First Time Home Buyer's Guide
So you want to buy a home but you are not sure how the process goes...let me help clarify some of the steps you need to take in order to buy your first home.
Are You Ready to Buy a Home?
First question you have to ask yourself is – do you have the financial resources to buy a home? You should have five percent of the purchase price of a home for the down payment, but ideally even more.
Second – do you expect to stay in your new home for some time? Moving can be expensive and you will want to build some equity before having to relocate. Your job and home life should be stable.
What Can You Afford?
If you haven't already gone through the mortgage pre-qualification process, you will need to meet with a lender(bank) or mortgage broker. They will establish how much of a mortgage you will qualify for. Mortgage rates vary considerably and it is paramount that you shop around for the best rate, terms and options. Don't be afraid to meet with a couple of banks and a mortgage broker or two, to understand what all of your options are.
Once you have an idea of what you can afford, our Mortgage Calculator will help you determine what monthly mortgage payment and the maximum mortgage you can manage.
Note: if you are buying a condo, the amount of your monthly condo fees has a direct impact on how much you can afford to spend on your mortgage.
First time homebuyers may want to take advantage of the federal government’s Home Buyers’ Plan. Under this plan, you may use up to $25,000 of your RRSP towards the purchase of a home. The money is tax-free as long as you pay it back in the next 15 years. Ask your RE/MAX Sales Associate for details.
Find A Real Estate Agent.
Now you want to find a great Real Estate Agent who can guide you through the process. Instead of just randomly driving through neighborhoods looking for signs and calling the number on the sign, choose a real estate agent and build a relationship with them. By selecting an agent and meeting with them to discuss what your goals are, they become your advocate, part of your team, and work on your behalf. They are 'your person' to help you in a strategic search for your ideal home, to know the right questions to ask, the people and resources to call on for assistance, and the knowledge and expertise to make the best offer and negotiate your best deal.
A new home is a big investment, don't try to navigate it as a newbie on your own. Find an agent you can get to know, like and trust, to guide you through the process. It takes the pressure off you to know all of the steps necessary, that is your agent's job.
Are you worried about how you pay a real estate agent? What commission do they get? Well, as a buyer, you typically won't pay any commission. The seller typically is responsible to pay both the buyer's and seller's agent's commissions from the proceeds of the sale. However, there will be additional closing costs that you will need to expect and budget for, but your real estate agent will explain all of that to you.
> To learn more, read article 'The Home Buying Process'
What Kind of House Do You Need and Want?
In your initial meetings with your real estate agent you will need to provide direction and criteria for your home search. Here are some questions to consider...
How many bedrooms do you need? How many bathrooms do you need?
Do you plan to have children? Will you need extra space in the near future? Do you have family members with special needs?
Do you need space for a home office or hobby space?
Location? Proximity to schools, recreation or work.
Do you need a substantial backyard? Do you have pets?
Do you need a garage? Single or double? Is there adequate storage space?
Do you want air conditioning, a fireplace, a deck?
As you start to view properties, here are some additional important questions to consider when assessing a homes suitability...
Will any remodeling be required to make the home move-in ready for you?
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?
How old are the major appliances, and which are included with the house?
How much will utilities run each month? Does the house use gas or electric for the furnace, water heater, and appliances?
How much are the yearly property taxes?
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?
Has the house 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, the home may need rewiring if you are planning on newer appliances or adding a hot tub, how old is the hot water heater, and the furnace, and will they be sufficient.
Does this neighborhood, for any reason, have a poor reputation?
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).
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?
Again, your agent is there to help you navigate these questions and concerns.
The Buying Process
Now that you have determined your financial ability to get a mortgage, and have chosen a trusted agent, you are on your way to being a first time home owner. From here you will follow the same Buying Process as any other buyer. Your agent will facilitate the steps to view properties, make an offer, have inspections and appraisals done, negotiate your best deal, and complete the contract for closing. A good agent will be there for you long after your possession day has come and gone.
> To learn more about the specific steps to buying, read 'The Home Buying Process'
Buying your first home is exciting, I wish you the best!
If I can help in any way, or be 'your person', I would love the opportunity to work with you.
Let's work together, call me >