The first quarter of 2014 is behind us in Real Estate and we've been pretty busy, considering the horrible weather. With great mortgage rates and a decent amount of inventory in our market right now, first time home buyers are out and about looking to break into home ownership and stop paying rent.
We love working with first time buyers and take extra steps to ensure they're well informed. It's the biggest move they'll make. All of the care and efforts we take are in an attempt to have our them avoid the many mistakes made when they buyers make the move into home ownership for the first time.
#1 Not Thinking About Re-Sale: This is a big one because inevitably, your first home will not be your forever home as families, budgets and needs change over time. With that in mind it's always important to think of "down the road" and will this home be a good investment. Things to think about when looking at the future re-sale potential of the home are the location/neighbourhood, number of bedrooms and the potential return on investment of updates and upgrades that could be done. Your Realtor will be able to assist you through evaluating comps, market trends and if/which improvements will bring you the most in future value.
#2 Failing To Be Pre-Approved: Granted lenders typically don't provide pre-approval anymore, however they will provide an indication to you on what you will likely be approved for given your current financial status and what you can feasibly afford. It's vital that you speak to a Mortgage Broker before you look for your new home. You don't want to get into a new home, fall in love and then find out it's way above what you can afford or what lenders will be willing to give you. It's also a good idea to provide your mortgage broker's contact information to your Real Estate Agent so they can work as a team to get you the house you want and the house you can afford. If your financial situation is "iffy" you may even want to take this a step further and speak to a Financial Advisor as your first step. A good Real Estate Agent can help you through all of this and recommend a trusted team of professionals that will work together to help you realize your dreams.
#3 Not Anticipating ALL The Costs: When you purchase a home there are many fees involved and those fees can add up quickly, especially when you're not prepared for them. Many of these fees come in advance (some post purchase) of the purchase and are on top of your savings for your downpayment and need to be included in your financial plan. Your Real Estate Agent, Mortgage Broker and Financial Advisor will assist you with determining which of these applies to you. These can include:
Credit Report Fee
Loan Application Fees
Land Transfer Fees
#4 Looking Beyond Your Means: This again goes towards to the financial aspect of buying your first home. Many first time home buyers look at the mortgage costs only when they factor in affordability. Why? Because many are used to paying rent. Remember, buying a home is not like paying rent. There are many expenses to factor in to your monthly costs that would not apply to most renting situations. These include PUC, Gas, Heating, Property Taxes, maintenance, repairs including the equipment such as snow blowers, lawn mowers, pool boys (kidding on that one of course). Costly repairs to a home are not uncommon - floods, leaking roof, broken appliances, broken windows and more. These are very realistic home owner expenses that should be saved for and factored into your monthly expenses so the money is there when you need it (and you will need it).
#5 Not Working With The Right Agent: I know, I know. This one sounds like my sales pitch to you but it is important (whether or not that Agent is our team). You want to choose someone who you trust, who you feel is listening to you, your needs and considering your budgets. You want someone you feel comfortable with in voicing concerns and you need to know that they're patient with you and all of your questions and you're new to this and are looking to them to guide you through it all. Also you don't want to follow your Agent mindlessly. Your Agent can be your best friend through this process and you should ask questions and take their advice, but don't do so without thinking things through on your own as well. You know your wants and needs and they can help you get there and negotiate great deals, but stop, think and listen to yourself.
Congratulations if you are thinking of taking this first step into home ownership and whether you decide to work with us or you have a trusted Agent that you're working with right now, we wish you the best of luck and hope that these tips help you make it a successful transaction towards your future.
For more tips and information about buying a home, bookmark our site regularly for updates to our buyer's section or contact us and we'll get you a copy of our comprehensive buyer's guide that walks you through the entire process and provides more expert advice.
Happy house hunting from both of us at the J Team!
Joanne Kovich & Jason Sproule
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