Buying your first condo apartment, townhouse or detached house can be an overwhelming experience. There is so much to consider. Buying a home is usually the largest financial purchase a person makes in their lifetime. For first-time home buyers, it’s the first time they are ever dealing with such a huge financial commitment. That is why in housing markets that are expensive places like Metro Vancouver and the Fraser Valley, it is important to avoid making major mistakes as a buyer. They can be costly!
Here are a few things I would advise my homebuyer clients in the Fraser Valley markets of North Delta, Surrey, Langley, Cloverdale, Abbotsford and Mission, to carefully consider when buying their first home.
USE A BUYER’S AGENT
The homebuying process should include starting by getting in touch with and interviewing a professional REALTORⓇ like me. Having the expertise and assistance of a buyer’s agent is a way to set yourself up for a smoother, easier and less stressful buying experience. A buyer’s agent has a fiduciary responsibility of confidentiality, utmost care and loyalty and follows a Code of Ethics.
This agent will inform you of essential facts that are affecting current market conditions, while maintaining and protecting your best interests. Moreover, a buyer’s agent will help discover facts relating to a property to avoid the potential of error or misrepresentation. Just as important, your REALTORⓇ walks you through the legal paperwork of the contract of purchase and explains terms and conditions in clear, simple and understandable language. This can be comforting to fully understand exactly what you are contracting to.
ADDITIONAL COSTS OF ACQUIRING A HOME OR PROPERTY
First-time homebuyers may be unaware of some of the hidden costs of home ownership. The costs associated with buying a home go beyond just the purchase price. When it comes to closing costs, it has been suggested that 1.5% to 4% of the purchase price should be budgeted for. Costs that are often overlooked when it comes to budgeting for one’s first home include:
- Property Transfer Tax (PTT)
- GST (on new homes)
- moving costs
- Legal or notary fees
- Home inspection fees
- New furniture and furnishings
- Renovation or repair costs upon move-in
STAYING WITHIN A REASONABLE BUDGET
Taking on a larger mortgage than you can handle by paying too much for a home can be regrettable and have long-term negative consequences. Purchasing a home is one thing. Maintaining and carrying it over a long period of time is a different matter. A home buyer should carefully approach a home purchase with an eye to being in the home on a sustainable financial footing. Sometimes, emotions can get the better of purchasers in hot markets where bidding wars breakout and/or the fear of missing out (FOMO) takes hold. Logic, and not solely emotion, must prevail when making the biggest purchase of your life! Again, this is where a buyer’s agent can help.
Be honest in making an assessment of your affordability threshold or budget. Genuinely take into account lifestyle factors that are important to you, such as dining out, traveling or taking weekend getaways. If you have kids, you need to consider costs like daycare or after-school programs. Are you a commuter? Then you need to factor in your fuel and other vehicle maintenance costs. In other words, take a global view of your finances. Your lender will give you a qualifying monthly payment. However, you need to think about what your preferred monthly payment will be so you can maintain other financial obligations. Also, try to leave some wiggle room in the event of an emergency. As with all things in life, BALANCE is important when it comes to how much home to buy.
I CAN HELP
Working with a professional like me from the outset of your home buying journey can certainly help you feel more prepared as you start working on this exciting milestone. I take the time to really get to know my clients and their housing needs and wants. I structure a process that makes researching, viewing and preparing offers on properties a breeze. I can answer your questions accurately and provide sound advice. Plus, I’m helpful in ensuring that your homebuying plans stay within a budget that works well for you and allows you to sleep easy at night, in your new home.