Buying or selling a home is a significant commitment. Beyond the obvious questions of “do I want to move?” or “can I afford to move?” there are plenty of other important points to consider.
We asked REALTORS® what people should consider before buying or selling. Here’s what they said.
What are the non-monetary costs of moving?
When it comes to buying or selling a home, many people will concentrate on the considerable financial investment. Andrew Stephens, REALTOR® and managing associate broker with Team Stephens with EXIT Realty Metro in Dartmouth, Nova Scotia, points out people should be assessing “the lifestyle shift and overall way of life a [new] home and neighbourhood will provide. People should consider their everyday commutes, the everyday living in their new home, and how it affects their kids, both in terms of schools and if they’re able to get around on their own.”
Buyers and sellers should also consider their current stress load and whether they’re mentally ready to begin the home buying journey. “It can be a stressful process, especially if you have a home to sell before or after you secure your new home,” Stephens says.
How long will you be staying in your new home?
Ben Sweet, a REALTOR® and associate with Ben Sweet, Justin Becker & Associates in Calgary, Alberta, suggests “clients should always be asking themselves how long they intend to own the home for.”
“The reason is the longer they own a home, the less it will cost them,” he explains. “I always suggest people plan to stay in a property longer than they originally thought, because of the costs, monetary and otherwise, associated with moving.”
Stephens says the length of time you intend to stay in a home is a major factor. “It determines what neighbourhoods you should be considering from two angles; can you be happy there long term and what’s the future potential growth for a home in that neighbourhood?” he explains.
What are your future plans?
Though it may feel far off to think about three, five, or 10 years down the line, it’s important to consider whether you plan on starting a family, or growing the family you have.
“You need to know you’ll have enough space within the home itself and in the future,” Stephens says. “The neighbourhood is also important, so consider the school zones, the way of life, and the potential future growth of the neighbourhood, especially if it’s not your forever home.”
Randi Metz, REALTOR® and salesperson with Boyes Group Realty Inc. in Saskatoon, Saskatchewan, says you need to determine what you’re willing to compromise on.
“If you’re purchasing your first home, for example, you may be OK with smaller square footage or fewer bedrooms and bathrooms,” she says. “You plan to purchase a home again in three to seven years, so you sacrifice that burning desire for having your own ensuite, for now. With the next home purchase, you might include the ensuite as a ‘must-have’.”
What are you looking for in a property?
Maybe you’re in the market for a short-term rental, or you’re looking to operate a home-based business. Perhaps you’re hoping to buy a home and flip it. All of these things require proper zoning, which is important to know about before buying.
“You want to be confident you can do what you want,” says Stephens. “If you’re planning to do an internal conversion to a single-unit dwelling to make it a three-unit dwelling and you’re purchasing the property based on this, you may be disappointed to hear it can only have two units due to zoning restrictions.”
Zoning is also important if you’re looking for a specific type of neighbourhood. “If you purchased a property thinking it would only be single family homes, you may be disappointed when a developer starts putting up an apartment building one street over from you or behind your property,” Stephens explains.
Do you feel steady in your current job?
Unless your reason for moving is because of a new job, changing jobs during your homeownership journey isn’t recommended. It not only adds to financial and emotional stress, it can also cause issues with your lender. Job stability, according to Stephens, is crucial.
“The obvious reason is if you’re planning on staying at your job long term and if not, would your compensation potentially increase or decrease if you made a change?” he explains. “If you’re planning to stay with your current employer, what are the chances you will have an increased salary in the coming years? This would be a factor to determine how much you are willing to push the limits on your budget. This also plays a role in the location. If you’re purchasing a property due to the walkability to work and then you change jobs and work on the other side of town, that may negatively impact your experience of living there.”
Will selling lead to penalties on your mortgage?
When it comes to your mortgage, it’s important to be aware of what you’re able to do within your current structure. Fixed-term mortgages can have mortgage prepayment penalties if you try to get out of it.
“It’s ideal to plan your home sale around the time you are due to refinance, although sometimes this is out of our control,” says Metz. “Depending on the interest rate, and the equity in your home, the fee could be minimal, or none at all. Conversely, there are scenarios where this penalty could be rather high. It’s vital you speak with your lender to get the exact details on your mortgage before moving forward.”
Stephens feels this is something that gets overlooked a lot by home buyers and sellers. “Sellers often don’t know this is a possibility and find out at the end of the transaction,” he says. “Many lenders will allow you to port your current mortgage to your new property, which can help decrease penalties and help you stay on a blended rate, meaning it may not jump as high when you move.”
Have you considered the full picture?
Stephens believes “buyers often overlook all of the aspects as one total package when they’re buying a property. There’s too much emphasis on the house itself, rather than the monthly bills, lifestyle, and neighbourhood that comes with it,” he explains. “Buying a home is a major life decision. You want to add to your joys in life, and by considering all of the little details along the way, you’ll make a better decision when purchasing a home.”
Contacting a REALTOR® should always be step one when you’re thinking about embarking on a homeownership journey. They’ll be able to provide much needed context to help you make informed decisions, whether it’s from an emotional, financial, or market perspective. Working with a REALTOR® can prove to be an invaluable experience.
— Realtor.ca