You’ve been saving up and it’s almost time to finally buy your first home. Congratulations! Buying a home is one of the most meaningful, exciting investments we make in our lives.
By now, you probably have a good idea of what you want – high-rise condo or house, city or suburb, and so on – but there are many things to consider as you prepare. To help you navigate through some of the immediate, critical decisions, here are four tips when buying your first home.
Find the Right Agent
About 90% of buyers use a real estate agent. A home is a significant investment, and working with the right realtor can make a real difference. While realtors charge a commission that impacts your price, they also perform valuable services to help you find the right home. You can buy a house with or without a realtor, but you should know the implications of each option.
Most realtors will:
- Keep you updated on new properties that match your interests
- Advise you on trends and property values in your neighbourhood, timing and seasonality
- Negotiate the purchase price
- Schedule appointments and show you houses that suit your needs
- Recommend mortgage brokers, real estate lawyers and home inspectors
- Know the ins and outs of home inspection
When you’re looking for a realtor
- Get referrals from family and friends
- Take note of newspaper ads and sale signs in the neighbourhood
- Look out for potential conflicts of interest
- Pay attention to the working agreement, including the length of time you’re signing to
Be Thorough with Your Sales Agreement
The sales agreement is a binding contract between you and the vendor. It is critical that you list all the specific details of your offer, including conditions on financing and inspection, if necessary. The agreement is typically accompanied by a deposit.
Get a Home Inspection
Home inspections are not mandatory, but they are good practice considering you may not be able to see some of the problems or issues with your property at first glance. A typical home inspection will cost you around $300 to $600 depending on the house, and some home inspectors will charge for travel costs. Purchasers often make passing inspection a condition of a purchase. The home inspector will provide you with a report as proof of the inspection.
Remember Closing Costs
On average, you should budget 3 to 5% of the value of your new property for closing costs. These costs can include everything from tax adjustments to home inspection to legal fees. Your real estate lawyer will deal with closing costs and make adjustments for taxes paid, land transfer tax and any outstanding utilities.
You may have questions as you look for your first home. The more questions you ask up front, the less likely you’ll be surprised after you buy.