Purchasing a home is the biggest financial decision you will ever make. It’s not something to rush into. Here are some tips to help make an informed decision.
1) Talk to a Mortgage Broker
The first step is to find out what you can afford and what you will be qualified to borrow. Talk to a mortgage broker and get a preapproval started and make sure you are on the right track to owning your first home.
2) Find a good Real Estate Agent
Looking online for homes is a good start but often when you find one you like, chances are, everyone else likes it too and it may be gone before you even get a chance to view it. Once you know what you can afford, contact a real estate agent and get that extra set of eyes on the market for you. They often have inside tips on homes coming on the market before the general public does. They will normally ask you to make a list of things that are important to you, like size, condition, location, style and price. This will help them find something close to what you want and help get you in before everyone else.
3) Realize you won’t find the perfect home
This is because the perfect home doesn’t exist. I often tell my first time buyers that getting into the market may mean sacrificing a few things but it’s a stepping stone. You have to remember that your first home is an opportunity to get into the market and start to build that equity. It’s not likely to be your forever home but it still puts you much further ahead than if you were renting!
4) Seriously Consider a Home inspection
A home inspection is a very common condition on a purchase, especially on older homes. It’s important to know potential concerns. A home inspector will go through the house, write up a report and then go through it with you so you are aware of any potential concerns. They can give you advice on the things they think are urgent and the things that can wait. Knowing potential issues can help you make an informed decision.
5) Pay attention to the little things
When you start to feel pressured to make a decision, either because of a time crunch to move out of your current place or because you feel you’ll never find what you’re looking for, you may decide to over-look things that might cause some regret in the future.
– Pay attention to how the house smells – a strong odor, especially a musty one, can be an indication of mold
– Look at small details – if there are cobwebs in the corners, dirty windows, weeds in the lawn and leaves in the gutters, the owners probably didn’t do the best job at keeping it clean. If they didn’t spend the time and money to take care of little things, there is a chance that bigger things, like plumbing or heating/cooling systems may have fallen by the wayside as well.
– Don’t think because the house needs a few minor repairs or new paint, that it’ll be easy to tackle. It takes a lot more time than you expect to complete some of these small tasks
6) Be ready to negotiate
If there is something you feel needs to be addressed, put it in your offer. If it’s important to you, make sure you can come to an agreement with the current owners. If you want to home owners to replace the hot water tank because it’s on its last leg, that can be negotiated into the purchase price to either be taken care of by them or have them knock down the price so you can take care of it yourself. This is where a real estate agent can really be an asset. They are trained to negotiate for you. Why not have someone like that in your corner.
7) Don’t spend all your money on a down payment
Even if its not your first home, you may need to purchase things like a lawn mower, appliances and possibly furniture. If you use your entire savings on the down payment, how will you take care of these things? My husband and I experienced this when purchasing our second home. Due to poor advice from our bank, we thought we had to come up with 20% down because it was our second home. We drained our savings account completely to avoid CMHC fees which caused us to have use credit cards to buy appliances because they didn’t come with the house.
The interest we had to pay on our credit card probably outweighed what we would have paid in CMHC fees. If you’re not sure about how much to put down, talk to your mortgage broker and they can help you figure it out.
Buying your first house can be overwhelming. That is why there are professionals here to help. With advice from a mortgage broker and a real estate agent, you can alleviate a lot of unnecessary stress and make this purchase as smooth and exciting as it should be.
Naomi Hamm, Mortgage Broker
Office: (204) 727-2177
Cell: (204) 724-7290