For many people, buying a home is the most important purchase they’ll ever make. Whether you’re looking for a cozy condo or you want to settle down in the suburbs, it signals a new chapter in your life. Going through the buying process and paperwork takes time, but seeing a first-time buyer walk through their new home is one of the best parts about my job.
I’ve worked with people from all walks of life who have different ideas of what their first home looks like. Over the years, I’ve learned that if you work with your realtor, do a little bit of homework, and follow these 5 tips, you'll avoid the stress that comes with buying their first home.
#1 Know Your Budget
Before you go home hunting, it's important that you're aware of the hidden costs associated with buying a home. Besides being able to afford a mortgage and where your home is located, first time buyers should be aware of additional expenses like property insurance, and maintenance,
If you need help figuring out what your options are based on your income and living expenses, try working with a mortgage broker or mortgage specialist. They'll work with you to determine how much you can afford to spend while factoring in all of these extra costs.
While there's nothing wrong with cutting expenses, you shouldn't have to sacrifice your everyday needs. If you have to drastically change your quality of life in order to get that home you've had your eye on, it might be better to wait until another opportunity comes up.
#2 What’s Your Credit Score?
Most people avoid talking about their credit score, but it's important that you're aware of this number before applying for a mortgage. The last thing I ever want people to experience is spending all of their time and energy finding their first home, only to be denied or have to pay a higher interest than they thought. In order to get peace of mind, you should work with a mortgage broker/specialist to find out if you can get pre-approved. They'll consider factors such as your income, credit, and job history to account to determine what you are able to afford. To learn more about pre-approved mortgages,check out this this post.)
To find out your credit score, use a service like Equifax or TransUnion Canada. Both of these companies allow you to check your score for less than $20. According to TransUnion, it's highly unlikely that you'll be approved for a mortgage if your score is less than 650. Although there aren't any quick-fixes when it comes to increasing your score, paying off bills on time is a tried and true way to get your numbers up.
#3 What Kind of Home do You Need?
From condos and townhomes to spacious multi-room houses, finding a home is all about what works with your budget, needs, and lifestyle. Working with a realtor allows you to see homes that might not be actively promoted or ones you might have missed.
When speaking to your realtor for the first time, don't be shy! I've heard all kinds of requests in the past and I'll always work hard to exceed the expectations of my clients. Be sure to tell them what characteristics you absolutely want your first home to have, such as a back yard, basement, or patio. This allows them to have a better understanding of what your first home will look like.
#4 Consider the Neighbourhood
Your home is part of a larger neighbourhood and each part of the city has it's own distinct characteristics. Instead of spending time on research, working with a realtor who is familiar with the area allows you to discover parts of the neighbourhood that are overlooked.
Thinking about settling down and starting a family? You might prefer an area that's quiet and safe as opposed to one that's close to the hustle and bustle of downtown. Being closer to parks and daycares might be a priority. Regardless of what your expectations are, speaking with a trusted realtor will allow you to strategize and come up with the best possible plan based on what you’re looking for.
#5 Work With a Professional
Considering buying a home is the most important financial decision you likely make, make sure you’re working with a full-time professional throughout the process. The industry experience and relationships with property owners that full-time realtors have will make the process vastly easier and safer. You’ll have an experienced negotiator on your side and someone that will always ensure that all of the necessary documents are filled out.
It's always best to work with an agent who has a proven track record. They should also be familiar with the areas you plan on visiting when you explore the neighbourhood. Feel free to ask them about their past deals with clients and some of the homes they’ve sold.
Which one of these tips was your favourite? Let us know in the comments! If you’re looking at taking the next step to buying your first home, give us a call at 780-438-2500 or visit our Edmonton Home Buyer’s Guide page for more information.