First Time Home-buyers
Do you think you want to make the transition from renter to homeowner? It seems like a big leap, with lots of costs and tons of added responsibilities for upkeep that you may not have as a renter. But buying a home is a worthy investment, and there are many pluses to having a place to call your own. Here are some tips that can make your first time buying a home just that much easier.
Figure out how much you have for a down payment.
It may take a bit of effort to get a proper down payment together. Most people will tell you to out 25% down. That can be a lot of money, which could take you several months to a year or more to save. If you don’t have anything set aside for home buying, you might consider waiting and saving up a good down payment before you really kick your house hunting into gear. If you’re looking to buy a fixer upper (which can save you a lot of money if you’re willing to put in some work, or willing to wait until you have the money to put in the work), you can put 10% down.
Organize your documents together prior to making an offer.
Buying a home and applying for a mortgage can involve a whole lot of paperwork. You typically have to present several months’ worth of pay stubs, several months’ worth of bank statements (for all financial institutions you use, whether checking, savings, or investment accounts), and your tax returns.
Figure out exactly what you can afford to spend.
Look at how much you have for a down payment, and make sure to get a guesstimate price for inspections (don’t not get those) and your closing costs. Always save a bit more than they tell you, as there could always be some costs you don’t think of initially. Figure in some initial expenses, like purchasing a lawn mower, fixing the leaky sink, changing the locks, potential Homeowner’s Association or condominium fees, and the deposit costs for all of the utilities. Typically, if your real estate agent has worked in the area, they will know or can find out these numbers. Also, once you figure out utilities and mortgage costs per month, figure out how much else you spend and compare that to what you make. Are you going to be just barely scraping by, or will you have some play money that can be saved or spent each month? The second option is the better option; you don’t want to be house poor.
Make a wish list, but don’t be super strict about it.
You are bound to already know some of the things you want in a home you purchase. You might be so ready to move because you just can’t stand only having a one-bedroom. So make a list: how many bedrooms or bathrooms? What type of home (house, apartment, condo, town-home, etc.)? Do you want a yard or land? Do you want a fixer upper or a ready-to-move-in? Do you want a large kitchen, office space, a pool? Not only should you consider everything you want out of a house, but also consider your future plans. Do you want kids? Are you going to take care of loved ones? Once you make that list, break it into two things: Must Have’s and Really Really Want’s. You are unlikely to ever walk into the perfect house, or if you do it will be way out of your price range.
Set up a good property search
All property searches are not created equal. REALTOR.ca has all of the homes for sale on the MLS market. Many people are under the impression that the large portals are the places that have all of the real estate listings, truth is, the opposite is true. The local real estate brokers can have direct access to the MLS (Multiple Listing Service) which contains all of the real estate listings by all of the real estate brokers. This is NOT the case for the large real estate portals. They rely on REALTORS to upload and update their listings in a manual fashion. That is why when searching for homes for sale on those sites, many of the listings you find have already been sold or are no longer available.
