Sorry to burst your bubble… but buying a home is not as easy as looking at a few places, putting in an offer & hoping the sellers say yes. There is A LOT of legwork & you WILL have a lot of questions (or at least you should!).
If there is one takeaway from these tips, it is to find an agent who cares about your investment, not just their profit. Someone you feel comfortable with to not only ask your questions, but to ask them a second, third or fourth time if you still don’t understand. Someone who will answer the questions you didn’t know you needed to ask. And most importantly, someone who will help you enjoy the gruelling job of finding your dream space!
1. Start Saving Early
The more you save, the more affordable your monthly mortgage payments will be! While that new dress or rims for your car might seem enticing, is it worth being house poor after buying property? Set aside tax refunds or work bonuses, set up an automatic savings plan or use a spreadsheet to keep track of spending.
2. Research Your Mortgage Options
Don’t just settle on the mortgage agent you know from high school. Talk to a broker who will explain ALL your options as well as the benefits of each avenue. Ask your real estate agent (that’s me!) for contacts & interview as many as you can to ensure you have a solid knowledge base.
3. Know Your Credit Score
4. Pause New Credit Activity
Getting that free t-shirt at the Blue Jays game this summer may seem tempting, but remember the MasterCard you have to sign up for to get the t-shirt will affect your credit score!
5. Get Pre-Approved
You may think you know how much you can afford, but until a professional looks closely at your finances, frankly put, you just don’t know. There are many factors affecting eligibility & it is important to know what your ceiling limit is before looking.
6. Hire The Right Buyer's Agent
You will be spending a lot of time & working closely with your agent so it is vital you are comfortable with them. Owning property is new territory for you & there will be questions along the way regardless of how much research you do on your own. Being comfortable with your agent to ask all of your questions & finding someone who is patient & thorough is important to ensure you are well informed throughout the buying process. Working with someone you like also makes it a more fun & positive experience!
7. Stick To Your Budget
Look at properties that are under your pre-approval amount – not over!! It is exciting to see what property is available & to go house hunting, especially for the first time. But remember, your pre-approval is a ceiling amount & does not leave you room for fees, repairs or bidding. The market can be competitive! Looking at properties listed at the top end of your budget doesn’t leave room for bidding if there are other offers on your dream space.
8. Choose The Right Property For Your Needs
If you’re a first time home buyer in Toronto & can afford a freehold family home, you’re not in the majority. The reality is Toronto real estate is expensive & entry level property is commonly a condo or townhouse. While you may be able to afford a small old bungalow in a particular neighbourhood, a new townhouse may be better suited for your needs & wallet.
9. Make The Most Of Showings
Whether you are following signs on your Saturday afternoon drive or viewing a list of properties with your agent, make the most of your experience & pay attention to the details. Ask key questions like when the furnace was last replaced. Look out for possible water stains or strange smells. If I’m your agent I won’t let you buy a property we haven’t thoroughly inspected together. Don’t settle for less!
10. Budget For Closing Costs
While you can shop around & compare prices for certain closing costs such as home insurance, you will still need to budget a significant amount for these expenses. Do your research & spend time creating an all encompassing budget.
11. Think Long Term
Moving isn’t as easy as converting a spare bedroom into a nursery. A 1 bedroom downtown condo may suit your family needs for the next year or two, but is it a long term home? Are you planning to grow your family? Do you have parents from out of town that will be staying with you regularly? Maybe a 2 bedroom further from downtown with access to the GO for ease of work travel makes more sense. Think of tomorrow when you’re looking for a property – not just your immediate wants.
12. Save For Move-In Expenses
You got a condo but can’t afford a bed. Don’t end up sleeping on an air mattress for a year because you maxed out your expenses, didn’t budget closing costs & didn’t have a move-in budget! This budget can include a fund for small repairs such as painting or upgraded/personalized fixtures in addition to the necessary furniture items.
13. Negotiate (When Appropriate)
There are a lot of minor items that can be up for negotiation in the home buying process. Before you get ahead of yourself with this one, talk to your agent about the market. If it is a buyers’ market, sellers may be more willing to negotiate with you to get their property sold. If it is a sellers’ market & you are competing with multiple offers, do your research on the condition of the property & budget accordingly to fix or update the items you might otherwise be able to negotiate.
14. Understand The Limits Of A Home Inspection
While home inspections check off many large ticket items, home inspectors are not professionals in every field. They may note the age of your furnace, but they don’t test for air flow & overall functionality or efficiency of the unit.
Lara Stasiw • Real Estate Agent & Home Design Connoisseur
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