In this age of bidding wars and tightened mortgage rules first-time home buyers have a lot to learn when buying in Toronto. This is not an easy market to handle for a anyone, so the more you know, the better your decisions will be. As a real estate agent, I’m approached by many first-time buyers ready to make the leap into home ownership but find the process somewhat daunting. Whether you’re buying a condo or a house, it’s undoubtedly the biggest purchase you’ll ever make, and there are a few steps you can take to get it right the first time.
Get Pre-Approved – Getting pre-approval for a mortgage is the very first step in the process of buying your first home to avoid disappointment and surprises. After all, how can you know what to look for if you don’t know what you can afford. That’s like shopping for a pair of Louboutins on a NineWest budget…sorry, shoe metaphor is always the first one that comes to mind. Pre-approval should be in writing and will usually guarantee the interest rate for 90 to 120 days, so if rates suddenly increase, you’re protected.
Know Your Real Budget – This ties into the step above with a few differences. When you pre-qualify for a mortgage, your lender looks at your income, your debts, your downpayment and your credit history. It does NOT consider your lifestyle, so added monthly costs like your cell phone bill, gym membership, sport and social groups, clothing and entertainment must be considered so you don’t live paycheck to paycheck. No body likes being house-poor.
Location – The neighbourhood is a big factor in the price. You may be limited to both the location and the type of property depending on your budget, so consider what’s important to you and go from there. Take a drive or walk through some of the neighbourhoods, look for grocery stores, schools, parks. Visit a restaurant or a cafe – what’s the vibe like? Also remember, everything looks better in the daytime, so visit the neighbourhood at various times of day. Your real estate agent should be able to provide input in terms of the neighbourhood based on your wants and needs…and your budget, of course.
Make a Wish List – Know your wants and needs, and remember that you may not always get what you want, but you’ll get what you need…don’t worry, I won’t break into a song. So ask yourself – house or condo? 1 bedroom, 1 bedroom + den, 2, 3 etc? what about counters, floors, appliances? do you need parking? what about storage? outdoor space? Remember, don’t get too hung up on the wants. It’s easy to be charmed but the shiny new finishes, but counter tops can be replaced – location, never.
Pick Your Team – Buying your first place may be intimidating but you don’t have to do it alone. Find a great real estate agent who will work exclusively for you and can guide you through the buying process. You will also need to find a lender to help you through the financial part of the process, and a lawyer who will help you with the legal aspects of the purchase. There are thousands of professionals out there, so do your research and ask your friends and family for recommendations.
There is a lot to know when buying a house or a condo in Toronto, but if you start with these five steps you’re well ahead of the game. And if at some point you feel confused or unsure, don’t be afraid to ask questions. Remember it’s not your job to know it all. That’s what your Team is for. I’ll be honest, the mortgage and financing part of the process can seem long and tedious, but the rest of it is a lot of fun!