If you’re thinking of jumping into the real estate market as a first-time homebuyer, or want to move up the property ladder, real estate can mean sleepless nights. Whether you’re tossing and turning over what colour to paint your new digs or concerned with what you can afford, enlisting the help of an expert can ease the stress.
Sarah Daniels is a BC-based realtor who tells it like it is in her new book, Welcome Home: Insider Secrets for Buying or Selling Your Property. Packed with information about mortgage rates, investment properties and all other details of buying and selling, Daniels’ book is a must-read for anyone new to the market or in need of a refresher course.
“The biggest shock to first-time buyers is the closing costs and the property transfer taxes,” says Daniels. It’s important for buyers to do their homework and have realistic expectations. But most first-time buyers aren’t fully prepared.
If you grew up in a nice neighbourhood, chances are you won’t be able to afford the same kind of house as a first-time buyer, says Daniels. That doesn’t mean that you can’t eventually own in that neighbourhood, but you might have to buy a fixer-upper and put some work into it.
Before getting started, she says, potential homebuyers should know how much they can really afford – crunch the numbers and figure out how much their current lifestyle costs. “If you’ve got kids in hockey or daycare, you need to consider that when you buy a new home,” she says. A big supporter of going with mortgage brokers over banks, Daniels suggests making more frequent mortgage payments to chop years off your payments. She also advises clients to “try to buy something that you can sink some money into and build equity in. If you can, put some money into renovations and buy a house that needs some work.”
Twenty-something Alicia Vecchione is celebrating her first year in her condo. As a first time buyer, she opted to buy a resale condo. “I didn’t want to wait for a condo to be built. And by having a resale condo, it is less likely for the maintenance fees to jump. I had to get a place with low maintenance fees and my building already had many major jumps that condos often have in the first few years. I wasn’t about to get myself in a situation where, in a year from now, I could be paying more a month for maintenance,” she says.
Deciding to buy was a no brainer for Vecchione. “It just sort ofhit me that I was throwing my money away on rent. I decided to get a quick online pre-approval, and from there it looked like I could afford it. So, I thought why not buy instead of rent? It’s an investment,” she says.
When looking at properties, Vecchione says the most helpful advice from her realtor was to look at the space and not what’s inside it. Everything in it can be changed.”At first, I was getting caught up in appliances, but in the end all of the appliances can be changed,” she says. At the beginning of her search, her realtor told her she probably wouldn’t be able to afford a balcony and ensuite laundry at her price point, but she found both.
While Vecchione confesses to being a little overwhelmed by all of the money matters and documents when buying her first property, her realtor put her in touch with a mortgage broker. “The mortgage broker did everything for me and it was actually a lot less than what I thought I could afford. She had a price point that I had to stay in and I couldn’t have maintenance fees that were more than $250 – which took a lot of condos out of my search,” she says.
Vecchione advises other prospective buyers looking at condos to make sure they factor in maintenance fees in purchasing decisions. “Look for low maintenance fees. Most people don’t take advantage of most of the amenities and you really need to think about whether you need a pool in your building. I have a gym in my building and that’s it. It keeps my maintenance fees below $200 a month.”
One of the biggest challenges as a single first-time buyer is keeping track of all of the bills. “I can afford to pay them, it’s just that there are so many more that I have to pay each month, sometimes it feels a little overwhelming to stay organized,” she says. But in the end, “the most rewarding thing is knowing that the condo is mine. It may be small, but I own it and that feels like an accomplishment.”
Lucie Grys is a freelance writer and avid viewer of HGTV. She can be reached at www.luciegrys.com