Whether you are a first-time home buyer or a veteran, buying property is a complex process. As one of the biggest financial and lifestyle decisions you can make and it’s easy to let emotions to get in the way of reality. So before you start imagining the new décor of your latest find on MLS, here are some key points to consider.
How do you know if you are ready to be a buyer? Buying a home is not for everyone. Take a moment to think through the advantages and disadvantages of owning verses renting.
You will make a good home buyer if you are:
- Willing to Stay in the Area
If your residency is uncertain, it’s probably a good idea to skip buying a home. You don’t want to be forced to sell before establishing enough equity to pay for all the costs associated with a sale.
- Financially Stable and Prepared
Mortgage lenders will expect to see stability in your employment history and some type of assurance that you can afford to own your own property. You need to know that on top of mortgage payments, you can afford all of the costs associated with your purchase as well as ongoing expenses like municipal taxes, utilities and home maintenance.
- Willing and Able to Maintain a Home
Homes require upkeep. You will have a lawn to mow, windows to wash, furnace filters to replace and you will need to tend to minor repairs and seasonal maintenance tasks.
If you have answered “yes” to these key questions, then it’s time to think about the specifics associated with home ownership.
Deciding that you are ready to be a home “buyer” is simply the first step in the home ownership process. Now comes the daunting task of really evaluating all of the key requirements associated with your purchase.
Here we have outlined what we consider to be…
The Top 5 things you should know before buying a house:
- What’s your Budget? First and foremost before buying a house, you should know how much a lender will allow you to qualify for. In addition, you should have a budget of what you really can afford over and above what the lender calculates. When qualifying you for a home loan, the lender does not take into account real world expenses such as child care, groceries, recreational spending or utilities. The lender uses a base line of allowing your house payment to be up to an estimated 32% of your monthly income, which hopefully falls in line with allowing for typical real world expenses, but that is not always the case.
- Where do you want to live? A tie for second place is getting to know the school districts and areas of town you are considering. School districts and location drive real estate value more than just about anything else. Before the fun of house hunting begins, there is homework to be done to seek out and plan where you want to be and if the schools and their proximity are acceptable to you.
- Are you thinking 5 years ahead? Once you have pinpointed an area or two, take a look around with an eye toward resale value. Even if you think this will be your “one and only home”, it is important to keep resale in mind. As you move into different stages of life, you may find that you will out-grow your current home. Think babies or empty-nesters! Look at the neighboring homes, the cars outside, the noise in the area, proximity to highways, train tracks or commercial buildings, etc. Always look at what the future buyer of your new home might look for and take that into consideration before you buy.
- What is the condition of the property? Once you have found the right home, you’ll want to know its workings both inside and out. The home may be beautiful but you’ll want to have an inspector take a look to uncover any ugly things that may be in hiding. In most traditional real estate transactions you’ll have the right to have the house inspected after a seller has accepted your offer to purchase.
- Does the home fit into your lifestyle? No matter what type of housing you choose, you must have a clear idea of your needs to day, as well as your possible future needs. Do you like doing yard work? If not, that beautiful, sprawling lawn and backyard garden are not going to beautiful much longer. And sooner or later, the charm of that 100 year old house will give way to a slew of required improvements that may see you spending your weekends renovating instead of relaxing. Be realistic about the amount of time and effort needed to maintain your selected home and whether or not this will fit into your desired lifestyle and stage of life…not just now but in the future.
Even if this not your first home buying experience, you will want to get help from a team of professionals. Having the help of professionals will give you experienced and knowledgeable people for reliable information and guidance to your questions.
Included in this group would be:
- Lender or Mortgage Broker
- Lawyer or Notary
- Insurance Broker
- Home Inspector
- Land Surveyor
- Builder or Contractor
At LOVE Where You Live, part of our service is to provide you with referrals for the experienced and reliable professionals you need. For more information Contact Us today!
What’s the difference between a real estate agent and a REALTOR®? Visit www.crea.ca/why to find out.