We are a few weeks into 2018 now, and I have already been contacted by a few new clients who have made it their goal to make their first home purchase in 2018. This is certainly a big step, and they have expressed a lot of confusion about the process, as well as many questions about the path they should take to accomplish this goal. I have therefore thought this the perfect topic for our first blog post of the year!
First things first - contact a realtor! Don’t necessarily settle on the first one you speak to either. Reach out to a few. Meet with them. Have a conversation with them. Discuss your goals, and how they feel they can help you achieve them. If you don’t feel a rapport with them, they may not be the agent for you! If you aren’t able to develop that rapport, develop a certain level of trust and faith in them, you are going to add a lot of stress to the process, and it will take much of the enjoyment and excitement out of what should be one of the most exciting times of your life!
You realtor will also be able to offer advice on each of the next steps, so keep him or her in the loop!
Once you have selected a realtor, it’s time to figure out what you can afford. Your realtor will be able to recommend a mortgage professional to you. I recommend meeting with 2 different ones – the first from the bank you do the majority of your banking with; the second with an independent mortgage broker. Banks only lend their own money. A mortgage broker will have access to a plethora of lenders. Some banks and lenders are more conservative than others in lending money. There are advantages to having your mortgage at the same institution s the rest of your accounts. A mortgage broker essentially “shop you around” to various lenders, and present you with the best offers made to you. You realtor can be a sounding board for this, and help guide you in making the decision that best suits your goals.
Once you have been pre-qualified by a mortgage professional, don’t necessarily rush in to buy something for that price! Be honest with yourself about your lifestyle and your spending habits. How many times do you eat out in a month? How much do you spend on entertainment? Clothing? These discretionary expenses will affect how much you can actually afford, and wouldn’t necessarily be used in the calculations with the mortgage professional. A common mistake made by first time home buyers is they go out and buy the most expensive house they can qualify for, but then can’t afford any of the other things they want to enjoy.
Now, the actual house hunting can begin! Your realtor will help you determine the criteria for you search based on price, number of bedrooms, etc…, and search the MLS database for homes that match those criteria. I recommend for a first round of viewings to set up between 4 and 6 homes to take a look at. I always try to not choose 2 homes that are too similar to each other. I then encourage my clients to be very critical and vocal about what they like about each home, as well as what their dislikes are. Information is power! The more information I am given, the easier it will be for me to hone in on the perfect house! Don’t worry about insulting me… It’s not my house! You are entitled to you opinion on the home.
After the first viewing, I often find that first time buyers come to the realization that they cannot get everything they want in their first home. At this point, it is good to start considering which attributes in your first home are most important to you. Rarely are you able to find the perfect house for your first home… I am not saying you necessarily have to settle, but rather are there certain aspects you can live without, or make changes to down the line to make it your own… Things like paint and flooring are easily changed, whereas a floor plan is not easily changed.
As the hunt continues, I find that as I get more and more feedback from my client, and as the process goes on, there is a shift from the client suggesting houses they are interested in viewing to me suggesting houses to go out and view.
Eventually, sometimes more quickly than others, you will walk in to a house and absolutely fall in love! I like to say to my clients that it hits you square in the face! You just know as you are walking through the house that this is where you want to call home! Trust that instinct!
It’s now time for the offer! At this point, your realtor will take over! But this is a topic for another post…
Until next time!
John E. Smith Realty Sudbury Limited Brokerage
353 Lorne street
Sudbury, Ontario P3C 4R1