Buying Real Estate on a Budget Do’s and Don’ts

Ryan Coffey
Comments Off on Buying Real Estate on a Budget Do’s and Don’ts

nanaimo real estate for saleNo one wants to pay more than they need to in any purchase and that goes triple when it’s something as expensive as real estate. In every deal I see, Buyers and Sellers alike are trying hard to make the most of their position and helping them do so is part and parcel of my profession.

Making sure the money is used safely is a necessity. It is often said that necessity is the mother of invention which is another way of saying that when there is a lot on the line people get creative. Some try to use their creativity to outsmart the system with outside the box approaches.

From what I have seen, people using these approaches tend to be taken advantage of by the market instead of taking advantage of the market. It’s not necessarily that they don’t have good ideas but rather that they don’t usually know enough about the real estate world to know when and how to apply their ideas. It generally takes a fair bit of experience to recognize the situations where outside of the box thinking is likely to be beneficial. After all, if you don’t fully know what the inside of the box looks like how can you know when you are thinking outside of it? Beyond that is knowing whether your “new” idea is feasible? (I have written a post in story form about this here that explores certain types of creative approaches from the Seller’s perspective. It is more of a warning against bad ideas though. For the good ones you have to talk to me directly. I don’t give everything away on the internet.)

So here is an overview of in the box thinking written in the form of do’s and don’ts. Some of these should be obvious but buying is such a big experience for people that they often need reminding. Thinking about it (visualising) ahead of time also helps.

When you are buying a property and are on a budget:


  • Look at a more than just a couple of properties. You will need to know what to expect from the piece of the market you are looking at so that you can better recognize a good deal when you see one. This one point at least, is something I rarely see people lose sight of but it is still worth mentioning.
  • Remember what the property is ultimately for. If you are going to live there then don’t allow yourself to focus exclusively on price. It is not a good deal if you’re stuck living there and don’t like it. A home you like at a price you can afford is a good deal in itself. If it is primarily for investment then it is about the numbers and you will need to see the property through the lens of a product/investment. Of course, no matter what you buy is an investment, I’m just saying that balance is important.
  • Have your financing sorted before you go shopping. This means that you have just recently spoken to your mortgage broker and have been told by them what kind of property you can afford at what price. It also means that you have some money in an easy to get to place that can be used for things like deposit and inspection within the next few days because you may see the right place and have to grab it before someone else does.
  • Know the difference between what you need, want and would like to have if possible. That said try to keep an open mind. Every property is somewhat if not totally unique and some places are really blessings in disguise but it doesn’t count for you unless you can recognize it. The earlier point of looking at more than just a couple of properties will give you perspective on this.
  • Ask questions. Some are easily answered by your Realtor right away, some can be looked up in five minutes on a computer, some require a phone call/email to the right people and some require the service of professionals like Property Inspectors and Lawyers.  You want to make sure that your decisions are informed decisions. There’s a lot of info to get through and helping you get it is another big part of what us Realtors and other professionals you will come in contact with do.
  • Be willing to do some small repairs and upgrades to the property. Things like flooring, yardwork and paint for example aren’t a huge deal to change money wise but they do make a pretty big difference in the appeal of the property and thus the selling price. Most buyers are not handy or willing to try it out so they often end up paying 15-20k more for a property that has had things like this done by the Seller, and usually cheaply.
  • Know your DIY limit and buy within it. Once in a while I see someone bite off more than they can chew handyman wise and that’s never pretty. They eventually end up stressed, tired, it takes way way longer than they expected to get the right tools and materials let alone do the work plus the renos usually don’t look so good when they’re done. Having a pro do the right jobs usually pays off in the long run even if it costs more in the short run. (Plumbing and finishing come to my mind first on this.) I don’t see this real often though, if anything I think people tend to spend a lot more than they need to because they aren’t willing to do painting or flooring.
  • Listen to your Realtor. They’ve (I’ve) been through this many many times before. Any Realtor worth their salt will be on your side and knows that not everything you need to hear is the same as what you want to hear. Your friends, relatives, co-workers and other well wishers may have bought places before will be rooting for you and giving tons of “you should” advice that you want to hear. Take it with a grain of salt as market knowledge is ever changing and every single deal is unique as are your tastes, needs and financial situation. They are trying to help though which is nice, but they are not pros with in depth knowledge of the real estate world.
  • Know what creates value in real estate. For this I refer you to my post about “What Creates Value in a Home.”


  • Expect the perfect home. Even if you design the home yourself with an unlimited budget I’m willing to bet that it’s just a matter of time before you start wishing you had made the kitchen counter or a certain window a little bigger, smaller or to the left. You would also probably have some different ideas about tiles and colours or exact location on the street or positioning on the lot once you had time to live in it and think about it. There’s no getting around it, no place is perfect if you look at it deeply enough.  I often compare finding a property to finding a spouse. You look around and choose the best for your needs and tastes from what is available to you. They don’t need to be perfect to be amazing and worthy of your love. I have seen quite a few people spend years searching the MLS online and in person looking for the perfect place never to find it while letting some great opportunities pass by before regretting it later. Unlike a spouse, a home is not usually that hard to change a bit and if it really is all that bad (which it rarely is) it’s a lot less difficult and dramatic to separate from the home than a spouse.
  • Wear yourself out emotionally and mentally in the negotiation stage. Elsewhere on this blog I explore more on negotiating a good price  as a Buyer but my point here is to save some of your mental stamina for removing those subject clauses. It’s routine for me but it will feel like a lot of info and decision making for you. Depending on the deal we may get some sort of curveball that we need to sort out. Doing so is a lot easier for all of us if your head is still clear.
  • Fall  in love with a property before you own it. Of course, when you find one you like and decide to move forward with an offer you will feel excited. That’s not a bad thing. As with so many things in life, balance is key so it’s worth keeping in mind that a lot can happen between the time of  making an offer on a place and removing subject clauses. (Not having the financing work out or something serious in the inspection for example.) The majority of the time if you have your finances in order and you want the place you will end up getting it without major drama, but there are sometimes minor complications that can feel like big ones if you aren’t emotionally prepared for them.
  • Worry. (I know, easier said than done but it’s important.) There are about a million things that could go wrong but most of them rarely do. As a team we work together to prevent as much nonsense as is possible. If you are doing it right, buying a property, for whatever purpose, is a great positive step in your life. Try to enjoy it.
  • Hesitate when you see the right one.  I have seen many people find something amazing that’s perfect for them  at a great price and then take days and days to think about writing an offer only to have it bought out from under them. It’s a big decision so of course you want time to reflect on things but don’t forget that you’re not the only one out there looking for a good deal no matter what market you’re in. The good ones sell fast. The right person just has to notice them.

Ryan Coffey