Feeling Overwhelmed as a First Time Buyer?
Considering buying your first home can be a field day of emotions- excitement, stress, worry, optimism and sheer joy to name a few. Rest assured, we have all been there! I remember looking for my first house with my Mom and after viewing a really nice place she asked me, "so are you ready to put in an offer?" YIKES!! My immediate reaction was, "no!" I knew I was not quite ready. But that was the moment where my mind really started to make the shift from being a renter to a homeowner. From here I seriously took stock in what I was looking for, where I wanted to live (location), and how much I could comfortably afford. I bought a place in Milton, ON a month later back when it was just starting to vastly grow with new residents.
Where do you start?
1) Financing- it is no fun looking at houses, falling in love, just to find out that it is out of your financial reach (trust me, I've been there too). It is best to start with a meeting with the bank/ mortgage broker who will tell you how much you can qualify for in a mortgage. I started with a plan to put money away into my RRSP's which I eventually used as my down payment. (Find out more about the Canadian Government's Home Buyers Plan). This, of course, is not the only choice for your down payment, but at a minimum, you need to have 5% typically of the purchase price plus money for closing costs. Having a mortgage approval (check with your Mortgage Specialist/ Broker to see how long it is valid for) is a powerful way to be in control of your journey to home ownership. You will be up against other buyers putting in offers that do not take this step and will need to make financing a condition on their offer, if you do not have to, you are ahead of them! 2) Real Estate Agent- let's face it, you do not have to go far to find some local names -newspaper, the internet, your mailbox, and "for sale" signs on nearby lawns. You DO have to put in some effort to find someone you can trust. Trust is rated as the #1 quality most people look for in their Real Estate Agent with good reason, it is likely the single most expensive purchase you will make. If you are not comfortable, you can cancel your agreement and find someone else. I have heard a common complaint among buyers, that they do not feel like their agent has taken enough time to understand what they are looking for. The reality is that you may not entirely know what you are looking for, and that is OK. Your agent should be there to ask questions to help get you to the point of "knowing" and must be flexible and supportive along the way. I always tell my clients that it is not me who has to pay the mortgage so I want them to be comfortable with their purchase. That is my #1 priority. Ask, ask, and ask some more... questions are an incredibly important piece of the puzzle. The more you ask, the more you learn. You will learn about how home buying works in conjunction with what is important to you in your new home. Where you start the journey in home buying it will be different than where you end up (in a good way). The agent's job is to educate and support you. 3) Additional Support- continuing on the topic of support, find someone who is able to be your sounding block to bounce ideas off of and to ask you questions you may not have yet thought of. Consider a friend, parent, family member, or colleague who has gone through what you are going through and can provide some objective, reliable feedback. Inform them on what your goals are and what you need from them. 4) Resale vs. New? This could be a completely different article in itself. New typically means a long closing period especially if they have not "broken ground" on the site where your home will eventually be. It could mean a year, two or three (especially for condos), so be prepared. Unfortunately, on rare occasion, you may pay your deposit along with many others only to find out months later that the project is not going forward (this happened to us, as the builder did not get approved for financing. We did have our deposit returned as it was in a trust account with the builderès lawyer). On the upside, it will give you more time to save up a down payment and prepare for the big move. There is typically a deposit schedule of when your portions of the down payment need to be paid (ex. $5000 with the initial purchase, $3000 in 60 days, balance in 120 days, etc.). Also note, that HST is a factor in addition to most new purchases. Learn more about the GST/HST Housing Rebate. Many new housing builders register the homes they build for the TARION Warranty Program which helps protect you, the homeowner for up to 7 years on various parts of your home. Buying resale allows you to move into your home more quickly (usually in 30-90 Days) and see the house in its finished state. Some people prefer resale as they can have more character, upgrades, and mature landscaping (think trees, flowers, shrubs, fencing, and occasionally a pool or hot tub). 5) Prioritize Your Wish List- Let's face it, where you start out in being a home owner may not include all the "I wants" but it is a start. I don't know of anyone who moved right into their dream home with their first purchase. It is important to create that list, brainstorm everything you think you may want in a home (condo), this is the fun part so enjoy! From this list, narrow it down into what you absolutely need (the bare bones- a good roof, staying within budget, 2 bedrooms vs 3, etc) and then divide the list further into your "Like to Have" and "Would be Willing to Compromise On". Evaluate these lists and move things around as necessary. As you get out there, looking at places to live, your list may change so be open to it. What you thought you may want/need may seem less important as long as you get the area right. Pay attention to transportation (highways, transit, walkability to services/shopping, traffic patterns), the location of grocery, shopping, banking, restaurants, other places you frequent, schools (for the kids or for you), places of worship, and distance to those you care about. For me after having lived in a new community for years with houses quite close together, I yearned for a more country setting where privacy was of high importance. My wish list shifted as may yours over the years. Ready to start your search for a home? I'm here to help, let's connect. I'm always here to help. Contact me now.
About the Author: Tina LaBonte-Gordon is a Licensed Real Estate Sales Representative with Sutton Group About Town Realty Inc., Brokerage serving the local Real Estate markets of Burlington, Hamilton, Oakville, Milton, Waterdown and surrounding areas. Contact: e: email@example.com t: 905.681.7900 w: www.tinalg.com www.facebook.com/TinaLGRealtor https://twitter.com/TinaLG_Realtor