If you’re looking to make the leap into homeownership, you’ve come to the right place. Whether you’re wanting to buy a house, townhome, condo, new build or land, you need to have a grasp on how a real estate transaction works. Here is some of the best advice for first-time homebuyers from REALTORS® across Canada.
1. Don’t get discouraged if your offer isn’t accepted
It’s bound to happen. You find what you think is the only home you’ll ever love, put in an offer, and it ends up getting rejected. Don’t let this halt your journey! Instead, use it as motivation to find something even better. While it’s normal to feel disheartened, don’t let it dampen your spirits. Keep a positive mindset and remain dedicated to finding the home that aligns with your needs and preferences.
2. Be willing to look outside your comfort zone
When it comes to finding your ideal home, it’s important to broaden your horizons. Venture beyond familiar neighbourhoods and consider exploring lesser-known areas. By getting outside your comfort zone, you open yourself to a wider range of housing options, potentially discovering hidden gems.
Remember, each neighbourhood has its own unique charm and character. Attend local events, visit parks and amenities, and immerse yourself in the culture of different neighbourhoods. Your REALTOR® will also be able to assess trends in potential neighbourhoods, giving you the full picture of where a community stands before making a decision.
3. Plan for all expenses, not just a down payment
Your down payment is important, but it’s not the only expense to consider when saving for a home.
Don’t overlook additional expenses like closing costs, property taxes, homeowner’s insurance and potential maintenance fees. This will help you avoid any unforeseen financial burdens in the future. And don’t forget about furnishings and finishing touches; you’ll want to make your new place feel like home, and those costs should be included in your budget.
4. Understand you might have to start small
Your first purchase won’t necessarily be your last purchase. Though the idea of a starter home may mean different things to different people, it typically means starting in a smaller space before working up to your forever home.
Everyone has to start somewhere, and there’s nothing wrong with starting in a more affordable condo, townhome or semi-detached property versus a larger single-family home. Just because you can afford a higher price based on your pre-approval doesn’t mean you should.
Don’t underestimate the potential of a cozy starter home that may not tick all the boxes, but can serve as a stepping stone towards your dream house. By beginning with a more affordable option, you can accumulate equity, build your financial stability, and eventually upgrade to a more desirable property in the future.
5. Leverage technology
No, technology can’t replace the experience of walking into a home side-by-side with your
REALTOR® and feeling it out, but it can help you get a better sense of what’s available in your area, or maybe let you explore homes that aren’t in your neighbourhood. Using technology helps you narrow down your options before embarking on physical visits. Embracing technology empowers you to make informed decisions and saves valuable time during the home buying process.
6. Be patient with the home buying process
While some people walk into their first open house and instantly know it’s the home for them, that’s typically not the case. For some, it can take months to find the right home. Sure, it can be frustrating, but that patience will pay off. Finding the right home takes time. Be patient, trust the process, and keep searching for the right match. Remember, a little extra time invested can lead to finding a home that truly meets your expectations and brings you joy.
7. Think about how much you want to spend
You’ll need to give serious thought to how much you want to spend on your home itself, remembering you’ll also need to pay utility bills, insurance, mortgage and property taxes. It’s essential to take into account not only your mortgage approval, but also your long-term financial goals. While it may be tempting to stretch your budget to the maximum, remember that a higher mortgage means higher monthly payments. And do not to get drawn into the “just a little bit more” mentality. Stick to your budget and prioritize what really matters to you.
8. Find a REALTOR® early
The expertise of your REALTOR® is invaluable from the start, and can help steer you in the right direction before you head too far down a wrong path. It’s crucial to seek guidance from experienced professionals. Enlist the help of a REALTOR® who specializes in the areas you’re exploring. These experts possess insider knowledge, market insights, and a deep understanding of local dynamics.
Your REALTOR® will also help with the more complex components of buying a home, from mortgage shopping to legal issues.
9. Shop around for mortgage rates
Whether you’re working with a mortgage broker or going directly to lenders, you’ll want to get a few different options before locking in with one rate. Resist the urge to settle for the first rate that comes along. Invest the time to explore different lenders and compare rates. Partnering with a lender who understands your financial objectives can lead to a rate tailored to your needs, resulting in significant savings throughout the loan term. By putting in a little extra effort to research and analyze rates, you can maximize long-term savings while ensuring your financial well-being.
10. Don’t completely drain your savings.
There’s nothing wrong with putting down a large down payment on your first home, but make sure you’re not using every dollar you’ve saved in order to do it. It’s crucial to maintain a financial safety net because unexpected expenses may arise after purchasing your home. It’s wise to keep some savings aside for emergencies, repairs, or any unforeseen circumstances so you can navigate homeownership with greater peace of mind and financial security.
You should also look into different first-time buyer savings accounts to help maximize your dollar.
11. Consider alternative housing options
Just as you might be stepping out of your comfort zone for neighbourhoods and features, you should also be looking at different types of housing and homeownership. Explore different types of properties such as townhouses, condos, or even older homes. These alternatives may offer compelling advantages like lower maintenance, enhanced amenities, or larger properties. By embracing diversity in housing options, you expand your chances of finding the perfect home that suits your unique lifestyle.
By taking these tips from the pros into account — and reaching out to your own REALTOR® for support — you can move through the home buying process with less stress and more time to enjoy the ride.
— Realtor.ca