Did you know that the majority of first-time homebuyers are Millennials? That’s right; Canadians born between 1980 and 1995 now represent a full 77 per cent of first-time homebuyers. If you fit the mold, then get a leg up on the competition as we enter the year’s hottest real estate month. Here are our five top tips for first-time homebuyers.
First-Time Homebuyers’ Tip #1: Prioritize your house (or condo) hunt
September is the busiest month for real estate transactions. The MLS is on fire; your real estate agent will be texting you non-stop, and other prospective buyers will be out in full force. If you’re looking to buy this winter, now’s the time to take a few personal leave days to house hunt.
Sit down with your partner to hammer out priorities so you’re on the same page when it comes to your house hunt. Then, once you see a strong candidate, be ready to act fast.
First-Time Homebuyers’ Tip #2: Get pre-approved
It’s important to launch your house hunt having already obtained pre-approval for a mortgage. This marks you as a serious buyer, and lets you jump on a property you are interested in without losing time applying after the fact. Mortgage pre-approval also helps narrow your search as you have your price range established.
Use my handy Financial Planning Calculators to get an idea of how much of a mortgage (and home) you can afford.
First-Time Homebuyers’ Tip #3: Start saving for a down payment early
It’s common to put 20% down, but many lenders now permit much less, and first-time home buyer programs allow as little as 3% down. But putting down less than 20% may mean higher costs and paying for private mortgage insurance, and even a small down payment can still be hefty. For example, a 5% down payment on a $500,000 home is $25,000.
Play around with this down payment calculator to help you land on a goal amount. Some tips for saving for a down payment include setting aside tax refunds and work bonuses, setting up an automatic savings plan and using an app to track your progress.
First-Time Homebuyers’ Tip #4: Pick the right type of house and neighborhood
You may assume you’ll buy a single-family home, and that could be ideal if you want a big yard or a lot of room. But if you’re willing to sacrifice space for less maintenance and extra amenities, and you don’t mind paying a home-owners strata fee, a condo or townhouse could be a better fit.
But even if the home is right, the neighborhood could be all wrong. So be sure to:
- Research nearby schools, even if you don’t have kids, since they affect home value.
- Look at local safety and crime statistics.
- Map the nearest hospital, pharmacy, grocery store and other amenities you’ll use.
- Drive through the neighborhood on various days and at different times to check out traffic, noise and activity levels.
First-Time Homebuyers’ Tip #5: Obtain a home inspection
Even if the home you plan to purchase appears to be flawless, there's no substitute for having a trained professional inspect your potential new home for the quality, safety and overall condition. If the home inspection reveals serious defects that the seller did not disclose, you'll generally be able to rescind your offer and get your deposit back. Negotiating to have the seller make the repairs or discount the selling price are other options if you find yourself in this situation.
Be a Ready First-Time Homebuyers
Real Estate is a fast paced, dynamic environment that can be intimidating for anyone. You want to have a Realtor whose fundamental goal is to put your best interests ahead of anyone else's in order to get the results you need. That's my job and it's something I take very seriously and it's a job I love to do. Contact me and find out how I can help you! Sheldon Coxford 778-835-5621
