I recently had a relative reach out to me with this very question. She was moving from the United States back to Canada and wanted to buy her first home in Ontario. Having never purchased real estate before, it was understandable that she didn’t know where to start.
Mortgage – Know What You Can Afford
The first thing I always recommend to buyers (whether it’s their first purchase or not), is to contact a mortgage professional. Set-up a meeting at your local bank or contact a Mortgage Broker. Mortgage Brokers have access to many different lenders and don’t cost the buyer anything as the lender (the bank or credit union) pays the broker. If the buyer does not qualify for a traditional mortgage, mortgage brokers can look at secondary sources called “B” lenders. The interest rates are typically higher, but it may be what you need to buy that first home.
Deposit – How Much Do You Need?
Buyers need to know that besides knowing how much they can afford, they also need to have money readily available for a deposit when the time comes to make an offer. In a standard market, 5% is usually fair. In a frenzied sellers’ market (more buyers than homes available for sale), you may want to think about a larger deposit. This deposit is deducted from the down payment or goes towards your down payment.
Choosing a Realtor®
As a first-time home buyer, you may not know any real estate agents. The best way to find a real estate professional is asking friends and family for recommendations. Ask them why you should use them. If you don’t know anyone in the area but you know another real estate agent, they can use their network to find you someone local. Don’t be afraid to talk to more than one Realtor®. Ask them about their local knowledge of the area you want to buy in. As a Walnut Grove Realtor® in Langley, I am often hired for my local knowledge. Knowing the neighbourhood is especially important because of things outside Realtors® may not know such as flood plain information or condos that have had many issues. Make sure they are responding to you in a timely manner. You need to have a responsive agent especially during negotiations.
Once you know what you’re qualified for and have hired an amazing local Realtor, have the agent start sending you information on homes in your desired area that fit your budget. Also, don’t hesitate to lean on your Realtor® for credible recommendations of lawyers, mortgage brokers and home inspectors. Real estate agents have a wide variety of trusted relationships.
Happy house hunting!
