First time home buyers
Veteran home owners
Other things to consider
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First time home buyers
Am I ready to buy?
There are many things to consider as you are thinking about buying your first home, which leads inevitably to more questions about yourself. Do you have stable employment? Often, when applying for a loan, your employment record is assessed. How is your credit rating?
If you are an entrepreneur or independently employed, you may have to work a little harder at getting your first mortgage.
Have you been pre-approved for a mortgage? Are you emotionally ready for this next step in your life? Is this going to be a five year home or do you plan to stay longer? What area do you want to live in and what purchase price can you live with without becoming cash poor?
More importantly is to have someone who will ask you the questions you haven’t thought of. All of these things will factor into your purchase decision and help you to avoid potential downfalls.
If you haven’t already,
calculate your mortgage. It will give you a better idea of where you stand.
Get Pre-Qualified
Consult with your broker if you have a good working relationship. The most effective way of dealing with financing is often through your mortgage broker. They are working on behalf of the client to get the best mortgage possible with the terms that suit the needs of the client.
Very service oriented, they are usually paid by the lending institution; so there is no extra fee for working with a mortgage broker. They have the benefit of having many options available to offer from each lender; whereas the bank rep can only offer what the bank has. One lender means fewer options.
Veteran home owners
Do I buy before I sell? What things should I do before I see a house?
Make a list. Prioritize the things that are important to you and your family. The first section should be for your needs. These are things that will make or break the search for a house, such as the community, school district, and or public transit. The number of bathrooms and bedrooms, parking and public transit access also factor in the decision.
Then there is a secondary list. This is a list of things that would be over and above the basic needs and nice-to-haves like great local community and access to amenities, great neighbours, access to major highways and a finished basement or fireplace.
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Other things to consider
How long is the process?
It can take anywhere from a few days up to a number of months to find the right house and get through all the steps of the buying process. In most cases, it takes several months of diligent work.
What is your state of readiness? What is your timeline and how aggressively do you plan to search? This will determine your purchasing strategy when it comes to high demand properties and will also dictate how available and active you will need to be in the search process. The more urgent the search, the more flexible you may have to be on price.
What questions should I ask my real estate agent about the house?
Ask about the type and age of the furnace and the wiring. Ask for the land survey, property taxes and all-in monthly utility costs.
House: Furnace, wiring, land survey, property taxes and all-in monthly utility costs? Are the appliances included and if so how old are they? Have there been any pest problem; insects, termites, rodents etc? Has there been any water damage? Has the house been renovated recently, if so has the house been re-assessed for property taxes?
Neighbourhood: What and where are the schools, the community, neighbours, traffic, growth of population, amenities, accessibility. Is there any projected development that would affect the value? These are all things that you will need to research and consider.
Other things to consider: How long has the home been on the market? Will there be multiple offers and how might that impact my budget? If it has been on the market for a long time, then perhaps there are negative facts about the property that you need to know. What is the seller’s time frame for selling and moving? Does your agent know the area intimately?
When do I make an offer?
Once you've found a house you like, you must make a written offer to buy it. The seller will either accept your offer without changing it, make a counteroffer with one or more changes, or reject it outright.
How much do you offer?
What you offer depends on a number of factors such as:
- asking price
- is the property priced properly
- how it compares to similar properties
- how long the property has been listed
This is where a skilled agent like
Robin really comes into play. Real estate is all about strategy - and in today’s market, you sure need it. Make sure that you rely on the experience of a seasoned agent to help you through the offer.
Always ask your agent for advice!
In addition to the money offer, be specific about the improvements or repairs needed as well as the appliances wanted. Be very clear about what you want to seal the deal. The seller may not accept your initial offer, but may make a counteroffer. This may include some of the things you requested or a raise in the price. This process will go back and forth until both parties are happy or the offers are withdrawn.
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Is a home inspection important?
Professional home inspectors know the ins and outs of the operating system and the structure of the home. This is applicable in both new and old homes.
They report on the condition of the foundation, heating and cooling systems, electrical services, roof, plumbing and other significant structural factors and outline what the costs of repair, if needed. This is standard. If you have home with a unique feature such as a pool, or have a well then you may want specialists to review these as well. Having a home inspector ensures that you don’t have any surprises.
What can I afford?
It depends. That is really between you and the bank or mortgage broker. Ultimately, you want to start with what you feel is reasonable and then let the bank tell you what is financially feasible. Lenders will review your financial picture taking into consideration all of your liabilities and obligations as well, including auto loans, student loans, credit card debt, child support, potential property taxes and insurance, and your overall credit rating.
They will require proof of your declared household income, but they also look at your other assets and down payments. With this information, lenders will come up with a ratio that will determine the amount of money they will lend you. It’s a very thorough process that will assess whether you are ready or not.
**Be aware that lenders may be willing to give you more than you are comfortable with. Find out what the total cost on a monthly would be.
Can I buy with no money down?
Yes, you can, and there are a variety of different loans available to suit everyone’s needs. However, you will be required to pay a higher interest rate and may be limited in your choice of lenders.
What is the closing cost? Are there any surprise expenses should I expect?
These are extra costs that arise when the contract is executed and the title of the home is transferred from the seller to the buyer. These costs can range and are above and beyond the purchase price of the home. They include such things as land transfer, home inspections, appraisal fees, etc.
Ask your agent what extra costs are involved when buying a property.
What tips should I know when I move?
There are many things to think about leading up to your move. Here are some basic things you should try and accomplish to make your move smooth.
1) Purge! Get rid of all unwanted stuff before packing. It saves lots of time, energy and money.
2) Notify service providers of your move so that things start up and shut off at the appropriate times. This includes Canada Post for mail forwarding, gas, hydro and cable.
3) Book a mover and retain all of the moving expense slips for your following year tax return.
4) Label and inventory everything in case there is a discrepancy with the movers. Even photograph items that are important to you in the event that they are damaged.
5) For extra special items, make sure they go on the moving van last and are the first to come off – this way you can keep track of them and ensure that they don’t get lost in the shuffle.
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Other Help: in addition to your agent, you may also need the following professionals to complete the purchase of your home: a lawyer, a home inspector, mortgage broker and an insurance broker. All of these people will facilitate the final steps to ensure that your home is yours! Robin has a wide network of professionals that she refers exclusively to her clients.
