Don't Do That! First Time Homebuyer Advice
Posted by Admin Staff on Monday, January 18th, 2021 at 10:18am.
It's such an exciting time, buying your first home. The leap into homeownership is what usually marks a new chapter in life, especially for young adults. While the process is made easier by choosing a Realtor to be on your side, there are still some mistakes that are made by adventurous first time buyers. In order to help you better, we've come up with 4 tips that will help you avoid making mistakes - based off of common regrets of first time home buyers, and admittedly, personal mistakes we made in our home buying youth!
1) Don't Assume You'll Be Here Forever
A study completed 6 years ago by the Canadian Association of Accredited Mortgage Professionals (CAAMP) estimated that the average Canadian will own 4.5 to 5.5 homes in their lifetime (source below). This is on par with what we are seeing today, though there are some exceptions. There is a reason some homes are called "starter homes", and this is why! You will move on from this home at some point down the road. This is only the start. The start may have some shortcomings, but as a smart home buyer, you can move past these shortcomings after a month of two. Later on down the metaphorical road, those shortcomings are something you can avoid or fix in future places you make home.
2) Strip Away Your Emotions
The process of buying a house is overwhelming. After all, it's a big financial investment and commitment! It's easy to fall in love with homes, and certain rooms. It's difficult to deal with potential problems, or see past an issue with one home because of certain other aspects within. The costs that may or may not crop up are stressful to predict and plan for. Going into this process emotionally charged can give you one hell of a roller coaster ride. That's why it's best to leave your emotions at the door, and look at things as objectively as possible. For example, being near a hospital may be a fantastic strategic move for a retired couple, even if that home near the hospital needs one or two project renos. Another example could be that a young couple seeking to begin a family finds a great home at an affordable price, but said house is next to university housing. That couple would need to weigh the pros and cons of being in that location while raising young ones, and how that stacks up to the overall cost of living, family expenses, space expansion, etc.
As a first time home buyer, focus on a list of important criteria before you begin searching, This doesn't mean you're completely bound by this list, rather, it serves as a guiding hand that will lead you to homes with better opportunity.
3) Don't Search Before You Know What You Can Afford
Do not begin house hunting before sitting down with a mortgage specialist! Imagine falling in love with a house, its location and amenities...only to find out it's way out of your price range! Oh, the heartbreak! Now, imagine finding a home that suits your basic needs right now, and you're set on buying it. Then you find out that you can afford a larger home with more conveniences...what do you do? Do you buy and renovate it? Is there enough space and structural strength for that? Will this house be adequate for the future? Or do you begin your search all over again, this time including higher priced homes? How much more time will that take? How much more time do you have? Always sit down with your mortgage specialist first, otherwise this part of the process can be part of the roller coaster ride mentioned above.
4) Remember Closing Costs
"What do lawyers charge?" is a frequently asked question in our first meetings with home buyers. It's good to ask this question early! Knowing what will be charged later on will help you budget for the entire process. Set aside about 1.5 to 4 percent of the purchase price of the home you're looking at for closing costs. Closing costs usually tend to be on the lower side of this percentage, but allowing for this range will be beneficial to you in case anything comes up.
With these four things in mind, you should be one savvy home seeker!