Thinking about purchasing your first house? This is one of the biggest decisions you’ll make in your life, but that doesn’t mean you have to walk in blind.
We reached out to some of Canada’s top real estate agents and curated their best advice for first-time homebuyers. Keep reading to learn how to find your new home.
1. Figure out what you can actually afford
In the world of house hunting, figuring out your finances comes down to getting preapproval for a mortgage. Toronto realtor Zuzana Misik says getting preapproved is vital. “First time buyers (and actually all buyers) need to get preapproved so they know exactly how much they can afford,” Misik says.
Checking your budget before you check out any houses also makes the process more enjoyable. Stephanie King, a Toronto real estate agent who personally closed 24 sales last year, recommends meeting with a mortgage agent to determine exactly how much you can spend. “This way, we’ll know the price range we should be looking in and you won’t be looking over budget, which can be discouraging,” King says.
Montreal real estate agent Amy Assaad also points out a practical benefit to getting preapproved early. “There are often multiple offers on a good property. You’re more likely to be considered than a person who doesn’t have their financing in order. It will make your offer a lot stronger,” Assaad explains.
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2. Budget for more than just your mortgage payments
Preapproval is important, but purchasing a house involves a variety of costs that many first-time buyers don’t consider.
Ottawa realtor Mario Lemieux recommends that all first-time buyers make a budget so they really understand their financial commitment. Check out Lemieux’s website for a comprehensive list of what to include in your budget. You’ll see that Lemieux recommends including purchase-related expenses like inspection, insurance and legal fees as well as additional costs that you may rack up as a new homeowner, such as the price of new appliances or condominiums fees.
3. Research your real estate agent
Before you find a house, find the right real estate agent for the job. If your real estate agent is familiar with your dream neighbourhood, then they’ll be able to save you time and money by recognizing a good opportunity when it comes.
“Select a good experienced realtor that will work hard to assist you in finding the best property possible within your budget, location, and criteria list,” Lemieux says.
A good real estate agent should also be respectful of your needs and wants. You will be spending a lot of time with your agent, so chose one that you can speak with candidly. “Make sure that you and your agent are on the same page,” Zuzana Misik adds.
4. Make a three year plan
You might think your first home will be your forever home, but Amy Assaad says her clients want to upgrade sooner rather than later. “You’ll get a boyfriend, you’ll get married: Life changes so fast!” she explains.
Assaad recommends making a three year plan and looking for a house that addresses your needs within this time period. In fact, searching with a three year plan (instead of a longer plan) in mind will open up more opportunities (i.e. properties) because your wishlist will be shorter.
Make sure you also consider how a three year plan will affect the mortgage you select: You’ll want a mortgage that is portable so you and your mortgage can move to a new property when you’re ready.
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5. Create a very short wishlist
Toronto realtor Nikki Singh says you should “make a REALISTIC list of what you’re looking for and be open to adjust that list on your journey for the perfect home.”
Amy Assaad agrees, and suggests answering these four simple questions before you start your search:
- How many square feet do I need?
- How many bedrooms do I need?
- Do I need parking or will something close to public transit be okay?
- What neighbourhood do I want to live in?
Sure, a walk-in closet, jacuzzi and marble countertops would be nice to have, but you may miss out on some stellar properties if your wishlist is too detailed.
6. Look for a property with high resale value
Your house doesn’t have to be perfect. In fact, you may get a better deal if it isn’t, and this gives you more room to profit on the property when you’re ready to upgrade to something bigger.
Assaad recommends thinking about supply and demand in the market and buying something that is likely to be more valuable soon. For example, if you live in a city, a dated detached house may be easier to resell than a modern apartment in a 300 unit building, simply due to the scarcity of single family dwellings.
Assaad also points out that you can renovate your property, so that your house is more likely to sell for more than you bought it. Upgrading a bathroom or kitchen can add a lot to the listing price, and landscaping a yard, adding hardwood floors or installing better lighting can also do a lot towards winning over buyers in the future.
7. When the time is right, it will happen!
It’s easy to get swept up in the excitement of buying a home, but remember that good things take time.
“First time home buyers want to jump in with two feet!” says Stephanie King. “This is great and I would never want to hold anyone back, but ensure your realtor is doing their proper due diligence by checking comparables in the neighbourhood and adding conditions, such as a status certificate or home inspection, to your offer. If you love a property, that is great, but ultimately it should also be a smart investment.”
Nikki Singh agrees. “Don’t rush to purchase property. Once you are fully satisfied with the property, price, and neighbourhood, make an offer,” Singh says.
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