What You Need to Know About Purchasing Your First Home
Last updated on December 23rd, 2021 at 01:27 pm
With a market as hot as Ottawa’s right now, homebuyers need to be ready for multiple offers and higher prices. But don’t let that deter you. There’s a lot of opportunity still out there for first-time homebuyers. Learn how you can increase your chances of finding a home you love and winning the bidding war when purchasing your first home.
Important Steps Towards Home Ownership
Start by Getting a Pre-approval
The biggest advantage you can have when going into a bidding war is to have a pre-approval for financing. This document can be obtained by speaking with a mortgage agent or your local bank branch. It’s not a guarantee for funding, but it will provide you with valuable insight into how much you can afford to purchase, and what your payments would be.
Knowing how much you can afford can really help your real estate agent figure out the properties in which you will have more negotiating power and how far over asking you can go without stretching yourself too thin. This document also tells the seller that your finances have been vetted and that there will be less risk of the deal going south before closing.
Know What You Want
When people lose a few bids, they become tired and frustrated with the process. This often leads to buyers submitting offers on properties they would have never considered beforehand, and at prices that are much higher than their budget. On the flip side, some buyers are not willing to be flexible at all, leaving them with few options and a multitude of disappointments. In a seller’s market, it’s essential to have a nice balance between the two.
That’s why it’s a good idea to make a list of all the things you absolutely cannot live without and some of the things you’re willing to sacrifice. For instance, you might not be willing to budge on the location, but you might be willing to sacrifice on square footage. Remember that your first home doesn’t have to be your forever home. Once you’ve built up equity you will have more options available to you.
Consider Location Flexibility
Since location is a huge part of your homeownership, it is something that few tend to want to waver on. But there is always room to maneuver, even ever so slightly. Take different neighbourhoods in Ottawa for example. You will pay a premium in taxes to live in Westboro because it is a highly desired community. However, if you travel slightly to the south towards the Carlington area, you are still close to Westboro but do not have the higher price tags associated with living directly within that community.
If you are willing to move a few minutes commute away from your desired neighborhood, you may be able to save a bit of money. You are more likely to find a “starter home” like a cute bungalow just around the corner from your dream neighbourhood.
Consider Luxury flexibility
When you are house hunting, don’t get hung up on the type of flooring or the fixtures in the kitchen. When you are buying your first house, you may need to close your eyes to some aesthetic problems in order to see the full potential of a house. It’s cheaper to buy a house and fix it up over time then to buy a house that is already done with high-end furnishings.
Yes, there will be a certain amount of work involved on your end, but to save a significant portion off the purchase price of your dream home, it could very well be worth it. Plus, you will be able to make changes at your own pace which is a little easier on the budget. And it feels great to create something special yourself.
Hire the Right Team
The team you choose to represent you can make all the difference. You want a team that will be available when you need them, who will be honest and transparent, and who will be fully dedicated to helping you find the perfect home. Not all agents are like this, so it’s important you take some time to find the right fit.
Maintaining patience while house hunting might be a difficult thing to keep in check. If you get discouraged because you are yet to find a house that you want to call home, don’t settle for something that you don’t feel is quite right for you. There is a difference between buying a fixer-upper and buying a house that you don’t feel you could ever call home. Wait for the perfect house to cross your path.
Learn About the Neighbourhood Demographics
If the house that you wish to buy is in a neighbourhood full of renters, then it will only take a few bad eggs to drive down the housing value of the entire neighbourhood. Also, if you are a young couple in the prime of your life, burning the candle at both ends, do you really want to be in a neighbourhood full of families and children? Consider your wants, needs, and values, and you’ll discover which neighbourhood matches you best.
Look Beyond the Staging
When you view a house, you can be sure that all the best features are on full display. The walls have probably had a fresh coat of paint, and there might be a big screen TV on in the background. You need to look beyond this set dressing – that’s what it really is – to fully see the value of the house. Look for things that are necessary for comfortable living. For example, how many plug sockets are there in the master bedroom? What is the plumbing system like? That fancy TV won’t stay, but essential equipment like the furnace, appliances, plumbing, and electrical will, so look at the things that matter.
Read the Contract Before You Sign!
This is the most important point and one that many people overlook. Contracts can be long and boring, and it’s far too easy to skip to good bits and sign your name on the dotted line. However, if you really want to be fully aware of what you are getting into, then you need to read the contract thoroughly before you sign anything. Make sure that you understand the terms of the contract, and if there is anything you are unsure about, ask for clarification immediately. If there is anything you disagree with, don’t sign until the issue is resolved! If it can’t be, don’t be afraid to move onto another property that interests you.
Questions You Should Ask When Buying a Home
Ottawa Home Buying
Having a firm understanding of what sort of condition a home for sale is in is a vital part of the home-buying process. After all, you don’t want to buy a home that’s in need of several costly repairs.
Here are some questions you should be asking when it comes to the home’s condition:
- What sort of shape is the roof in, and how old is it? Keep in mind, the life expectancy of a roof can vary greatly, from 15 to 50 years.
- What sort of foundation is the home sitting on? Typically, if it’s a newer construction you can expect a slab foundation. Older homes generally have raised foundations.
- Are the home’s walls and attic insulated? In an area like Ottawa, you want to make sure they are so that they keep heat in during our cold winters.
- What’s the age of the home’s appliances? Just like with the roof, you could be looking at costly repairs and replacements if you purchase a home with outdated appliances.
As they say in real estate, it’s all about location, location, location. A less-than-ideal location will not only make your life more difficult while you’re a resident there, but it will also make it harder to resell the home.
Here are some questions you should be asking when it comes to the home’s location:
- What’s the zoning for surrounding parcels of land? If you’re near an industrial park or multi-family apartments, it may be harder to sell your home down the road.
- What schools is the neighborhood zoned for? This can play a major role in whether your home sells quickly later, especially if the interested home buyer has a young family.
- Are there any amenities in the area that some would consider a nuisance? This includes a relentless barking dog next door or a bustling highway nearby.
When it comes to listing price, you want to make sure you’re getting the biggest bang for your buck. Knowing some background on the seller’s listing price can help you with this.
Ottawa Real Estate Market
Here are some questions you should be asking when it comes to the home’s listing price:
- How much did the seller originally pay? Knowing this will help you ascertain whether values are going up or down in the area.
- What have similar-sized homes in the vicinity sold for in the last six months? This will tell you whether the home you’re looking at is under- or over-priced.
- How many days has the home been on the market? The longer it’s been on the market, the more wiling the seller will likely be to negotiate with you on the price.
More Decisions to Make When Buying Your Home
Do you want to buy a home in the suburbs or the city?
When you buy in the suburbs, you’re likely to find homes that are less expensive, with larger lots. A downside to living in the suburbs may be your commute time to work. When you buy in the city, you’ll likely live closer to employers as well as all the amenities that a big city like Ottawa has to offer. The downside is that these homes are typically more expensive and closer to noisy/busy streets.
Do you want to live off a busy street or in a cul-de-sac?
When you buy a home off a busy street, you’ll likely save thousands on the sales price because many people would prefer to avoid the noise that a busy street brings with it. The downside is that the home may be a difficult resale down the road. When you buy a home in a cul-de-sac, you’ll be able to feel safer about letting your young children play outside. In fact, cul-de-sac homes are the number one choice for buyers with children. The downside is that you’ll have less privacy from your neighbors.
Do you want to buy a single-family home or a condo?
Single-family homes generally enjoy good appreciation and ample privacy. The downside is that they tend to be more expensive and require more routine maintenance. Condos are typically less expensive than single-family homes and generally need fewer repairs. The downside is that they may be noisier and have less privacy. Oftentimes, these homes don’t come with a private yard either.
Do you want to live in a single-story or multiple-story home?
Single-storey homes are great for older residents who may have medical conditions that make it hard to climb stairs frequently. They also tend to be easier to clean. The downside to them is that more of the home lot is used up by the ranch-style home.
Multi-storey homes are great for those families who need room to grow. They’re also ideal for people who may want to have a clear separation from rooms for visitors and the sleeping quarters. The downside to them is that it’s generally harder to maintain consistent temperatures throughout the home.
Here are some other factors you may want to consider:
- How many bedrooms do you want?
- How many bathrooms would be ideal?
- What’s the minimum and maximum square footage you’re willing to live in?
- Do you need extra space, such as a bonus room?
- Are you looking for a garage? If so, how many spaces must you have?
- What Ottawa neighbourhood amenities are you searching for? Tennis? Pools? Walking trails?
Purchasing your first home is a big decision, and we want to ensure that you buy a home that you love. As Ottawa’s top real estate agents, our mission is to arm you with all the information and tools that you need to put in an offer that will win the bid. Contact our real estate team today!