Venturing into the arena of buying a first home can seem overwhelming, filled with both obstacles and thrilling opportunities. The idea of owning your own home is certainly appealing, yet it's imperative to tackle this journey with careful consideration and well-informed choices.
So, how does one ensure they secure the best value for their hard-earned money?
To shed light on this pivotal question, we embarked on a mission, enlisting insights from 24 seasoned real estate agents.
Stay tuned to uncover the secrets to finding your dream home amidst the complexities of the real estate market.
What’s the Most Important Advice You Would Give to First Time Home Buyers?
These realtors shared with us their experience and referred to all the aspects mentioned above and more. You can read their opinions below.
In no particular order...
1. Donna Maguire - Donnamaguire.ca
Maguire emphasizes the importance of being aware of current market dynamics. With the Toronto market experiencing fluctuations, including a recent plateau in home values and increased inventory, buyers should stay informed about trends that could affect their purchasing power.
Ideally, you should see yourself staying in the city or town for at least the next few years. You want to start putting down some roots, investing in where you live and personalizing your living space.
Lastly, if buyers are close to making a purchase, Maguire suggests locking in mortgage rates to secure peace of mind. This strategy protects against potential rate increases while allowing access to lower rates if they decrease.
2. Joel Flewelling & David Dunn - Daviddunn.ca
When buying your first condo, the very first thing that needs to be done is to meet with a mortgage broker and find out how much mortgage payments you can afford.
Both Joel Flewelling and David Dunn emphasize the importance of preparation—financially and in terms of assembling a knowledgeable team—when navigating the home-buying process.
Additionally, it's important to have more than just the down payment saved up to cover closing costs, taxes, legal fees, and any necessary adjustments or extras for the new home.
3. Mariko Baerg - Bridgewell Real Estate Group
Baerg advises buyers to familiarize themselves with essential real estate terms, such as the difference between deposits and down payments, subject removal, and market value versus listing price.
She suggests that buyers perform thorough due diligence before making an offer, especially if considering a subject-free offer. This includes reviewing strata documents and conducting inspections beforehand.
4. Rebecca Kopel - RoyallePage.ca
Beyond the down payment, Kopel highlights the need to budget for additional costs such as closing fees, inspections, and moving expenses. Being financially prepared can prevent surprises during the buying process.
The real estate market can be unpredictable, so she advises buyers to remain flexible in their search criteria and timelines. Being open to different neighborhoods or property types can lead to better opportunities.
5. Jamie Blades - Homicity
When you get pre-approved with your mortgage payments, it will feel more than a milestone in the home-buying process especially for first-time home buyers. It is a necessary step they need to take before they start searching for a home for two reasons: to know how your home buying budget and to make the offer right away.
Knowing how much you can afford narrows down your search. With a pre-approval, you will not be tempted to ask for a larger mortgage loan if you find a property that has everything you want but the listing price range is out of your budget.
Once you get pre-approved, the mortgage sets the limits you need to find the right home at the best possible purchase price.
6. Michael Kelczewski - MichaelKelczewski.com
First and foremost, isolate a top list of factors ranked providing clarity throughout the home search. Oftentimes, many are left confused after touring many houses and being bombarded by information. I strongly suggest fully understanding the community as many seek comfort through neighborhood connections.
Start pounding pavement by attending open houses and researching neighborhoods. If possible, request a neighbor introduction while verifying commuting distances. Once an area becomes isolated, begin to consider must-have home features and amenities. Perhaps a large yard ideal for hosting or a morning room perfectly suited for long Sunday mornings ranks highly.
Creating a reference list decreases information overload and serves to familiarize oneself during property tours. Be prepared to move rapidly to purchase, so it's best to be fully financially approved as "the" home could easily be lost to competitors.
7. April Palomino - My Orlando Dream Home
I think of everything I could advise a first-time home buyer, the most important thing would be to get a home inspection. Home inspection is one of the most important steps in the home-buying process in my opinion. The cost is incurred by the buyer, but I find the information invaluable.
A Home inspector is a professional who is trained in examining the structures and major components of the home such as plumbing, the roof, and the electrical system. The report will cover the condition of these systems and any recommendations for repair or replacement that are needed.
For most people, purchasing a home is the largest investment that they make; you do not want any surprises, as they can be costly. As long as they asked for a home inspection contingency at the time they wrote the contract and followed the terms of the contract they can back out of the purchase should the inspection report uncover structural damage or issues with critical systems that would be too costly to the buyer to undertake.
8. Michael Zschunke - Berkshire Hathaway Home Services
My greatest piece of advice for first-time homebuyers is to... "Get your financing in order first and foremost." You'll not only want to know how much house you can afford with a Pre-Qualification but you'll also want a Pre-Authorization.
A PreQual only states what the bank thinks you can afford but a Pre-Authorization is more of a guarantee that you will be able to get the home loan. When making an offer this lets the seller know that you are more likely to be able to close the deal, therefore, making it more likely that they will accept your offer.
My second piece of advice is..."Don't get in over your head." Purchasing a home is the easy part financially for many first-time home buyers. Remember that a home comes with maintenance and other costs that can add up rather quickly for those on a limited budget. Being a homeowner means that you absolutely must have a rainy day fund for repairs, etc, when your furnace goes out in the middle of a cold winter night.
9. Randy Mintz - Mintz Home
Buying a home can seem complicated – but it’s not. There are fundamentals that first-time home buyers may not know – but only if they haven’t done any research.
Here’s my take:
- Get pre-qualified for a home loan before you go shopping. I’m a Millennial, so I can tell you that lots of young people, especially, think they can just saunter out and buy a house. But knowing how much the bank will lend you will be a major determinant. It’s ok to have an idea of what you want, but since most people can’t buy a cash home, that loan is going to be critical. It might as well be your first step.
- To get the best deals, use an agent. Agents have access to listings before anyone else. An experienced agent will also know the true value of a property – and whether the purchase price is on point or off base. They will be able to give a big picture assessment on a property – help you identify things like “deferred maintenance” items to watch out for (Will this beautiful home that you love need a new roof within the next 3 years. Not a reason not to buy it, but the factor that into your likely near-future costs.)
- It’s not all about the asking price. Many people don’t realize how many aspects of a sale can be negotiated. Can’t get your purchase price? Look for other points of negotiation that could have you walk away happy with a new home. It’s a big mistake to focus on purchase price alone.
10. Lauren Hazelett - Your North West Home
I think the biggest thing first-time home buyers need to know is the process. There are a lot of moving parts in a Real Estate transaction and it can be overwhelming. A good Realtor can help you manage your timeline and provide great referral partners, but half the first-time home buyers I work with have no idea what escrow is or why they are putting Earnest money to Title company XYZ other than their agent, Lauren Hazelett told them to. That takes a lot of blind trust. I rather prefer that they are informed about how all the steps to this project go together.
I think it's important to outline at a high level so as not to overwhelm everything in the process and who is involved.
- Pre-qualify - Mortgage Broker
- Shop - Real estate agent
- Offer/counter offer - both buying and selling Realtor
- In contrast - both Realtors and seller
- Inspections - Realtor/ Inspectors/ Specialist (Geo-tech, sewer scope ......)
- Closing - the party: Realtor, Mortgage, broker, escrow officer, and notary
Once you know the process, it becomes a lot more simple. I am not saying there is nothing else to know, but that's why you pick a good real estate agent. And why not, you're not paying for your agent, it usually comes from the seller's profits so get yourself the best agent you can, and have fun don't be discouraged and know the experience is different for everyone, every time.
11. Tania Matthews - TaniaMatthews.com
Make sure they do a consultation with their agent and work with them to find a strong mortgage lender to get pre-qualified.
That way, they can be educated understand the entire process, and know what they can or can't afford to purchase.
A mortgage lender can make or break a transaction and it's important to find a great one.
12. Mark Steele - Steele Coaching and Consulting
HGTV has influenced most of my clients to believe that the home-buying process should be done in three showings. If they see three homes and, by some chance, none of them work for their needs, we either have to choose one (because the TV says that one of these three is perfect) or cancel the process and wait to see another three in the future.
The truth is that the home-buying process can be long, and sometimes it should be. Time on the hunt can be reduced by the buyer being transparent and realistic about their needs; considering everything from proximity to work, children's school, entertainment, and most importantly, their budget. But not every home will be perfect, and often it takes seeing 5-10 to understand what the options are and make an educated decision.
On the topic of budget, I have had a lot of clients shy away from making renovations on their homes because of the HGTV-produced stigma that if you try to make a renovation, something will go wrong; there will be a family of rats and raccoons in the attic, or there will be mould behind the drywall.
While it is best to be cautious and budget additional time and money for setbacks, I have seen many renovations done seamlessly.
13. Eric Sztanyo - Team Sztanyo
There is a lot to consider as a first-time home buyer, and it can be completely overwhelming. You have to learn about the entire process, get approved for a loan, fight against other buyers in a competitive seller's market and so much more.
Because so much of it is unknown and unfamiliar, I would say the MOST IMPORTANT advice for a first-time home-buyer is to choose a real estate agent who is both knowledgeable and someone you would enjoy working with when buying your home.
Buying a home for the first time is an emotional roller coaster. Make sure you have the right professional along for the ride.
14. Earl White - House Heroes
Home buyers want to buy at a fair purchase price. There is a tendency for prospective homeowners to look only at the sale prices of comps. However, this sets the buyer up for purchasing in a declining neighborhood. Whenever looking at a comp, buyers need to look at the “days on the market”. Houses in the neighborhood sit on the market for a long time before selling, signals low appreciation potential (or worse, an incoming depreciation).
Additionally, home buying is a numbers game. You need to submit plenty of offers to find a good deal. That means offering on all suitable properties (even below the list price). It is common for properties to sell well below asking. Follow up once a month with the seller and re-iterate your interest rate. Soon or later, when the seller gets more reasonable, you will be one of the few buyers still paying attention.
15. James McGrath - Yoreevo
In my opinion, the most important thing many first-time home buyers overlook is taking a hard look and evaluating whether they should be buying in the first place.
A lot of people decide they should buy because they can now afford it, just got married or reached some other milestone. However, equally important is whether your home of today is likely to be your home of five years from now. If you might move, have a kid (or one too many kids) or anything else that would make your current living situation no longer suitable, you shouldn't buy - transaction costs are too high, not to mention the time it takes to buy a home.
Step one for any buyer is thinking through scenarios where they will be forced to move and deciding if it's the right time to buy.
16. Will Friedner - The Montana Life Realty
I believe there are two main things that a first-time home buyer needs to focus on before their purchase. The first thing they should do is sit down with a lender. A lender is going to tell the buyers exactly where they stand financially. If they want to buy a home with bad credit, the lender can help them with credit repair.
The lender will be able to tell them exactly how much they will qualify for on a mortgage. They will also go over the different types of loans and how much they will need to come up with for a down payment. Every first-time home buyer should have this information before they even start looking at homes.
Selecting a good agent is the second big thing that a first-time home buyer needs to focus on. A good agent can make or break a deal. First-time home buyers should take their time with this selection and be sure to interview several agents. They should make sure that their agent has sold homes in the area that they are looking for. The agent should have experience with the type of home that they are purchasing.
17. Cornelius Charles - Dream Home Property Solutions
The most important advice I would give to first-time home-buyers is to fully understand all of their financial obligations. Many home-buyers look for homes that are at the max of what they are pre-qualified for.
For example, if they are pre-qualified for $400,000, they look for homes that are priced close to $400,000. We like to tell first-time home-buyers that just because they are qualified for that amount, that doesn't necessarily mean that they can or should afford that amount.
Potential home-buyers need to look at all of their monthly expenses to see how big of a mortgage they can afford. A good indicator is to look at how much you are currently paying in rent and compare that to what your financial status would be with your new mortgage.
18. Keri Shull - KeriShull.com
Start with one of the funniest parts: List everything you need and want your new home to have.
List them in order of importance, starting with what you need and working your way down to the things that would be nice to have.
Maybe for your first home you won't be able to find that inground pool or pool-sized Jacuzzi you've always dreamed of, but maybe you can find those beautiful hardwood floors or that location that cuts your commute in half.
As you tour homes in your purchase price range, add to this list of wants and needs. Sometimes, you don't know what you want until you see it.
19. Daniela Andreevska - Mashvisor
Check out the price-to-rent ratio in your location's housing market. This is simply the average property price divided by the average annual rent in the market. If it's low (15 and below), it is financially sound to buy a home rather than rent a property. However, if the ratio is high (above 16 or especially anything above 21), it might make more sense to keep renting for the time being, as properties are just too expensive to buy at the moment.
While we are all attracted by the idea of buying and owning a home, you should make sure you can afford it. Ask yourself questions such as "Do I have the money for a down payment?", "How will I cover the monthly payments?".
20. Ralph DiBugnara - HomeQualified
First-time homebuyers don’t want to feel like novices in the real estate game.
Before you shop, know what you can spend. We recommend seeking a mortgage preapproval before looking at properties. Buyers need to know how much they qualify for and what their estimated monthly mortgage payment will be. Nothing is worse than finding your dream home only to then find it’s out of your purchase price range.
Be discerning in your search for representation. Ultimately, you are looking for an agent that specializes in helping buyers. In addition, you want this person to be familiar with the neighborhoods and home types you are searching for. There is no price for expert advice.
21. John Powell - Help-U-Sell Real Estate
Powell advises not to skip a proper home inspection with a professional inspector only to discover major problems with the home after moving in. Don't skim the governing documents of the community if restricted or a HOA.
On top of that, shop for the best loan program with the best fees and interest rate and work with an experienced realtor to help avoid all of these problems.
22. John Bodrozic - HomeZada
Many first-time home buyers have told us they should have prepared themselves for various aspects of home management, as there are myriad details to stay on top of when managing a home. A home can quickly become a money pit and many first-time homeowners are not organized or prepared to manage the details. Here are a few examples:
Every insurance company recommends this but most first-time homeowners forget. This is important because it helps make sure you are properly insured when comparing against your home insurance policy coverages, and if some natural disaster or other house fire were to destroy the home, you have all the digital information to prove your claim and get reimbursed.
It is important to get updates on what your house is worth (markets fluctuate), know your full mortgage schedule so you always know the remaining balance, and thus track your portion of the home equity.
You want your equity to grow both because hopefully the value of your house is growing because of the market, and your mortgage balance is shrinking as you make those monthly payments. It is also important to budget for regular household expenses like utility bills, property taxes, home insurance, and any other home-related expenses.
23. Thomas Kutzman - Prevu
You will need more than just a down payment when buying a home.
Your savings plan should also include the amount of money you’ll pay in additional closing costs, including mortgage fees, title insurance, property taxes, legal advice, and other transaction-related costs.
24. Craig Mracek - Keylo
Before you go to view your first home, have a list of deal breakers. If a house is missing any of these, walk away. This lowers the risk of an impulse buy on a new home that feels perfect but is missing something critical. Have a large family? A 1-bedroom condo is probably a deal breaker. This applies equally to the purchase price, especially with the closing costs attached. Set a purchase price ceiling where you walk away in case you end up in a bidding war.
This helps take the emotion out of the process and keeps you in control.
Pay for a professional home inspection and don’t waste your time worrying about what’s in the walls since you don’t have the skill to accurately identify problems. Should you keep an eye out for obvious signs of neglect and poor maintenance? Of course. Otherwise, leave the inspections to the professionals [2].
From Questions to Clarity: Wrapping Up Your Path to Homeownership
Thanks so much to all the realtors who shared with us their advice for first-time home buyers! Hope now you know what you have to do and it will be easier and less stressful to search for your dream home.
If you are searching for a condo in Toronto (or anywhere else in Canada), check out our offers. Contact us for more details, and we will be happy to help you find your new home.
References:
- https://www.cmhc-schl.gc.ca/en/buying/condominium-buyers-guide/chapter-4-buying-a-condominium
- https://globalnews.ca/news/2576822/hiring-a-home-inspector-here-are-6-things-to-remember/
