​10 tips for first-time home buyers

1. Start by finding a realtor. Look in the phone book or online or ask friends. Ask realtors for references, experience and success rates, and be sure you feel comfortable with the agent. Your realtor should be well-informed about every aspect of where you're looking for a home, such as the attributes of neighbourhoods, schools and community groups, and have experience negotiating deals in your price range.

2. Apply for a preapproved mortgage, which is usually good for 90 days. This will set your maximum mortgage amount and interest rates, so you can set your budget before house hunting. It also lets the seller know you are serious about buying a home.

3. Budget for extra expenses, such as moving, new appliances and utility hookups. Moving costs vary, but the average is about $500. Utility service charges for electricity and phone will total about $150 to $250. Add appraisal fees, title insurance and survey costs to your budget as well.

4. Prepare for closing fees. Andy Kloppenborg, a realtor in Winnipeg, recommends you put four per cent of the price of the house aside for closing costs, such as land transfer taxes.

5. Consider using the federal government's Home Buyers' Plan for first-time buyers to increase your down payment. It allows you to take $20,000 out of your RRSP tax-free and gives you 15 years to pay it back.

6. Buy the home you can afford. "You can't enjoy life if every cent you make is going toward paying for your first home," says Kloppenborg. While five per cent is the minimum down payment, putting more down reduces your costs. A small down payment leaves almost no equity in your home; if it's less than 20 per cent, mortgage loan insurance is often required, which leads to additional costs and higher interest rates.

7. Avoid hidden costs – and headaches – with a home inspection. It's worth the approximately $350 (though costs vary depending on house size) to get the house checked out before you make the commitment. Your real estate agent will advise you on how to make your offer conditional on the inspection. Find an inspector through an industry trade group, such as the Canadian Association of Home and Property Inspectors (www.cahpi.ca).

8. Make an offer only if you're serious. Wait to make an offer until you've seen several houses, and it should reflect current market conditions. Other factors to consider are the seller's needs, such as the closing date, and your budget.

9. Keep your emotions in check when negotiating because they can lead to impulse buying. Be prepared to walk away if a bidding war drives the house out of your price range.

10. Pay for
furniture now, not later. Deferred payment plans at furniture stores are helpful only if you pay the bills before they come due. "If you don't have the money to buy furniture, don't buy it,” says Steven Westman, an account executive at the Winnipeg branch of Money Concepts, a financial planning company. "Live without it or buy used furniture until you can save up."
by Sara Ditta

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Don Power

Don Power

CENTURY 21 Seller's Choice Inc.
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