Buying Real Estate
First Time Buyers Advice
Pride of home ownership is the number one reason why Canadians desire their own home. Home ownership gives you and your family a sense of stability and security. It’s making an investment in your future. In Canada, especially in the last few years, homes have appreciated considerably and in doing so have added substantially to owners net worth. Also, in Canada your principal residence is exempt from capital gains taxes.
Are You Ready to Buy a Home?
First – do you have the financial resources? Meet with a mortgage lender and see if you can get pre-qualified for a loan. You can also see how much you will be able to afford to pay for a home. Sellers will be much more responsive to serious buyers who are pre-qualified.
Note: if you are buying a condo, the amount of your monthly assessment has a direct impact on how much you can afford to spend on your mortgage.
2. Know What you Want
Make a list of what you need and want in a home – you can use questions provided bellow as guide. This takes some careful thinking and planning. Once you know exactly what you are looking for in a home, your real estate agent will be able to begin searching for your dream home.
3. Get Professional Representation
Hiring a real estate professional will ensure that each step in the home buying process is as stress-free as possible. Your representative will be able to provide you with essential market information and recommendations on ideal properties that fit your criteria.
4. Be Objective
Often enough, first time buyers get emotional when purchasing their first home. It is important to keep an objective state of mind and think with your head, rather than your heart. Does this home really meet your requirements? With so many homes on the market, there is no need to make a hurried decision that you will regret in the future.
5. Home Inspection
Acquiring the services of a professional home inspector can save you thousands of dollars in the long-run. A home inspector will evaluate the home and reveal any repairs or damages that need to be fixed. Being aware of any structural damage to the home before closing will prevent you from being liable for any repairs in the future.
Questions To Ask When Assessing Home Features
- Do you need several bedrooms, more than one bathroom, space for a home office, a two-car garage?
- Do you want air conditioning, storage or hobby space, a fireplace, a swimming pool? Do you have family members with special needs?
- Do you plan to have children? Downtown or suburbs? Proximity to recreation or work.
- Do you need a substantial backyard? Pets?
- Is there adequate storage space?
- Will any remodeling be required to make the home move-in ready for you?
- What service providers (Cable, Internet, Telephone, Satelite) are available in the area; and is the house completely wired for each? Can you hear me now – how good is the cell phone reception?
- How much are the yearly property taxes?
- How much do utilities run each month? Does the house use gas or electric for the furnace, water heater, and appliances?
- How old are the major appliances, and which are included with the house?
- Have there been any major repairs to the house, and if so, when were they completed? For example, how old is the roof? Has water ever damaged the basement or foundation?
- Ever had problems with insects, such as termites and spiders, or rodents?
- Older homes need to be carefully examined – Windows may need caulking or new sashes, bathroom tiles may need grouting, home may need rewiring (planning on a hot tub or sauna?), a new hot water heater, or a new furnace.
Location, Location, Location
- How far will you be commuting and what is the traffic like? Factor in cost of fuel.
- Where will your children attend school and how will they commute?
- Are there recreational facilities and parks close by?
- Are you close to family and friends?
- Is safety or high crime an issue?
- Is the property close to an obstacle or negative influence? (i.e. an apartment building, shopping centre, school, radio tower, power lines, LRT or railroad track, highway, airport or commercial project).
- Access to schools, work, recreation, shopping centers, public transportation, cultural attractions, libraries, churches and hospitals
- Adjacent undeveloped land – what is proposed for this or other green space?
- Heavy traffic can be noise nuisance and hazard for children
- Distance from the unit to amenities, parking, walkways, roads, public transit
- Does the neighborhood reflect positively on the value of the condo and your lifestyle choice?
- Does this neighborhood, for any reason, have a poor reputation?
- Is the future economic climate for the area good? Are businesses moving in? Is there government investment?
- Are people moving in or out of the neighborhood? What is their age, income level, family size?
- Are there plans for this neighborhood that you may be unaware of (i.e. a future highway, a commercial development or a new housing development) that will provide competition on resale?
Noise and Privacy
- Proximity to highways, driveways, parking lots, playgrounds, trains.
- Proximity to elevators, garbage disposal, fire exits, heating and air conditioners.
- How well is the building soundproofed.
- Visit at different times/weekends to check noise levels and activity.
Common Buyer Mistakes
Buying new home is exciting and emotional experience which involves many difficult decisions. Your home is probably the biggest purchase your family will ever make. Often times buyers are simply overwhelmed by the process and tend to overlook some important facts along the way. This could result in making the wrong choice or making your purchase more expensive than it should be.
If you create an organized plan before you shop, you will be able to avoid these common mistakes. Below are a few tips that could help you make the most out of your home purchase:
1. Are you buying the right home?
Do you know exactly what you want in a home? It is important that you have a list of clear, detailed specifications on the home you want to purchase. Buyers often overlook items such as distance to schools, the neighborhood, hospitals, shopping malls, or even the distance to work. Plan ahead with clear objectives and goals, you will be in a great position to buy the perfect home.
2. Bid with care
Is the seller’s asking price high? Is it a steal? How much do you offer? These are common questions that often get overlooked from the excitement of buying a home. With the help of a real estate professional, you will be able to do research on the market and comparable homes which could save you thousands of dollars. Without important information on the market, your offer could be too high, or you could even miss out on a great buying opportunity.
3. Clear title
Before you sign any document, you should be certain that the property is free from any encumbrances. Your agent should be able to provide you with the copy of the title to ensure there are no liens or debts on the property.
Essential background information can save you from enormous consequences in the future
For a few hundred dollars, a professional home inspector can conduct a thorough examination on the home. Doing this will give you an idea on the cost of future repairs.
Spending the money for a home inspection can save you from repairing costly items in the home in the future.
5. Get pre-approval
When shopping for a home, it is a good idea to get pre-approval for your financing. This will put you in a favorable position, as a seller is more likely to consider an offer from a serious buyer.
Failing to get pre-approval can cause you to lose your dream home to another buyer!