10 Things First-Time Home Buyers Should Know
Tags: Homes In Toronto, Pre-Approval, Home Inspection, Mortgage Broker
When you’re buying your first home, you don’t know what you don’t know – and believe me, there’s A LOT to know. As you’re deciding what kind of home you want, where you want to live and how much you’ll spend, here are 10 things to help you on your home buying journey.
1. Do your homework. Before you start looking at properties or making offers, do some research. Talk to friends who have bought recently. Get your head around how the buying process works. Talk to a mortgage broker to see how much you can afford. And figure out what a home with your must-haves will cost by seeing what comparable places are selling for – an agent can help you do that initial research, but you can find a lot of info online, too.
2. Get pre-approved, stat. If you’re looking at places without knowing how much money the bank will lend you, you’re doing things backwards. Go to a mortgage broker first to see how much you have to work with. And once you’re pre-approved, you can make an offer on a property right away, with no delays.
3. Understand the true cost of buying. Spoiler alert: whatever your offer, you’ll pay more thanks to the joy of closing costs. Things like land transfer taxes and lawyer fees can really add up. And while first-time buyers get certain rebates on taxes, you will still need to factor in additional costs. (And don’t forget all the costs involved in moving, from cable hookups to movers to new furniture.)
4. Have easy access to your deposit money. When your offer has been accepted, your deposit (usually 5% of the purchase price) is due in 24 hours. Having it liquid and ready to go is vital – don’t wait until you’re under the gum to withdraw the money from your RRSP. A delay here could mean losing out on a property you love.
5. Embrace the art of compromise. We get it, you have a lot of must-haves. But as a first-time buyer, you probably won’t get everything you want within your budget. And that’s okay. This first purchase doesn’t have to be your “forever home,” so you can compromise on the neighbourhood, on the square footage, on floor height or the slightly dated kitchen. Once you build some equity, you’ll have another chance at those must-haves.
6. Don’t sweat the small stuff. A lot of buyers go in expecting perfection, with beautiful staging and design and recent renovations. Remember, though, that a “perfect” property usually comes at a premium. If you’re willing to rip out old carpets or reno the kitchen, you may be able to score a place that’s a much better deal.
7. Get on the same page as your partner. This is a big one – I can’t tell you how many buyers I’ve worked with who can’t agree on what they want in a property, and the whole process turns into a fight. Before you start looking, decide what you want…together. And be willing to compromise. Compare your list of deal breakers and go from there.
8. Get to a mortgage broker. When it comes time to get a mortgage, many new buyers just go to their own bank. That can be a costly mistake. Why would you limit yourself to the lending products a single bank offers when you can choose from all the banks? Working with a broker means more selection – and a professional who’s working with your best interest in mind. Your real estate agent will be able to recommend a good one.
9. Don’t pass on the home inspection. We just went through a pretty zany period where people were making offers without inspections because conditions would have taken them out of the running. But now that we're in a slightly more balanced market, don’t skip it, even if the seller provides their own report. Having someone you trust look a place over can offer a lot of peace of mind – and help you avoid expensive repairs down the road.
10. Put together a strong real estate team. You need an agent who really knows their stuff – one who specializes in the area and the property type you’re looking for, is a strong negotiator, and can help guide you through a complicated process with minimal stress. Your agent can help you find a great lawyer, recommend a trusted mortgage broker, and more. With this kind of powerhouse team in your corner, you’ll be set for success!
Looking for a great partner to help you buy your first place (or your fifth)? Get in touch today!