It’s been two years now since I dipped my toe into the real estate market and purchased my first home. And while I was lucky to have my dad by my side, offering advice and tips, it quickly became clear just how much I didn’t know about the process. In today’s blog, I’m offering my top 5 tips if you’re thinking about buying a home!
1. Make sure buying is right for you
There are many pros and cons to both buying and renting a home. When you rent, you’re usually not responsible if things go wrong (leaky roof? Call the landlord!). Calculate how long you think you’re going to live in your new place – if you’re only going to be there for a short time, the cost of buying and selling a home may not be worth it in the long run. You can visit the CMHC’s website to assess if buying a home is right for you.
2. Save, save and save some more!
A down payment is the amount of money you put towards the cost of your home. It’s usually a good idea to save up as much as you can, as the bigger the down payment, the smaller the mortgage and interest charges! While you’ll need a down payment of at least 5% of the purchase price, you’ll have to purchase mortgage default insurance if you’re putting down less than 20% (here is some information from the Financial Consumer Agency of Canada about this kind of insurance). Check if you have the option of withdrawing money from your RRSPs to put towards your down payment – here’s information from Canada Revenue Agency about the Home Buyers’ Plan.
3. Research your real estate agent
While it’s tempting to pick a realtor quickly, it’s important to do your research. Ask for referrals from trusted friends, family members and colleagues and make sure you prepare a list of key questions to ask your potential agent when interviewing him or her (this Globe and Mail article has some good examples). Once you have a few real estate agent contenders, check with the BC Financial Services Authority to make sure they’re licensed (it’s the law in BC) and see if they’ve faced any disciplinary actions.
4. Finding the right home
While this may seem like the most fun step of the process, it can also be the most work (and most frustrating)! Be patient, and try not to let emotion cloud your judgement. Be critical and ask lots of questions: does the porch get morning or afternoon sun? Are there enough bedrooms to meet your needs (now and in the future)? Will you have to invest in a lot of unexpected upgrades? Are there enough cabinets and closets?
5. Understand the role of a home inspector
Once you have a home in mind, it’s time to think about getting an inspection! In BC, home inspectors are required to be licensed by our office (use our search tool, available here). It’s important to remember that a home inspection is a visual inspection and there are limitations as to what the inspector is able to see. Make sure you read your contract fully to understand and clarify the terms and conditions of the agreement (for example, if the inspection includes a review of a roof that is “readily accessible,” what does “readily accessible” actually mean?). You are not required to have your real estate agent present during the inspection or walk through, nor is your real estate agent entitled to receive a copy of the inspection report. For more information, browse through our blog posts with the home inspection tag.
Happy house hunting!