You’re a first time home buyer. You’ve been saving and scrimping for your down payment. You’ve been following the local market.
Buying your first home is a huge expense. You want to take every step to ensure it’s also a good investment.
1. Plan for the future
Real estate shouldn’t be an impulse purchase. You’re in this for the long haul. That means you have to factor in all the costs of your new acquisition, including repairs or renovations you want to do to make your new place your own. If you’re planning to have a family, or expand your family, you’ll also need room to grow.
2. Think of the investment potential
As much as you’re buying a home, you’re also making an investment. Recognize the financial potential of your new home. Buying something cheaper that needs work could realize a bigger return on your investment later on. If you’re shopping for a condo, two-bedrooms have more desirable resale potential than one-bedroom units in most cases.
3. Get a feel for the market
Real estate values fluctuate all the time. As first time home buyer you should spend a few months researching the local market to get a better idea of what you should be paying. Look at a variety of properties, including ones you’re not actually considering.
4. Consider old and new properties
New properties can be tempting to a first time home buyer. They come with fewer surprises. They tend to be cheaper to maintain. But an older property that might be in need of some renovation can be a better buy and have more potential as a long-term investment.
5. First time home buyer should be flexible
Try to look beyond your first impression of a property. Recognize the potential of properties you might not normally consider. Not having any luck in your desired location? Consider widening your search area a bit.
6. Know what you can afford
Getting a mortgage means you’re committing yourself to monthly payments for up to 25 years. If you’re getting a condo, you’ll also have to budget for maintenance fees. Make sure your bank account can handle those stresses, as well as plenty of extra cash for repairs and furniture.
7. Check the surroundings
You’re not just buying a home, you’re buying into a community. Get a feel for the area by spending time there, checking out amenities like shopping, schools, parks, entertainment options, even places to work.
8. Secure financing
Get pre-approved for a mortgage. That way you’ll have a good idea of how much you can spend and you’ll be able to make an offer on a property with confidence.
9. Hire a home inspector
Home inspectors work with the buyer to ensure they’re making a wise purchase decision. They’ll thoroughly survey a property for maintenance issues, possible repairs, health and safety hazards.
10. Factor in additional costs
There’s more to buying a home than just the final price of the property. There’s also legal fees, insurance as well as the cost of any repairs or renovations the property needs.
A first time home buyer should never rush into buying a home. Account for every cost. Take the time to ensure your finances are in order and they can sustain your purchase and your lifestyle. If you’re comfortable with how everything aligns, then you’ll be able to proceed with the biggest investment of your life with confidence.
More helpful tips: 10 due diligence steps when buying a home in BC