First-Time Home Buyer Tips That Actually Make A Difference
Crazy isn't it?! My partner and I bought our first home and we are very excited! I will be writing this post throughout my whole home-buying experience because it was a very steep learning curve for us when we first started this process and I'd love for this to be a post that first-time home buyers can read, to understand and make the whole process easier! The amount of new words that are in my vocabulary from this process is astounding, so prepare yourselves.
So you realize you want to buy a house, that's exciting! What now?
This post is about first time home buyer tips.
Step 1: Find Yourself a Realtor.
This sounds easy and simple, and it can be but it's extremely important that you find a realtor that you work well with and who will cater to your needs and fight for you as their client. I decided to do a quick search on Instagram (knowing me, this isn't a surprise) and since I live in Calgary I typed in "YYC Realtor" and scrolled through a few until I landed on a woman named Zoe Saracini. I went through her profile and saw she is a little bit younger, but also has tons of experience working with first time homebuyers. I also saw she works with a team of a few other men who looked very experienced as well. Zoe is with The Neustaedter Team and I got super lucky finding her so quickly! My partner and I met with her to look at some houses and we knew instantly that she was the perfect realtor for us; she was kind, assertive, honest and a workaholic! Other ways to find a realtor in your area is doing a quick google search as well. Even if you haven't looked at any houses yet, a realtor is great to have because they will send you places that fit your wants/needs, price range, etc.
Step 2: Look at Places
This is the fun part! Your realtor will schedule time slots so that you can go see the places that you've liked the most so far in your house-hunting journey. The more places you see, the more you will know what you want/don't want in a place! Also, it's important to note that the pictures online of a house and how the house actually looks/feels can be completely different things. In my own experience, we fell in love with the first place we saw and ended up putting an offer in on it, so the house-hunting experience is different for everyone.
In our own experiences in house-hunting, I was looking online for places for months and months before we actually got a realtor and so we knew pretty much exactly what we wanted in our first home. The first place we saw was the house we ended up putting an offer in on; it was the perfect layout and the bedrooms were big enough and the area was perfect. It was one of those feelings that I could see myself and my partner living there, getting coffee in the morning, eating dinner, watching our favourite tv shows in the living room, etc. The second place we looked at was a couple houses over, and a very similar layout but the vibe in the house felt very cold and like death (gosh I hope the owners of that house aren't reading this lol!). The walls were dark grey, the kitchen counters were a black granite and the cabinets in the kitchen were white and it felt very not-homy. The third place we looked at was in the next neighbourhood over (also a very nice location) and it had a huge basement! But, when we walked into the townhome, you walked into the living room/kitchen and it felt very cramped. There was also a ton of carpet that wasn't very well maintained and it had no garage. So, this one was a hard no as well. We got home and both couldn't stop thinking about that place and we started looking at the pictures again and started getting excited so we decided to put an offer in.
Step 3: Putting in an Offer
I'm not going to discuss the price of our townhome, because I'd like to keep some aspects of my home buying experiences private. But I will go through what happened in as detailed as I can be. So after we put in our initial offer, the seller came back and split the difference between the asking price and our offer and they told us that was their final offer. When they say "final offer" it basically means that is the lowest they will go or they are done dealing with you. Since the offer was more than fair, and less than what we were expecting to get, we accepted that.
When putting in an offer, it's important you consult with your realtor and also anyone around you that has experience with buying their first home (parents, friends, other family members, etc.). This part of the process wasn't stressful at all surprisingly, I think this was because everyone was all in line with each other about what we should offer, so this was considered an easy part too (but also a very exciting and surreal part for a first-time home buyer!). When we were putting in our first offer, our realtor Zoe, met us at Starbucks and went through every single document with us to make sure we understood everything before moving forward.
Step 4: Removing Subjects
Once you have an accepted over, you usually have about 7-10 business days to remove your subjects/conditions. These were our subjects and the costs associated with each:
- Subject to financing: being approved for a mortgage - you will need a mortgage broker/specialist for this (I'll go over this in detail below)
- Subject to condo document review: going through the documents of the condo board to make sure they are accurately budgeting and the condo board isn't in debt or else your monthly condo fee could go up significantly while you're living there. We hired a team to do this for us since this was our first time and didn't want to miss anything. ($500)
- Subject to inspection: we hired someone to go through the house in detail to make sure everything was working properly and in order so we basically knew what we were buying (e.g., water in the walls). We hired Kyle at Samson Inspections (realtor recommendation and he did such a great job explaining everything to us; we even got a binder of things he was expecting and home ownership responsibilities as well. ($350)
IMPORTANT NOTE: be prepared to put down about 2% of the purchase price right away when there is an accepted offer. If there ends up being a problem and you can't remove your conditions/subjects, you will get that money back. The only way you would lose this money is if you decided you didn't want the house during the time after you removed your conditions/subjects and when you sign the papers with the notary/lawyer. It's basically a trust; our realtor mentioned to us that many first time home buyers don't know about this step, so I thought I'd mention it so you're prepared!
Picking a Mortgage Broker/Specialist
This was probably the most stressful part of the whole process thus far for us, but it seriously doesn't have to be. I'm going to try to explain this as simply as possible. So, we wanted to go with a 5 year fixed mortgage/interest rate because the mortgage rates are so low right now due to Covid-19 (you want the lowest possible rate). My realtor referred as to a mortgage broker that she works with and he was super helpful in educating us about the different types of 5-year mortgages:
- Bank Mortgage (e.g., RBC)
- Mortgage Lender: any lender that isn't a bank (e.g., credit union)
- Restricted Mortgage Option (don't recommend this because you'll have a lot less flexibility)
We have a family friend who works at RBC as a mortgage specialist, but we weren't sure if going with a bank was the best route so we asked this mortgage broker lots of questions. The two main things we were considering was the payout penalty and amount extra we can put down on our mortgage per year. In the end we went with our family friend from RBC. She asked us for a bunch of different documents she needed to submit in order to see if we could get approved for financing. After she submitted everything it took about 3 business days and we found out we were approved!
Step 5: Meeting With Your Lawyer
This part seemed a little daunting to me since I've never had to work with a lawyer before, but our realtor, Zoe, helped us with exactly what to say and gave us great lawyers she recommended for us. From the beginning, we expected to pay about $1500 in lawyer fees throughout this process. This part of the home-buying process was the easiest since your lender and realtor will send over everything the lawyers will need from them. Once the lawyers went through the documents, they let us know that we can book an appointment with them to sign all of our papers and bring in a bank draft with the rest of the money we owe for our down payment along with your lawyer fees.
The appointment with your lawyer takes about an hour and you will sit down and sign a bunch of papers which they will (should) explain to you. Don’t be afraid to ask questions here if you don’t understand something!
Step 6: Pre-Possession Walkthrough
We scheduled our pre-possession walkthrough the day before we took possession for our new house per our realtor's advice. It’s important to check and make sure everything is working properly and is in reasonable condition from how when you bought it. It’s important to check all of the outlets out to make sure they work (bring a phone charger), turn on all the appliances and make the furnace kicks in. The walkthrough may take about 30-45 minutes and should (hopefully) be quick and sweet!
Step 7: Taking Possession of your New Home
Taking possession of your house is probably one of the most exciting feelings ever, especially for a first time home buyer. Even though things may be chaotic with moving, try to stop and enjoy these moments. Buying your first home is an incredible accomplishment and moving into the house makes this finally feel real!
There was so much I learned going through the process of purchasing a home and I hope this blog post has helped anyone going through this process now or anyone planning to in the near future! If you have any questions about this process that I didn’t cover, shoot me a message, I’d love to chat!