After almost three years of searching for the perfect home, my wife and I recently went through the experience of buying our first house. I thought I would share some of the things we learned along the way that might be able to help you.
Look at a lot of houses in the beginning
When we first started looking we were given the advice to load up our Sundays with as many open houses as we could accommodate, both those houses in our price range and those that weren’t. That way we would get to know what we really liked and didn’t like.
It also allowed us to figure out and create a list of things we wanted in our eventual home and changed our minds completely. We discovered we didn’t want to settle for a house for a few years and then look to upgrade, we’d rather wait now and buy our ‘forever home’.
Be patient and don’t settle
We had put in the time to figure out what we wanted. We hired a real estate agent and shared those ideas with them. Now all we had to do was sit back and wait. This was BY FAR the hardest part. Houses would continually flood our inbox and the temptation to settle (especially after waiting for a while already) is enormous. DON’T DO IT. Have faith and be patient; your house will come.
Get the right mortgage for you
Because we had so much time between when we decided we wanted to buy a house and when we actually bought our house, we were able to do a lot of research into mortgage options. What we discovered is that a mortgage is one of the most misunderstood financial tools around.
We are conditioned to look solely for the lowest interest rate. While this isn’t wrong, it needs to be put into context with the rest of your mortgage wants as well. For instance, you can get a fixed-rate or a variable rate. A variable rate will likely be lower in the beginning, however it can change, for the better or the worse, throughout the course of your mortgage term. A fixed-rate will likely start out a little bit higher than a variable rate, but it is locked in place for the entire length of your term. It can’t be changed.
Something else to keep an eye on is interest rate versus interest paid. It may be the case that you have a lower interest rate, but how it is compounded could mean that you actually pay more in interest than someone who has a higher interest rate.
Get a professional home inspection
I come from a family of tradespeople. My oldest brother is a plumber, my second brother is a carpenter, my brother-in-law is a mechanic, and I originally went to school for electrical engineering. Generally, we are a pretty handy family. Yet even with all that firepower we went ahead and got a professional inspection done with a full written report. And we are glad that we did! Our inspector found things that we wouldn’t have even thought to look for. They also ranked them by what would need to be done sooner than later, allowing us to use it as a checklist for improvements to the home.
While the report cost us $500, we were able to take the findings back to the seller and negotiate an additional $4,000 off the asking price. Needless to say, the inspection has already paid for itself.
Shop around for professionals
You will need to secure some help from the professionals. A lawyer, a real estate agent, a mortgage broker, an inspector and a financial advisor are all used when buying a home and likely a few others. I can’t stress how important it is to shop around before hiring someone to work for you. Look for two things: price and comfort level.
You want to find someone who will charge a fair price for the service delivered, otherwise you can end up paying a lot more than you need to for the same service.
Your comfort level with the person working for you is equally, if not more, important than the price you pay. Make sure you find someone who you can be open with and who will put your needs above their own. The experience shouldn’t feel like you are just another transaction for them.
Enjoy the process
Whether you are buying your first home or your tenth, take some time to enjoy the process. It is something new, fresh and exciting that is happening in your life - so have some fun!
It can be easy to get swept up in the stress and demands of everything. Try to safeguard against it by slowing down and taking in those sweet moments.
My wife and I found the perfect home and we are looking forward to watching our family grow up in it for years to come. I hope that you can use some of our experience to help you in your next home search.
Wade Bedard CIM
Manulife Securities Incorporated