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Tips for Canadian First Home Buyers – Top 10 Picks

Posted on 27. Jan, 2010 by Admin in Lifestyle, Social

Tags: House, Real Estate, Social

Statistics show that more than half of the Canadians, who purchase a new home are “first time home buyers”. These are people who newly form a family or those who have been renting for sometime, and decide to opt for purchasing a new house. Many first homebuyers, however, are quite unfamiliar with the process of purchasing a house.

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I, too, was recently among the first time Canadian homebuyers.

In this article I will, from my experience, try to point out the top 10 important points to keep in mind when buying a home in Canada.

1. Determining Your Home Budget and Down-payment

Look into your pocket! See how much cash you can afford for your down payment. Your down payment should be at least 5% of the house price, although it is recommended to come up with 20% of the house price, in order to avoid the CMHC (Canadian Mortgage and Housing Corporation) insurance costs added to your mortgage.

2. Put Aside additional $8k

There are a number of additional costs that could and will come along the way when purchasing a new home. These vary according to the province and the city of residence and the price of the house of your interest. However, you should budget for, approximately an additional $8,000 over your down-payment..

This money should be put aside for costs such as; lawyer, inspector and land transfer fees an possible minor repairs of the house.

3. Mortgage Pre-approval: See a Bank for

Having your finances assessed and an amount of mortgage pre-approved is an important step. You should get pre-approved for a mortgage amount before looking for the houses of your ineterst.

The amount of mortgage, which any bank would be willing to lend you, is the determining factor for the type of house you would be able to afford.

See here for mortgage rates:

4. Consider Property Tax

Once you have calculated the amount you can afford for your home and know the amount your mortgage pre-approval, you should look into the property tax at different locations. For example, property tax in Ontario, Canada could vary somewhere between 2000 to $4000, for a mid size house.

Do your research and add an estimated monthly cost of your property tax to your monthly mortgage payment.

5. Pick a Trustworthy Realtor

A Realtor whom you can trusted is a blessing. I personally went someone who my family had dealt with previously, and they were relatively satisfied with him.

Your realtor will have to know everything about your finances and your house needs, having someone you can be open with and trust is very important.

Moreover, he will do the offers and bargaining on your behalf when the time for picking a home of your interest comes. Here you want to trust that he will not compromise on the price of the house or bargaining solely for his/her commission.

Remember, if you are not comfortable with your realtor or real estate agent , do not be afraid to change.

6. Do Not be Deceived by Furniture and Decoration

When looking at homes, try and do your best to picture each house without all its furniture, without decoration and that wall colour. Remember that the furniture will go and the walls will be most likely re-painted according to your likes Look carefully at the layout, its appliances, and its neighbourhood.

7. Prepare a Checklist to Rate Each House

It is always a good idea to prepare a list of important criteria, which you expect for your future house and jot down or rate each house accordingly. This will greatly help you remember the details, lets you see past house decoration as well as simplifying your final decision.

Your list could be similar to the following

What is the visible condition of the exterior and interrior?
What are the visible conditions of the neighbours’ homes?
Is the area mostly consisted of townhouses, semis or single homes?
Do the neighbours take care of their lawn ?
What are the permanent and architectural features, like crown-moulding or California shutters.
How is the size of the lot?
How close is the house to shopping and schools?
What kinds of services are closely available?

8. Do Not Fall into Biding Wars

After seeing each house, determine the amount you would like to buy the house as well as the maximum amount you would pay for it. Once you start bidding for each house, avoid going over you top price and keep your bids below it.

This will help you manage your bids and help you avoid falling into bidding wars.

9. Once Closed, Do Not Regret: Stop Looking at Homes

After all is set and done,  avoid looking at the ads and real estate websites as you have been doing for sometime. It is almost inevitable that you will find something better; there is no end to that.

10. Enjoy Your New Home

Come out of your buyer’s shoes and be a “home owner”: enjoy your new home!

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