10 Tips for First Time Buyers
So last year in the fall I purchased my first home. It was exciting, terrifying, stressful, frustrating and gratifying all in one. I ran into road blocks at every step and I’m just now coming around to feeling good about my new home, partially because I’m now working on my own projects and making this house a home, but partially because the process was a bit of a nightmare. There are a few things I wish I’d looked out for before purchasing and I’ll definitely keep in mind next time. I’m no expert by any means, and I’m not a professional, so please make sure that you use the proper professionals, like condo doc reviews, lawyers etc.
What are you looking for?
This is so specific to what you’re looking for as a homeowner, how many bedrooms, how many bathrooms, how high do you want the ceiling, do you want his and hers sinks? How big do the closets need to be, do you want a garage or is underground sifficient if you are buying into a building? I made clear on my list of what I was looking for before looking, and of course added things as I went, but my core wants stayed the same, and I found something that hit almost everything on my list. Here’s what I wanted for reference:
Tall ceilings (9'-10’)
His and Hers sinks in the Master Bath
3+ Bedrooms
2+ Bathrooms
My own garage/place to store my tools
Rooftop patio
Backyard or green space for Jack (my dog)
Deep kitchen sink (farmhouse preferred)
New appliances, or at least still under warranty
There were others, but those were major ones for me. Mind you finding these all in this area was really difficult, and there were certain things I would need to compromise on if I wanted to have a space within my budget.
How to calculate your budget
I had all these lofty goals when I started looking at places and had a crazy budget in mind. I think a lot of people last year looked at the interest rates and started imagining what they could buy for so little down, and low mortgage payments. What I did, and what mortgage lending companies will do, is do a stress test on your finances. The interest rate might be at 2.5%, but what does a mortgage calculator look like if you add a few percent and your mortgage already jumps up. If you can’t afford that, or it feels like a stretch, it’s probably best to adjust your budget. Make sure you are carefully looking at your realistic finances when you calculate how much you can spend per month. This is where it’s important to take into account the average cost of energy, electricity, water etc. to make sure these are part of your budget. If you are looking at a condo or townhome that includes these, that allows you to increase your mortgage as well. Here is a link to the calculator I used to determine what I could afford and experiement with the stress test.
I had issues right left and centre with the real estate agents knowledge, mortgage broker continuously forgetting about my file and me, and then the buyer deciding to not adhere to proper standards. I’ve put together a few things that I found helpful and I’m glad I learned, but some I wish I had learned before starting the process.
Determine your budget: Before you start house hunting, it's essential to know how much you can afford. Consider your income, expenses, and debts to create a realistic budget. This will help you determine how much you can borrow and what type of home you can afford. Using the mortgage calculator will help determine this if you have no idea where to start.
Get pre-approved for a mortgage: Once you know your budget, get pre-approved for a mortgage. This will give you an idea of how much you can borrow and what your monthly payments will be. A pre-approval also shows sellers that you're serious about buying and can help you stand out in a competitive market.
I had an absolute nightmare experience with my mortgage broker (and they are no longer giving out mortgages, so that’s probably for the best), and although I aimed to get a pre approval, by the time they finally got their stuff together it was a tight fit to make sure that I could get the property that I needed. Make sure to start this process early.
Work with a real estate agent: A good real estate agent can make all the difference when buying your first home. They can help you find properties that fit your budget and preferences and guide you through the home buying process. Look for an agent who is experienced in working with first-time homebuyers and knows the Calgary housing market well. I did more research than my real estate agent, and an oversight on their part both cost me an extra $600, but it also made it so I bought next to new construction that was a lot taller than I was told and would take twice the amount of time so I’m still living next to construction for the year ahead. Find someone that is reputable, but also look at options through a friend who has had a great experience.
Research neighbourhoods: Calgary has many different neighbourhoods with unique features and amenities. Research the neighborhoods you're interested in to determine if they're a good fit for your lifestyle. Consider factors such as proximity to work, schools, parks, and shopping. Avenue Calgary has a great magazine issue focused around Best Neighbourhoods, and I use it as a handy tool to determine where I want to look at next. I know that a lot of cities have something similar, and it’s never a bad thing to do thorough research, and if you can try and do a drive through of the area to understand how you feel, the walkability and what amenities are close by.
Attend open houses: Open houses are a great way to see properties and get a feel for different neighborhoods. Take advantage of them, even if you're not sure you're ready to buy. Attend as many as you can to get a sense of what's available and what you're looking for in a home. I’ve been going to open houses all my life, and when I started looking for a home I was in a rush, but I still had a vague understanding of what I was looking for because I’d walked through many in my lifetime. I recommend just going and seeing what is out there so when push comes to shove, you know what to look for. Some things don’t show up in a real estate listing, like how the basement smells like cat pee, or how the stairs creek and moan when you walk on them.
Consider additional costs: When budgeting for your home purchase, don't forget to factor in additional costs such as property taxes, home insurance, and closing costs. These expenses can add up quickly, so it's important to plan for them in advance. If you are buying a condo or for me, my townhome was also applicable, you want someone to review your condo docs, but you also want to be able to read through them and understand the basics. I caught an error in my documents that could have meant a major cash call for me because the roof in an adjacent building was potentially something the townhome users were on the hook for. It’s always good to clarify to make sure there are no hidden potential costs.
Get a home inspection: A home inspection is an essential step in the home buying process. It can help you identify any potential issues with the property before you make an offer. Make sure to hire a qualified home inspector and attend the inspection so you can ask questions and get a better understanding of the home's condition. I did not do this, but only because the building was only two years old, and any issues would have shown up in the condo meeting minutes since most of it was still under warranty and the builder had to fix
Don't rush the process: Buying a home is a significant investment, and it's important to take your time and make the right decision. Don't rush into a purchase, even if you feel pressure from a competitive market. Take the time to research properties and neighborhoods, get pre-approved for a mortgage, and work with a real estate agent you trust. Start looking well before you have to, because you don’t want timing to drive you to make the wrong purchase.
Research the Market: Calgary's housing market can be competitive, especially for first-time homebuyers. Be prepared to act quickly and make competitive offers. Working with a real estate agent who knows the market well can help you stay ahead of the competition. You should be keeping an eye on new places coming on the market and read up on when you need to secure rates. Your real estate agent will have a lead on when the interest rates are going up and so will your mortgage brokers, but it’s good to have some understanding yourself.
Stay flexible: Finally, be prepared to be flexible in your home search. You may need to adjust your expectations or compromise on certain features to find a home that fits your budget and needs. Keep an open mind and be willing to explore different neighborhoods and types of properties to find the right home for you. I made a checklist of everything I wanted, but then had to compromise because I deemed the location to be more important than a yard.
Buying your first home can be a scary but rewarding experience. Remember to take your time, do your research, and work with a qualified people to find the right home for you. Have patience, but most of all enjoy the experience and tour all the homes you possibly can to find the right fit for you!
- Love E