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7 Tips For First-Time Home Buyers In Calgary

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Buying a house for the first time can be overwhelming to say the least. If you’re wondering what neighbourhood to go with, what you can afford, or even how to just get started on the process, let us take some stress off your hands! We’ve teamed up with Hopewell Residential to give you 7 tips to ensure the home you end up with is everything you dreamed of.

Hopewell Residential is a five-time Developer of the Year award winner, so their expertise is second-to-none in Calgary and beyond. Who better to learn home-buying tips from than the homebuilders themselves?

Create a checklist of needs & wants

This is a biggie. When you’re buying your very first home, you’ll want to weigh your needs vs. your wants. Ensuring you have what you love in your first home is a big, big deal.

What should you do? Easy. Set up a list of needs and a list of wants, but be pretty strict with yourself, and make sure you take your lifestyle into consideration. With the increase in remote work over the past year, it’s important to keep in mind that a home office or flex room might just be the key to maximizing at home happiness. Especially if you’re thinking you might be expanding your family later on, spare rooms and extra space is key (but more on that later!).

Or for instance, you might need a home in an area with a high walkability score, but you want to be close to certain amenities. Set yourself up with the right level of compromise and the number of homes that actually fit your ‘perfect’ idea will skyrocket.

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‘Don’t give up’: Ottawa Valley realtors share statistics, tips for homebuyers in ‘extreme’ sellers market

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The real estate market in the Ottawa Valley can be summed up this way: people from far and wide are in a buying frenzy, but there’s hardly anything to buy at the “store,” and the limited inventory is overpriced.

This “stampede” — as one realtor described it — will affect rural towns as residents grapple with finding affordable housing and agonize over their inability to purchase homes in their price range.

“We are seeing a lack of inventory in all price ranges,” said Laura Keller, a real estate agent from Carleton Place.

Helen Vincent, a Renfrew realtor, said she’s never seen a market like this in her 36 years of practice. “We postpone offers for four to five days in order to get all the buyers,” she said.

Multiple offers — between seven and 10 — became the norm, with cash offers and no conditions, as buyers faced bidding wars. “In Ottawa, they have up to 50 (offers),” she added.

“It’s very stressful. You’re going to get nine (people) ticked off, and one happy. So many people are disappointed,” Vincent said.

Terry Stavenow, an Arnprior realtor for 40 years, said that “the pent-up need took over with inventory going low. It made a stampede on everything that was available.“

“Brand new housing — it’s very much gone. Several building developers are rushing to get inventory. They usually don’t do construction in the winter months,” said Stavenow.

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10 Tips For First-Time Home Buyers

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Buying a home for the first time is exciting and a commitment to the future. It’s often challenging, too, and the process requires a lot of steps, many of which can be tricky to navigate as a first-time home buyer.

What are some things you should keep in mind as a first-time home buyer?

First-Time Home Buyer Tips

Here are 10 tips to keep in mind as you begin your journey toward homeownership.

1. Have Your Finances in Order

It’s wise to begin saving as early as possible once you’ve made the decision to purchase a house. You’ll need to consider the down payment, closing costs (which often range from 2% to 5% of the down payment), as well as move-in expenses.

You also need to understand the other costs of homeownership, such as mortgage insurance. property taxes, utilities, homeowner’s insurance, and more.

2. How Much Can You Afford?

Knowing how much you can realistically afford in a home is another important financial consideration. Look for the home of your dreams that fits your budget.

One way to avoid future financial stress is to set a price range for your home that fits your budget, and then staying within that range. Going through the preapproval process will help you understand what price range is realistic for your budget.

3. Make Sure Your Credit is Good

Another thing to keep in mind as a first-time home buyer is your credit score because it determines whether you qualify for a mortgage and affects the interest rate that lenders offer. 

You can check your credit score from the three credit bureaus – Experian, Equifax, and TransUnion.

This is another good reason for getting preapproved before you start your search. Learn more about the preapproval process and your credit score.

4. Choose The Right Real Estate Agent

A good real estate agent guides you through the process every step of the way. He or she will help you find a home that fits your needs, help you through the financial processes, and help ease any first-time buyer anxiety you may have.

Interview several agents and request references.

5. Research Mortgage Options

A variety of mortgages are available, including conventional mortgages – which are guaranteed by the government – FHA loans, USDA loans, and VA loans (for veterans).

You’ll also have options regarding the mortgage term. A 30-year fixed-rate mortgage is popular among many homebuyers and has an interest rate that doesn’t change over the course of the loan. A 15-year loan usually has a lower interest rate but monthly payments are larger.

6. Talk to Multiple Lenders

It’s worth your time to talk to several lenders and banks before you accept a mortgage offer. The more you shop around, the better deal you’re liable to get – and it may save you thousands of dollars.

7. Get Preapproved First

Getting a mortgage preapproval (in the form of a letter) before you begin hunting for homes is something else to put on your checklist. A lender’s preapproval letter states exactly how much loan money you can get.

Learn more about the preapproval process and how preapproval provides you with a significant competitive advantage in our article How Preapproval Gives You Home Buying Power.

8. Pick the Right House and Neighborhood

Make sure to weigh the pros and cons of the different types of homes based on your budget, lifestyle, etc. Would a condominium or townhome fit your needs better than a house? What type of neighborhood appeals to you?

9. List Your Needs and Must-Haves

The home you purchase should have as many of the features you prefer as possible. List your needs in order of priority; some things may be non-negotiable to you personally.

10. Hire an Inspector

Hiring an inspector is another crucial step in the home buying process. An inspector will tell you about existing or potential problems with the home, and also what’s in good order. You can learn more about home inspections and how to find a home inspector through the American Society of Home Inspectors website.

Buying a home for the first time is a challenge, but it’s one you can handle with the right planning and preparation.

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First-Time Homebuyer Mistakes

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To ensure a smooth and successful experience, there are a few common first-time homebuyer mistakes to avoid:

1. Not Using a Real Estate Agent

While you might be able to house hunt on your own, there are many aspects of buying real estate that can be confusing to first-time shoppers. A real estate agent provides an essential service that you can rely on for negotiating offers, organizing inspections and other details. A good realtors experience is valuable and can help guide you through the process. In addition, whatever money you might save on commissions could easily be spent on a botched offer or overlooked repairs that could be avoided with the help of an agent.

2. Not Using the RIGHT Real Estate Agent

Not using a real estate agent has its issues, but so cannot using the RIGHT real estate agent. You don’t want to be halfway through your home search and then realize your real estate agent isn’t right for you. To avoid this, it helps to get a referral from a friend. If you don’t have any friends who recently purchased, take the time to ask around. Mortgage professionals are great resources to help you build your entire home buying A-Team! Also be sure to speak with your potential choices before you commit.

3. Getting Swept Away

While love at first sight is a good thing, it is always best to err on the side of caution when purchasing a new home. As one of the largest purchases of your life, it is ideal to keep an open mind when house hunting to ensure you are not jumping in too fast, going over budget or ignoring potential pitfalls.

4. Going Over Budget

When it comes to house hunting, budget is everything! As much as you might love the idea of that extra bedroom or a popular neighborhood, it is in the best interest of your future not to go over your predetermined budget. You don’t want to sacrifice your retirement savings or emergency fund and overextending yourself could put your investments – including your home – on the line. Click here to download the My Mortgage Toolbox app (or find it on Google Play and the iStore) today to help you plan your mortgage! From determining your affordability, mortgage payments, income required to qualify and more, our app has it all!

5. Fixating on Lowest Interest Rate

While a low interest rate has its perks and can be important, it should not come at the expense of heavy penalties or restrictions. When it comes to a mortgage everything from terms to penalty calculations to interest rates matter. Ideally, you want to choose a mortgage product that has the best overall contract to serve your needs – now and in the future. To ensure you are making the best decision, talk to a Dominion Lending Centres mortgage professional about all your options today.

6. Opting Out of Mortgage Insurance

Buying your first home is easily one of the largest investments you will ever make. Mortgage insurance can help you protect it. Not only does it provide you with peace of mind and coverage should anything happen, but mortgage insurance can also allow for more flexible financing options. In addition, it gives you the opportunity to take advantage of available equity to pay debts or make financial investments.

7. Not Researching the Neighborhood

The house of your dreams can only go so far if it is in the wrong neighborhood. Annoying neighbors or a nearby industrial zone can ruin that perfect home. Before committing, it is a good idea to get to know the area and the neighborhood before you make an offer. Talk to local business owners and residents to determine if there are any red flags you should know about.

8. Not Researching Your Lawyer or Notary

At the beginning we talk about not using the RIGHT real estate agent and mortgage professional. However, it is important to ensure that you are putting that same energy into finding the right lawyer or notary as well. Same as with finding a real estate agent, your best referral sources for a lawyer will be friends and business associates. Your DLC mortgage professional may also have some references or suggestions if you are not sure where to start.

9. Choosing a Fixer-Upper Based on List Price

A fixer-upper can be a great project – and of course a low price is appealing – but it is important to be extra diligent during inspections and considerations for these types of homes. On the surface, it might look simple enough to get the home up to code and give it a fresh new look but once you get started, it could be a bigger project than you anticipated. Negotiating a long due-diligence period can be a great option to provide you time to get estimates from contractors in case you need to back out.

10. Immediately Starting Renovations

Renovations can be fun and can often increase the value of your home, but there is no need to rush into them. In many cases, overextending your credit to get upgrades done quickly doesn’t always pay off. Before doing renovations, take time to ensure that you have a solid plan and understand the financial expectations so you can complete and enjoy your renovations without future stress! Living in your home for a while before renovating will also help you plan the best functional changes to the layout. If you are new to homeownership, don’t worry! Our Dominion Lending Centres mortgage professionals can help walk you through every step of the process and provide helpful insights and potential referrals to help you build your home buying team.

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