Dear David,
My partner and I finished university about 3 years ago. We’ve been working hard since then, and after seeing several friends buy their first homes, we feel inspired to take the plunge. What do you think we should do (or avoid) to put ourselves in the best possible position? – FIRST TIMER
DEAR FIRST TIMER: Asking questions is the first big step towards success, and I encourage you to be curious. Ask your friends about their home-buying experiences. How much did they pay, and what is their mortgage rate? What do they love most about their new house, and what swayed their purchase decision? Ask friends to share which parts of the buying process went well, and what advice they have for others just starting out. This isn’t being nosy, it’s market research.
My advice in real estate (and in life) is to surround yourself with professionals. Do your homework with experts rather than chasing online mortgage approval and hopping on Realtor.ca. Have a mortgage specialist look under your financial hood. If you’re not a saver by nature, stop shopping. Retail therapy and credit card bills that go with it can put a real dent in your home buying ability. Mortgage approval takes income and monthly debt load into account, so buying a new car at the wrong time can set you back years. An extra $600/month payment takes away $100 thousand of house buying power.
Check your credit score, but don’t sign up for monitoring services that bill you monthly. Your credit score gives you an idea of how you compare to the average person. Something as simple as a $50 cell phone bill you forgot about in college can scar your credit score and keep you out of the real estate market. If you’ve had some credit oversights, it’s time to clean them up.
A mortgage specialist or trusted mortgage broker can lay out your home-buying budget and offer advice about how to prepare financially for your purchase. Map out your home buying expenses and see if you qualify for a five percent down payment. Investigate what additional funds you might need to cover closing costs, such as moving expenses, home inspections, lawyer fees and utility hookups. Depending on the state of the house, you may need to budget for renovations or repairs. With pre-approval, a budget in hand and your down payment ready, you’re ready to start shopping in your price range. Hire a real estate agent based on recommendations from family and friends.
PRO TIP: Take emotions out of the equation. I often tell buyers they can like a house, but they can’t love it until we’re sure of the purchase. As a broker, it’s my job to make a seller’s house look pretty, so look past the artwork and throw pillows. A ten-out-of-ten house in the wrong neighbourhood is a mismatch, and when you’re making a major commitment, you need to go in with your eyes wide open. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Call or text today for your free home evaluation! 519-577-1212.
