Across Canada, the national average sale price for homes increased 12 per cent last December compared to December 2014, according to the Canadian Real Estate Association. When the greater Vancouver and Toronto areas were excluded, the increase was 5.4 per cent, CREA said.
"Some people get into a big frenzy and they bid up, bid up, bid up, and they don't realize they're paying way more than the house is worth."
Enlisting a contractor who can provide a quote on repair or renovation costs can help support the efforts of an agent who can determine whether changes will be a financial boon or bust, Drew noted. "Most people skip the step," added Jonathan. "They think: 'Hey, I want to renovate my house.' They just dive right in and they spend all this money and they don't think about the fact that 'Oh, wait: Am I actually going to be able to get the money back out of the place if I have to sell?' "I've had so many clients that have said to me: 'Oh, well, I know I'm overspending on the renovation. I'm doing a little more than I should, but I'm going to live here forever.' But circumstances change and a year later they have to move. So you always, always have to keep in mind that future resale value." Drew said another cardinal mistake prospective buyers make is embarking on the process unprepared, including looking for properties when they're unaware of what they're qualified to spend. "Have a home inspector ready to go. If you're going to do a renovation have a contractor ready to have a look at the place so you can come in right away with the strongest offer," he said. "That's why people miss out. It's because they're not prepared to pounce when they know it's the right property for them. "We tell clients all the time ... Real estate is a great way to make money. It's a great way to grow an investment over the years. However, if you're not ready to get into a property, or if you're not ready to get into a certain size of property, don't rush. The worst thing you can do is become house poor, and we want to make sure that people aren't."
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