10 Tips For Home Buyers
Searching for your Dream Home? Whether you’re a first time home buyer, an experienced home buyer or a senior or empty nester seeking to downsize, we’re here to help. We’ve put together 10 Helpful Tips for Home Buyers to make the process as smooth as possible. Of course, we’ll be here with you every step of the way to ensure a successful search for your new home.
1. Write out the wish list
Determine needs and wants. Create a list of features you could do without and ones that are absolute must-haves. Consider lifestyle as well. Do you like being close to downtown, or would you prefer living outside the city? Do you like the prospect of maintaining a garden? Where do you want your children to attend school? These are lifestyle decisions that play a large role in the new home buying process.
Photo by J. Kelly Brito
2. Calculate the total cost of buying
There's more to the cost of buying than simply the price of the home. Plan for the costs associated with:
• Home inspection fee
• Legal fees
• Appraisal fee
• Land transfer tax
• Title insurance
• Interest adjustment
• Property and fire insurance
3. Get Pre-Approved, not just Pre-Qualified
Pre-qualification means that a lender will give you an idea of the mortgage amount you qualify for based on the information you provide regarding your overall financial picture, including debt, income and assets. Loan pre-qualification does not include an analysis of your credit report or an overall in-depth look at your ability to purchase a home.
Getting pre-approved is more involved. A loan application is completed and you will supply the Lender with the necessary documentation to perform an extensive review of your financial background. The mortgage lender will review the following information: income, debt, assets, confirmed monies available for down payment and closing costs.
Pre-approved and pre-qualified are not the same thing. Before you begin your home search get pre-approved.
4. Aim for a 20% down payment
Your down payment should be at least 5 per cent of the price, but aim to put down 20 per cent of the value of the home in order to qualify for a conventional mortgage. With a down payment of less than 20% you will have to pay for Mortgage Insurance.
5. Tap into RRSP Savings
Through the Government of Canada Home Buyers' Plan (HBP), first-time home buyers can withdraw up to $25,000 from an RRSP to purchase a first home, without having to pay tax on the withdrawal. It allows a couple to withdraw up to $50,000.
6. View the area at different times
A perfect neighbourhood at 10am may not seem as good later in the evening, so get to know the area you're interested in on more than one occasion and at different times of the day.
Wander around and talk to the local residents. Check out local shopping, access to transit, schools, parks and dining.
7. Get a home inspection
Home inspections have become an integral part of the home buying process. There's no substitute for having a trained professional inspect the property. Depending on the size of the home, the inspection can take between 2 and 3 hours. It's a detailed look from roof to foundation.
A home inspector is an objective expert and your advocate. However, the inspection is about more than just finding faults with the property.
Join the inspector during the process. Find out where the electrical panel is, get to know about the wiring and plumbing, pick up tips about the furnace and AC to learn preventive maintenance tips and about seasonal upkeep.
As part of the process, you will receive a report on the property that will outline the "have to fix", "want to fix" and "keep an eye on" items you and the inspector may have discussed. It should provide ballpark estimates for making future repairs.
With a home inspection, you have the chance to gain first-hand knowledge and come away with a "Buyer's Guide" to taking care of your purchase.
8. Have a pre-closing inspection
The pre-closing inspection, also referred to as "the final walk-through" is another step in the home buying process. Chances are, you'll have negotiated a 60 or 90 day closing date, and things can change during that time. Don't miss the opportunity to conduct an inspection prior to completing the deal. Why?
• To validate that the appliances you saw, and think you're purchasing as part of the deal, are the ones in the home.
• To ensure no water or fire damage has happened since the home inspection.
• To see that other fixtures and chattels you expect to be there… are indeed there.
Protect your investment, take your time to poke around inside and outside.
9. Ask the Sellers to provide a copy of the survey
A survey is an accurate graphical representation of the size and extent of the property that shows the location of the house and other structures. It will reveal most title or boundary-related issues on the property that have the potential to become problems in the future. Keep in mind that an existing survey may not show the position of a deck or fence, etc. that was installed at a later date.
10. Be clear on the contract
Be sure you understand every aspect of your purchase before making a commitment. Legal jargon and real estate terminology can be confusing, so be sure to work with a knowledgeable experienced agent that can explain the details for you and don’t be afraid to ask questions along the way.
For more information, a no-obligation, free home evaluation or assistance in buying or selling your home, please contact:
Lynne Sampson Blott
call: 416-540-7307 | e-mail: lynne@lynneblott.com | visit: theblotts.ca | text: 416-540-7307
