When we first moved to our little town we started a house hunting search. In the first few months we had seen about 20 homes in every shape and size.
It was overwhelming, and a bit disheartening. You see, we picked an arbitrary number-something we thought we could afford without really looking at the numbers.
To do it over again, we never would have made contact with out realtor until we knew with a certainty what we could afford. (Check out part 1 in my blog, if you haven't done so yet.)
After working through what you are able to afford (and having your savings in place), the next step is to speak to your banker and/or mortgage broker. If you know that you have good/great credit, this step is of course much easier. Do get two bits of advice. The more information you have at hand, the more prepared you will be to negotiate a term that works for you.
Note: There are many types/ways of creatively financing your mortgage. For now, I will be discussing a conventional mortgage process (as this is what I am most familiar with).
So, you hear back from your mortgage broker/banker and you find out that they have approved you for an X amount. (Remember: often it can be more than what you can actually afford in reality.)
Now it is time to start looking at the local market...and begin making your lists.
Lists???
Yes. First you start with your must-haves, better known as the, will not compromise X, list.
For example: location, 3 bedrooms, 1 bathroom, open concept, electric heat, yard, washer/dryer/fridge/stove, new windows, newer roof
Then you make your 'would be nice' list.
Examples: Stainless steel appliances, laundry on main floor (not basement), ensuite bathroom, hardwood floors, dishwasher
Then you make the 'I am comfortable changing X list'. If you are a handy person, then you might be comfortable tackling major reno's, some people do not want to even tackle paint. You need to be honest with what you can manage-and this HAS to be part of your search.
Now with lists in hand, the best place to start is Realtor.ca You can begin by viewing homes in your price range. Remember that homes viewed, doesn't mean that's what you'd pay, it can be more or less depending on the market, length of time it's been up, amount of work it needs done etc;
So if your max budget is 110K, then you should be looking around the 75K-125K price range. With the understanding that the closer you get to your max budget, the less amount of work it should require to meet your standards.
TIP: don't fool yourself into thinking you'll get a 10 out of 10 home. Even if you build your own place there is ALWAYS going to be something you want to change.
Now, with lists in hand...meet with your realtor-FULLY explaining what you are willing to pay and what you are looking for.
We saw far too many homes. It was unnecessary for both us and our realtor.
Now in each home you view, make sure you take your checklist, and take photos. Note anything that you see immediately that you would change.
After your first viewings, take a look at what you have. Try to narrow down the homes that you would like to revisit, based on price, amount of work required etc;
Go back, and REALLY look this time. In the cupboards, in the crawl space, anywhere where you can get access to. Fill in any holes you missed on your first search.
Now for most home buyers, it's a very emotional decision. You either love it, or hate it often enough. No matter the love-you need to do your homework.
In some cases, you might love it, but can't afford the extra 20K to put into it.
So you found the 'perfect' home, and it fits your budget and major expected repairs for first look...alright-it's time to put in an offer.
WOOHOO.
It was overwhelming, and a bit disheartening. You see, we picked an arbitrary number-something we thought we could afford without really looking at the numbers.
To do it over again, we never would have made contact with out realtor until we knew with a certainty what we could afford. (Check out part 1 in my blog, if you haven't done so yet.)
After working through what you are able to afford (and having your savings in place), the next step is to speak to your banker and/or mortgage broker. If you know that you have good/great credit, this step is of course much easier. Do get two bits of advice. The more information you have at hand, the more prepared you will be to negotiate a term that works for you.
Note: There are many types/ways of creatively financing your mortgage. For now, I will be discussing a conventional mortgage process (as this is what I am most familiar with).
So, you hear back from your mortgage broker/banker and you find out that they have approved you for an X amount. (Remember: often it can be more than what you can actually afford in reality.)
Now it is time to start looking at the local market...and begin making your lists.
Lists???
Yes. First you start with your must-haves, better known as the, will not compromise X, list.
For example: location, 3 bedrooms, 1 bathroom, open concept, electric heat, yard, washer/dryer/fridge/stove, new windows, newer roof
Then you make your 'would be nice' list.
Examples: Stainless steel appliances, laundry on main floor (not basement), ensuite bathroom, hardwood floors, dishwasher
Then you make the 'I am comfortable changing X list'. If you are a handy person, then you might be comfortable tackling major reno's, some people do not want to even tackle paint. You need to be honest with what you can manage-and this HAS to be part of your search.
Now with lists in hand, the best place to start is Realtor.ca You can begin by viewing homes in your price range. Remember that homes viewed, doesn't mean that's what you'd pay, it can be more or less depending on the market, length of time it's been up, amount of work it needs done etc;
So if your max budget is 110K, then you should be looking around the 75K-125K price range. With the understanding that the closer you get to your max budget, the less amount of work it should require to meet your standards.
TIP: don't fool yourself into thinking you'll get a 10 out of 10 home. Even if you build your own place there is ALWAYS going to be something you want to change.
Now, with lists in hand...meet with your realtor-FULLY explaining what you are willing to pay and what you are looking for.
We saw far too many homes. It was unnecessary for both us and our realtor.
Now in each home you view, make sure you take your checklist, and take photos. Note anything that you see immediately that you would change.
After your first viewings, take a look at what you have. Try to narrow down the homes that you would like to revisit, based on price, amount of work required etc;
Go back, and REALLY look this time. In the cupboards, in the crawl space, anywhere where you can get access to. Fill in any holes you missed on your first search.
Now for most home buyers, it's a very emotional decision. You either love it, or hate it often enough. No matter the love-you need to do your homework.
In some cases, you might love it, but can't afford the extra 20K to put into it.
So you found the 'perfect' home, and it fits your budget and major expected repairs for first look...alright-it's time to put in an offer.
WOOHOO.
...to be continued...
...remember to seek professional help when purchasing a home for the first time, this is meant to be a guideline or food for thought...
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