It can feel impossible to buy your first home. Not only do you have to get enough cash together, but the whole home buying process is a whole new world to you.
There is so much to consider, including what kind of relationship to have with your realtor and how on earth to go about getting a mortgage.
To get some more in depth advice for first-time homebuyers, Daily Hive spoke to Salina Kai, a Rennie Real Estate Advisor.
Here are her top five things to consider when buying your first home:
This may sound obvious, but when you’ve never had to look for a realtor before, it’s worth doing your homework.
Kai said you should look for a realtor who is knowledgeable in the neighbourhoods you want to live in, and specializes in the type of home you want.
“Aligning with a good realtor is essential to the success of finding your new home,” said Kai. “A good realtor will also help guide you through the process as a first-time homebuyer.”
Kai says a good realtor should also be able to help you by:
Kai said it’s important to ensure your realtor responds to your communication in a timely fashion. Some realtors have set hours of operation, so it’s good to ask beforehand.
Ultimately, said Kai, “find a realtor that you actually like – you will be spending a lot of time with them, so make sure you have a good feeling about him or her.”
Kai advises talking to a mortgage broker or bank before you speak to a realtor or start looking for your new home.
“This will help you understand how much money you have to spend or how much you can get pre-approved for,” said Kai.
“By having all of this in place prior to making an offer on a home, it will help speed up
the home buying process.”
It will also help you secure your interest rate for a certain time period even if rates go up, said Kai.
“Make sure not to overextend yourself on your mortgage,” said Kai.
“This will help you ensure that you can cover any unexpected emergency home repairs or in a strata, a levy or assessment.”
For starters, said Kai, attend open houses in the neighbourhoods where you want to live. Take note of list prices and what the homes end up going for.
However, she said, there are many other things to know about the homebuying process:
There are programs that can help save you money as a first-time homebuyer, said Kai.
These include the First Time Home Buyers Program, which reduces or eliminates the amount of property transfer tax you pay when you buy your first home.
If you qualify for the program, you may be eligible for either a full or partial exemption from the tax.
As well, said Kai, first time homebuyers may also be able to use $25,000 ($50,000 per couple) from their RRSPs for their downpayment without incurring any penalties/taxes.
To qualify, the RRSP funds must be on deposit for at least 90 days. You must also provide a signed agreement to buy or build a qualifying home.
The best part is the withdrawal is not taxable as long as you repay it within a 15-year period, said Kai.
Sometimes the best way to find out about properties that have yet to the hit the market is by getting the word out to friends and family, said Kai.
“By letting them know that you are actively looking, they may know of listings that are
coming up,” she said.
“This can give you the upper hand and help alleviate any competition from other buyers.”