The beginning of the year is often a time for New Year's Resolutions and making some decisions about your future. For me it's a time to write down my goals and decide how I will shape my next year to help achieve those goals.
A big goal that I have, and many people tend to have, is to get finances in order in the sense that funds are being allocated properly and smart investments are made.
It came to me that one of your goals this year may be to purchase your first home. For anyone who knows me - this is my wheelhouse! I love working with first time homebuyers and guiding them through this process which for most seems intimidating at first. My number one tool for first time home buyers is education to ensure this first purchase is a smart one.
Today I decided to break the process down a little for you to read and possibly start doing your own research. Ultimately, I want you to talk to me first, but if you're still of the mindset that you'd like to figure some things out for yourself, I'll leave these here so you can browse through these from the comfort of your home/office without any pressure to start making moves.
5 Steps to Buying your First Home:
1. Decide if home ownership is right for you:
I have encountered enough clients to know that home ownership really isn't for everyone, and that's ok, but it's something I'm not sure enough people are considering ahead of time. For starters it is a tremendous investment and an equally tremendous amount of responsibility. If you are comfortable making smaller rental payments along with your monthly expenses, a mortgage can be a huge shock. Often people get hung up on the down payment and closing costs, but truly it's so much more than that. Of course your down payment is your first step, but you also have to consider your mortgage payment, CMHC fee (if you plan on putting down anything less than 20%), property taxes, home insurance, condo fees (if that's where you plan on purchasing first), monthly utilities AND THEN your monthly extras like telecommunications, groceries, entertainment, etc.
Like I said, it also comes with it's fair share of responsibility. You now own property and along with that many unexpected things can occur such as leaky hot water tank, a a strange noise coming from the furnace, to name a few. One of the biggest reasons I suggest a home inspection to my first time home buyers is because it forces you as a homebuyer to look at the house in components rather than the totality and a home inspector can and will teach you about these components and how to maintain them over the years to come.
2. Talk to a mortgage specialist:
All those items I just threw at you in terms of monthly costs will be addressed with your mortgage specialist who will help you make a decision as to what you can comfortably afford. Like I said, down payment is one thing, your budget will dictate what you can purchase with your current income and personal debt ratio. They will also look at a particular purchase price and take into account all the monthly expenses to create a budget to see if you can afford that monthly payment, and if you feel comfortable with paying that monthly payment. Remember: not everyone is comfortable paying this monthly, even if they can afford it.
Many people feel this is an awkward and uncomfortable step to take as they don't usually need to discuss their finances, but if you do anything this year, it's just that; discuss your finances with a professional and decide where you and your money are going in the future. You need a plan, easy as that.
A mortgage specialist will help you with that plan and even if you come to the conclusion that this won't be the year of home ownership, a mortgage specialist or financial advisor can help you come up with a plan that allows this dream in the future with a definite date to reach your goal.
Side note: you NEED a good mortgage specialist!! Not only is this person the "gate keeper" to your new home, they're also a wealth of information in the home buying process. So talk to me if you don't have one, I'll hook you up.
3. Talk to me!
This one seems obvious, but once you've made the decision to become a home owner and you've met with a mortgage specialist to discuss your finances, the next step is to spend some time with me. In our first buyer meeting I will go over the process in its entirety, teach you how to read the Multiple Listing System, as I will send you listings via email, teach you how to read an offer to purchase, teach you about different areas of the city and their respective price points, and discuss closing costs with you if that hadn't come up with the mortgage specialist already. Honestly this list goes on and on, but why don't we just meet so I can explain in person.
4. Hit the ground running!
This is the fun part. nNow that we've all talked your ear off, we get to go hunting for your new home. Looking at houses/condos for the first time is truly exciting and I promise to keep it fun. Of course my job is to educate you on red flags that I see and potential future issues, but for the most part the experience should be fun and exciting. Just think: one if these will be yours in just a matter of time!
5. Closing on a property:
Now we've chosen your new home, just a few more steps to the finish line. At this point we will make a decision about what we can purchase the home for, how we will write the offer to purchase to ensure everyone is a happy camper, and negotiate until both you - the buyer - and the seller feel their needs have been met.
Once we have a confirmed deal we go to work on getting your mortgage in line and completing a home inspection if you so choose. At this point there are also a number of "behind the scenes" things happening such as ensuring your lawyer has a copy of your offer, your mortgage instructions are sent to your lawyer, your insurer has complete information about the home to ensure you get proper insurance, etc. Truthfully, there are quite a few moving parts in this step, but I am extremely organized and I have this system stream lined to ensure you never miss a deadline and that no detail gets missed.
There you have it: a very quick overview of purchasing a home with me. Like I've said a few times, it is a little more involved, but let's grab a cup of coffee to really get into it - my treat!
2017 is your year and I'm here to help you reach your real estate goals!