You’re thinking about buying your first home. Congratulations! Buying a home can be an extremely exciting experience but the process can also be a little daunting. Becoming a homeowner is one of the biggest financial decisions you’ll ever have to make and you’re likely to have lots of questions. Sandra Rinomato, real estate pro for HGTV’s Great Home Giveaway had these five tips to share with first-time home buyers:
1. Do your homework. Before you start looking, sit down with your hubby-to-be and decide on an approximate location or neighbourhood where you would like to settle down. Also determine your budget; get pre-qualified for a mortgage and figure out what you are comfortable paying each month.
2. Seize the moment. Look at your current lifestyle as a newlywed couple and determine your needs and future plans. If you don’t plan on starting a family right away, a two-bedroom condo might be a more realistic, reasonable purchase than a three-bedroom house.
3. Stock your piggy bank. You will need 2% of the purchase price to cover additional expenses such as land transfer taxes and lawyers’ fees. Also, be sure that you have a deposit for the home on top of the down payment. The deposit is usually 5% of the purchase, and it needs to be in the form of a certified cheque or cash. The remaining down payment will be paid on your closing day.
4. Consider your RRSPs. Using RRSPs for your down payment is a good way to use the money without any tax implications. But beware that it takes time to release these funds, so get the ball rolling a couple of weeks in advance.
5. Find your perfect realtor. Make sure to use a registered realtor and sign a Buyer Representation Agreement. This will ensure that you’ll be treated as a client rather than a customer. Include a short time frame in the agreement, so you can decide whether or not you work well together. By signing this agreement, you aren’t obliged to buy a house from your realtor; this is merely a contract stating that you will use his or her services.
