Spring is here, and you’re ready to say goodbye to your renting days and hello to being a homeowner. But where do you begin?
Making sure you are educated will make it easier and give you confidence as you navigate through the buying process. Here are a few tips for first time homebuyers that can often be overlooked, but are crucial to know:
1. Start doing your research
Knowing if you can afford a home and how much home you can purchase are two important questions you’ll want to know sooner rather than later. This can mean missing an opportunity on the right home or the right interest rate. It could also mean falling in love with a home you can’t afford. Have a lender look at your financial situation to either give you answers to these questions or tips of things you need to do to put yourself in the right position for the future. Especially in this market, getting pre-approved is an important first step in the home buying process.
2. Rely on your Team
You are new to this, so you’re going to have a lot of questions along the way. Lean on your team to answer these questions. They are experts in their own domains and it is their job to walk you through this and advise. Having a good team to support you through the process will help make sure your important decisions are informed ones. Your team can consist of a mortgage broker, real estate agent and real estate lawyer. From the first encounter, to negotiations, to moving day-having an experienced team to assist your first time home purchase will benefit you greatly. In most cases, sellers have a real estate agent working for them — a listing or seller’s agent — so you’ll want someone on your side, a buyer’s agent, who also has your back in negotiations and can help you understand how to make an offer on a home.
3. Know What You Are Looking For
Purchasing a home – regardless of whether it’s a condo, a home or cottage – is a very emotional decision. That is why having a clear idea of what you are looking for in a home as well as the costs associated with potential properties are essential. Having a good idea of future plans, desired neighbourhoods and costs associated with a potential new home and how that fits into your lifestyle and goals are important in order to make a good informed decision.
4. When and Where
There’s no real bad time to buy a house, but there are a few moments throughout the year that prove to be advantageous to home buyers. Often markets are considered to be slow at certain times of the year, like mid-summer or at the beginning of the year. However, come Fall and in the Spring, there are more options to choose from. You can wait and buy when there’s a little bit more to choose from, but there’s also more competition. There are pros and cons to both approaches and it all depends on your situation.
5. Waiting For the Perfect House.
A lot of buyers wait and look for that perfect “unicorn” house that just doesn’t exist. Try and keep an open-mind when house hunting. Even if you can’t afford to replace that hideous wallpaper in the bathroom right now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford. If the home otherwise meets your needs in terms of the big things that are difficult to change, such as location and size, don’t let physical imperfections turn you away. Distinguishing between what’s fixable and what’s not is a key part of the buyer process. That being said, if you’re going to buy a house that needs work, don’t buy a fixer-upper that’s more than you can handle in terms of time, money, or your own ability. For example, if you think you can do the work yourself then realize you can’t once you get started, any repairs or upgrades you were planning to make will probably cost twice as much once you factor in the labor—and that may not be in your budget.
While you should be realistic in your search, and willing to compromise to some degree, don’t cave on important things.
6. The Financial Aspect
There are costs that come with buying a house, like a deposit, legal fees, title and home insurances, utilities and moving costs, so start saving early. If you’re starting to pinch your pennies to become a first-time homebuyer, there are a few government incentives that might make your financial life easier. The First-Time Home Buyers’ Tax Credit is a small rebate that can help recover some of those costs. Another advantage to FTHBs is the First-Time Home Buyer Incentive which helps people across Canada purchase their first home. The program offers 5 or 10% of the home’s purchase price to put toward a down payment. This addition to your down payment lowers your mortgage carrying costs, making homeownership more affordable (yay!!).
7. Know the Neighbourhood
Don’t just focus on the residence—look at the surrounding area of your desired home. It’s impossible to perfectly predict the future of your chosen neighbourhood, of course, but inquiring about or researching any possible plans or forecasts now can help you avoid unpleasant surprises down the road.
8. Rushing to Buy
I know the market is hot right now, and in a hot market, it may be necessary to make an offer fast if you find a home you like, but don’t neglect important steps. Taking the time to consider the decision gives you a chance to research how much the property is really worth and offer an appropriate price. But, don’t drag your feet! Losing out on a property that you were almost ready to make an offer on can be heartbreaking. If you don’t act quickly, someone else might, and you’ll have to keep looking.
To Sum It Up.
Buying a house is a big decision, but it does not have to be difficult. However, since it’s so natural for emotions to come into play, you need to ensure you are making rational choices, rather than getting wrapped up in the notion of a dream home. When it comes to buying a new home, be realistic, take your time, don’t act on impulse, and, ultimately, make a home-purchase decision that’s good for both your feelings and your finances.
