2022 brought some good news for first-time home buyers. The federal government banned foreigners from buying properties in Canada for the next two years. This means, there will be less competition when bidding. Also, the market’s somewhat stabilised after the pandemic real estate explosion and you can see more homes available on sale than before. As a first-time home buyer, you know there’s a long way ahead until you become a homeowner. You might have so many questions in mind. To help you out and answer a few questions, I’m listing my best and proven advice as an experienced real estate agent in Brampton.
7 pieces of advice for first-time home buyers from a real estate pro:
1. Be prepared for the 15 or 30-year mortgage period
Buying a house is a huge commitment. You not only spend your life savings as down payment but also commit to an extremely long loan term. Life’s uncertain and having a backup plan is important. Think of any events in the next 10 years that’ll need a large amount of money. It could be your wedding, parents’ health issues, or expenses related to your kids. Start a fund for these expenses and deposit a certain amount every month.
2. Don’t skip mortgage pre-approval
Unless you’re making a cash offer, getting pre-approved for a mortgage is a must. You want the sellers to trust you and have confidence in you. Most sellers in Brampton will directly reject your offer if you aren’t pre-approved.
3. Find a realtor you’re comfortable working with
One of the most important parts of the home buying process but often ignored is finding a realtor you like working with. A good real estate agent is someone who adds value to the process, doesn’t pressure you into putting in an offer, and answers every question you have in detail.
4. Account the closing costs into your down payment savings
When you work with a mortgage broker, they’ll inform you about the closing costs. As a first-time home buyer, you get some rebates from the federal government but you still have to pay the full amount. Include those costs in your down payment because you can’t add them to your mortgage.
5. Submit a deposit with your offer
If you’re feeling confident about the house, submit your offer with 1 to 3% deposit. It increases the seller’s confidence in you and will consider your offer more seriously than others. Remember, it’s non-refundable, so if you back out after closing, you’ll lose that money.
6. Save physical copies of your paperwork
Everything’s digital nowadays, so it’s a good idea to take copies of all the paperwork. Emails can be deleted by accident or lost by either party. I also recommend my clients to save a copy on USB or memory card and store it in their safe.
7. Remember your first home isn’t an investment
You’re likely to end up spending a lot more during the home buying process than you think. I strongly recommend clients to keep $10,000 to $15,000 as backup for any last minute costs. Don’t think of your first home as an investment. Yes, it will rise in price and you’ll make money when selling the house in the future. Don’t rush into selling the house if you’re getting a good return on your investment.
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