What To Do if You’re a First Time Home Buyer
The following are points that a first time home buyer should definitely consider before starting their search.
Especially when it’s a sellers market. The last thing you want is to put a bid on a property, get emotionally attached and three days later find out that you’re not approved and the deal collapses. In a very competitive market such as the lower mainland, many realtors will ask if you’re pre-approved to ensure that the deal that they’re about to submit/ accept is a solid offer. Otherwise, it’ll tint their reputation and the home will be back on the market because someone didn’t do their due diligence. It’s always better to be safe than sorry.
Note that your credit is just one of three factors that will be considered before you do become approved for a mortgage. The other two are your income and your down payment. For a first time hone buyer, a 20% down payments (especially in Vancouver) is very rare but that’s how much down you have to pay to avoid paying CMHC’s mortgage default insurance which is calculated based on the size of your mortgage and how much down you have.
Since there is a decline of listings on the market compared to years before and an increase in demand, it’s hard to find the perfect home and if you do, you might be competing with many others. So when you are looking for a home always look at the bigger picture. For example, when viewing the living room, don’t just look at how it is right now, rather envision it with your particular furniture, choice of paint color, additional improvements etc and then make your judgment.
Some buyers will just cross out a home due to too much furniture which makes the home “look small” or if it has an old paint job or old carpets. These can all be improved in the future, ideally you should be looking at the space as a whole.
It’s a transaction. And in this case, it could be your biggest transaction in your life so far. Therefore, make it a business decision and don’t get too emotionally attached to a particular home. Otherwise you might overvalue the home and when it comes the time to sell you’ll realize you definitely did overpay for the home even after looking at direct comparables
Remember that you’ll need to also save up for closing costs for your transaction to go through. CMHC recommends putting aside anywhere from 1.5 – 4% of the purchase price to ensure that you’ll be able to cover them. A realtor will be able to dissect exactly that other costs you may endure as a result of a purchase.
Are you a first-time home buyer looking to make one of the largest transactions of your life? Feel free to contact me and I can help.
Farris Kapani, Coldwell Banker Prestige Realty
778 223 1780
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