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Buying your first home can feel very overwhelming! We have created a mini two part series to highlight some important things you will want to know about the process.
First of all, know that typically, we won’t take you out to view homes if you have not had your preapproval done! If you happen to reach out to us first, likely we will refer you to a mortgage provider to have that step completed prior.
We do this because we want to know exactly what your budget is. We don’t want you to fall in love with a home only to realize you can’t afford it as this is just heartbreaking for you! Also, usually when you find a home you like, things move fast, so we need to make sure your financials are in order beforehand!
It is really important to find a realtor that you trust. You might even want to interview a few different ones to find the one that really gets you best.
It is important to understand that you, as a buyer, working with a realtor typically does not cost you anything because it is the seller that pays the commission. I say typically, because as with everything in real estate, there are always exceptions, so again this is why you really need to trust your agent to guide you though everything so there are no surprises!
So what will happen next is we will sit down with you and get crystal clear on your non-negotiables and desires – location, budget, size, bedrooms, yard and so on.
Then comes the what: what type of home do you need to accommodate how you and your family live? Condominiums, townhomes and freehold homes each offer distinct benefits, so ensure you’re choosing something that will work for you for the next five years.
Freehold you own the building and the land it rests on. You are responsible for the costs and maintenance of the property but you have full use and control of the land and the building (within the rights of the local bylaws).
Condos you own your unit and share ownership of the common areas with other owners. The condo corporation maintains the common property, and they may regulate the types of changes you can make in your unit. Price points may be lower, but you have to remember there will be monthly maintenance fees on top of your mortgage payments so this needs to be factored into your budget.
New builds are another option. You can often customize a lot of the interior to your liking, choose lot placement and so on. However, developments can be delayed, sometimes years, preventing you from being in your home. Also, prices may change depending on market situations.
Homes with income suites (for example a basement apartment with a separate entrance) might be something to consider as a first time homebuyer as a portion of this income can count towards your total income and may increase how much you can qualify for mortgage wise.
These are not the only options, there are also townhomes, leaseholds and co-operatives. The point here is, there are pros and cons to each. This is a very important discussion to have when you are starting the search.
Ok so next the search begins. We start viewing homes and will reassess wants and non-negotiables after each visit.
It’s very important at this stage that your assets are liquid. It can feel like things are moving slowly. But the second you find a home you like, things move very fast. An offer is submitted often the same day as the showing. Negotiations start, and possibly a few hours later the property is yours! That means you have 24 hours to drop off your deposit. That deposit needs to be liquid cash. So when you are starting the home search, if your deposit is tied up in investments, make sure that it is taken out of them and is available as cash right away.
Watch out for part 2 where we will discuss what happens when you find the home you love and want to purchase it!