Note from Gillian: As a first time home buyer, I researched what goes into getting my own place. Of course, it’s more than save money, get mortgage, move in to dream home. I wanted to do it right, and along the way I faced some hard truths about what it will cost to buy (and keep!) my own place and what living within my means will look like (hint: save bigger down payment + lower the price range for shopping).
For this three part series on City and Dale, I have the help of a real estate dynamic duo – Leslee Byer and Kristi Robertson, or as they are aptly named “The Century 21 Dream Team.” They have helped plenty of new home buyers move in to their happy homes and with two-for-the-price-of-one, you get double the real estate experience and wisdom.
Today: How to Get Started
Wednesday, July 30: House vs. Duplex vs. Condo
Wednesday, August 6: Edmonton’s Most Sought-After Neighbourhoods
- Save cash for down payment - at least 5% of total purchase price
- Closing costs ($2000 on average)
- Bonus: Extra cash for furnishing the place and a “rainy day fund” is smart to have on hand
Note: The Home Buyers' Plan gives you the option to save money in your RRSP and “borrow it” from yourself to buy your first home without being penalized for withdrawing it.
This will make you fully aware of your buying potential. They will need do a credit check, and you'll have to provide proof of income and other documents they may require. A conversation or an online application is not a firm approval and isn't enough to start seriously looking.
Note: Mortgage Brokers have relationships with major banks as well as other lenders. They find you the best rate and mortgage product by shopping around on your behalf. Banks are limited to their in house products, but depending on your history with them, they may be the best option. Good idea to have preliminary conversations with both before your credit is pulled.
Assess your position, timeline and discuss your options. They’ll help determine the best fit for your needs including area, types of properties, new vs resale, condos vs single family homes, and the pros and cons of all your options to help you make an informed decision. There are no crystal balls for real estate, so the advice of a realtor can help you foresee potential risks in your investment such as resale, up and coming neighbourhoods, potential development in the area and stigmatized properties.
Get the right realtor: Find someone you can work with and are comfortable with. The process takes time and is a learning process. Clear communication and trust is key. It’s not a bad idea to interview a few to see how they work with you.
Search for your needs, wants and wishes. You may be surprised to find this is constantly changing. Often buyers' criteria changes once they are actively looking and they realize what the market can actually offer them. A realtor will help you stay on top of this ever-changing process, without missing out on any opportunities. They will guide you through all the steps, costs and fees involved in purchasing property so there are no surprises. Every transaction is somewhat unique because every property, seller and buyer are different. Know all of what you are getting into before taking the plunge!
Other professionals you’ll need:
Home Inspector: Use an inspector who has experience, is licensed and registered, and comes highly recommended. Your realtor will have a list of inspectors they recommend. This is not an area where you should try to save money. Having a licensed home inspector is essential, especially if they find a list of deficiencies, and the buyer needs to address them somehow. Having a proper inspection report, done by a professional could potentially save the buyer thousands of dollars and plenty of heartache.
Lawyer: Again, choose one with experience and is recommended. There are many types of lawyers but having a lawyer that works in real estate law is essential.
What have I missed? Feel free to leave a comment if there's something else that should be mentioned.