FIRST TIME BUYERS
ARE YOU READY FOR HOME OWNERSHIP?
Owning a home may be your dream, but in order for the purchase to be the happy and satisfying experience it was meant to be, you need to ensure that you are financially and mentally prepared for the responsibilities that come with it.
Some people have a notion that home ownership is like renting, but with the power to have pets and paint the walls whatever color you like. However, while these privileges are available to homeowners in most municipalities, they come with the responsibilities of a mortgage, taxes and home maintenance. Preparing for home ownership requires you to take critical stock of your finances and your expectations.
QUESTIONS FOR PROSPECTIVE HOMEOWNERS
ARE YOU READY TO BUY?
Owning your own home is about more than just being able to decorate any way you like; it’s about being prepared to maintain your home over the years, realizing that part of your income and time will go towards repairs and maintenance. It’s about being willing to take the risks of home ownership with a realistic expectation of the rewards.
HOW MUCH CAN YOU AFFORD?
It can be discouraging to find that your salary won’t stretch as far as the home you want to own. However, sacrificing a huge part of your income just to pay the mortgage can very quickly make home ownership a burden rather than a point of pride. It’s better to buy a modest home now and look at purchasing your “dream home” in a few years.
WHAT IS YOUR DEBT-TO-INCOME RATIO?
This is something that lenders take very seriously. Your overall debt should not be more than 40% of your income, and your housing debt should not be more than 32%. What 32% of your income will buy depends on where you want to live. In rural or downtrodden areas for example, it can buy a very comfortable residence and ample acreage. In highly sought-after urban areas however, it may not even buy a 400 square foot bachelor suite.
WHAT DO YOU WANT?
Do you like the idea of cleaning your own gutters? Do you shudder at the thought of lawn care? Would you rather just pay a fee every month and have everything done for you? Would obeying rules about when you can have your garbage cans out bother you, or do you want to live in a neighborhood where everything is ‘just so’? The answers to these questions can help you narrow down the search for the right type of property for you.
WE CAN HELP
You need a good agent who will work hard for you. Our real estate team is dedicated to helping you find the right home, at the best price. We want you to find the home that will make you happy and successful in real estate ownership.
When you hire us to help you buy your first home, we want to know what you want and how much you can afford. Then we’ll find a way to merge these two priorities and find a residence that you’ll enjoy owning.
Keep your objectives in mind when visiting a home. Sometimes the idea of owning a home can overwhelm your practical sense, so keep your feelings in check. Keep a list handy of the features that you need and want in a home, and judge each home by the list instead of by details that could distract you from your goal. When you’re alone with your agent, you can go over the pros and cons of each home. We can help you stay on track while still keeping our eyes out for a great property.
Engage the services of a good real estate lawyer. We can recommend several lawyers in the area who might be a good fit for you. Interview them to ensure that you get someone you can work with. The legalities of transferring land ownership can be dodgy, and a lawyer can be your best defense against future legal troubles. A good lawyer can charge several hundred to over a thousand dollars for their services, but the thousands of dollars saved in legal fees later on makes this a good expense.
Make the offer. This can be a maze of “buyer”, “seller”, “chattels”, “deposit”, and “completion”. We’ll be happy to prepare the paperwork and go through it with you before submitting it. Remember, the seller may reject or counter your offer, so even at this late date, avoid setting your heart on the home you hope to own. You’ll probably have to write a deposit check to the seller’s broker that proves the seriousness of your offer.
Get all necessary inspections done. A home inspector will check for signs of harmful materials like asbestos, lead paint and mold. They’ll also check for evidence of pests, faulty wiring and leaks. This is a crucial part of the home purchase. Notgetting an inspection done means that you could be stuck in a home with a bad case of black mold and no recourse other than to pay for its removal. Inspections will cost a few hundred dollars, but again, this is more than worth it in the end. There are several inspectors in the area that we’d be happy to recommend.
Do a final walkthrough before closing the deal. We’d be happy to do this with you to make sure that everything agreed upon is completed prior to the final signing.
From the first interview that determines your requirements to the moment that you receive the keys, we can help you with the complicated process of buying a home. Don’t hesitate to contact us to find out more about how we can make the home buying process easier!
HOME BUYING TIPS
Know what you want. A lot of buyers aren’t sure of their needs or financial limitations. Before you even start your home search, you should have a general idea of needs such as:
• Price range • # of bedrooms • # of bathrooms • Square footage • Location • Age of home • Nearby amenities
CREATE A SHORT LIST
You can’t view them all. A manageable short list should be 4-7 houses. You will be viewing 10-15 houses depending on your interest and house locations. This can be tiring especially for toddlers so you may want to consider child care. Also remember to eat and drink before you start. Otherwise, feel free to ask me anytime for a quick break or a bite to eat.
Viewing houses is exciting but can also be overwhelming. When looking for a new home, keep in mind the location and condition.
Major considerations in an offer to purchase are the deposit, possession date, conditions, and of course, price. The price has the most leeway because it can be affected by the seller’s motivation, your (apparent) level of interest, and comparable sales. This is where our knowledge and experience prove valuable. But the other factors can also make or break a deal, especially in competitive or multiple offer situations.
Conditions, if not met by the stated Condition Day, can cause a deal to collapse. Most offers to purchase have at least one condition, usually financing. Offers can be subject to property inspections, condominium documents review or sale of the buyer’s home. Be sure to give yourself ample time (usually 5 or more business days) to satisfy these conditions. Also note that in competitive situations, the fewer conditions you have, the better.
When all the conditions have been met and the property goes from being conditionally sold to being SOLD.
POSSESSION AND CLOSING
Firm sales need to be conveyed to lawyers representing both the buyer and seller. This information will be forwarded by the listing agent’s office in order to facilitate the transfer of funds and closing. You will need to schedule a meeting with your lawyer and provide them any documents that they request. Once the money transfers to the seller’s lawyer, permission will be given to “release” the keys to your new home at noon on possession day. We will then do one final “walk-through” of the home with you, to ensure that the house is in the same condition it was when you bought it.
CONNECT TO A PROFESSIONAL
Contact us anytime you need to know more about the area or any property that interests you. When you’re ready to take the next step toward purchasing a home, we’re here to help.