs down the road," said Rachel Wihby, strategy manager for First-Time Homebuyers at RBC. "Skipping a home
inspection or rushing a home purchase are cautionary tales for
prospective homebuyers, especially younger and first-time purchasers."
Homeowners also cited purchasing too quickly (11 per cent) and failing
to account for extra costs or total cost of home ownership (10 per
cent) among some of the wrong moves made during a home purchase.
Younger Canadian homeowners (ages 18 to 34) were more likely than the
average Canadian to list not having a bigger down payment as a mistake
(21 per cent vs. 14 per cent national), according to the poll. A larger
percentage of younger Canadian homeowners also did not think about
future family and space needs (13 per cent vs. eight per cent
national).
Affordability and saving for a down payment top concerns for first-time
buyers
The "mistakes" are consistent with some of the common concerns that current
prospective first-time buyers face, who say they haven't purchased yet
because they weren't able to afford it (46 per cent) or they were
saving for a large down payment (32 per cent).
Among these prospective buyers, almost two-thirds (62 per cent)
anticipate their down payment will represent up to 10 per cent of the
home's value. Half (53 per cent) said it would take up to three years
to save enough for a down payment. This time line fits with an earlier RBC news release that showed four-in-10 Canadians (40 per cent) planning to
enter the housing market over the next two years will be first-time
homebuyers.
Many first-time buyers will use their savings accounts and RRSP/TFSA for
a down payment
Aside from taking out a mortgage, prospective buyers expect to fund
their home purchase by putting money aside in a special saving account
(48 per cent), using their RRSPs (25 per cent), using a tax-free
savings account (23 per cent) or delaying other big purchases such as a
car or vacation (17 per cent).
"Buying a home is typically the biggest financial decision that most
people will ever make, so it's important to plan ahead and keep
emotions in check. Seek expert advice every step of the way and leave
some wiggle room in your budget for unexpected costs," added Wihby.
The survey found that prospective first-time buyers were most interested
in a combination/hybrid mortgage (42 per cent vs. 29 per cent national)
and were more likely to be looking for a mortgage that was longer than
a 5-year term (39 per cent vs. 22 per cent national).
About the RBC 20th Annual Home Ownership Poll
RBC is the largest residential mortgage lender in Canada. With over
1,400 mortgage specialists across Canada, RBC has helped thousands of
Canadians find a home. As the country's number one source of financial
advice on home ownership, RBC conducts consumer surveys as one way to
provide insight to Canadians about the marketplace in which they live.
These are some of the findings of the RBC's 20th Annual Home Ownership
poll conducted by Ipsos Reid between January 31 and February 8, 2013.
The annual online survey tracks Canadians attitudes and behaviours
regarding homebuying and home ownership. The results are based on a
sample where quota sampling and weighting are employed to balance
demographics and ensure that the sample's composition reflects that of
the actual Canadian population according to Census data. Quota samples
with weighting from the Ipsos online panel provide results that are
intended to approximate a probability sample. An unweighted probability
sample of 3,005 adult Canadians, with 100 per cent response rate would
have an estimated margin of error of ±3 percentage points, 19 times out
of 20. The margin of error will be larger within regions and for other
sub-groupings of the survey population.
Image with caption: "RBC Royal Bank provides tips to combat common home buying pitfalls. (CNW Group/RBC)". Image available at: http://photos.newswire.ca/images/download/20130429_C9296_PHOTO_EN_26090.jpg
SOURCE: RBC
