Often our first time home buyers have one thing in mind, and that's hitting as many checks on their list of what they need and want in their dream home, the home they've been thinking about for the past few years. But before you find your perfect home, fall in love, and make it your own, read our list of 10 things you probably should know when buying your first home in Calgary.
#1: *THIS MAY SOUND HARSH* But For The Most Part, There Are No Perfect Dream Homes, Your List Will Probably Evolve Throughout The Process
Sure if you build a custom home and see the development from front to end, you can quite easily hit your list of desires depending on your budget, but even our clients who have built homes have said "We love it, but we'd definitely add this next time, or change this" it's just human nature, especially in todays society.
Often our buyers will have lengthy lists of needs and wants, and not surprisingly to us, those lists continue to grow as you shop and see more homes, usually buyers don't even consider some of the unique traits to homes that aren't as common, after all, who knew you need a nice little built in shower / basin by your boot room for your dogs when their paws are muddy?
If you have simple expectations and needs, it's often easy to fulfill and exceed expectations, but for most buyers who's list is evolving and growing continuously it often turns out that some items have to be prioritized over others, resulting in the not so PERFECT dream home. It's important that you manage your expectations of what to expect, some things are easily fixed, it could be as simple as changing out some paint or counter tops, adding more or better lighting, a little landscaping, or adding some nice new granite countertops from the cut you pick yourself. Regardless of what you may or may not need, just keep in mind that your Real Estate Partners agent will be able to guide you to the home that matches as much criteria as possible and ensures you're getting in a home with good bones and potential.
#2: Get Setup With The RIGHT Mortgage
How often have you thought about jumping at the lowest rates? The facebook post from your local mortgage broker that offers rates 1 or 2 points below what your bank or mortgage broker is offering? Your mortgage partner should give you options and suggestions that are more than just the rate, giving you advice on the type of mortgage, the length, your options for breaking and paying it down. Before you jump into the best deal, talk with your Real Estate Partners agent and ask them which mortgage professional is best suited to your needs so that you know you'll be working with an impact partner who goes above and beyond for your biggest financial purchase.
2.A - Get Pre-approved before you start shopping! We give this advice all the time, and there's nothing worse buyers who think they'll be able to afford a desired amount, put an offer in, fall in love with a property, only to find out that they're not qualified for that amount and won't be able to close conditions.
#3: Invest In A Home Inspection
Our team depending on the property and circumstances will produce our own home inspection when a property is listed for sale, we've had offers come through on these properties that lacked home inspections as they we're counting on ours to do the job, and while we fully trust all of our partners work, there's very few situations, that we wouldn't recommend that our buyers hire and have a professional conduct their own home inspection. Homes that have been built just years ago can and do have issues. Never take another agents word for it, or the home owner, having an agent who knows who to navigate these circumstances and look out for your best interests is vital. Your home inspector will look over key areas that could potentially cost you thousands to fix, from the roof to electrical, plumbing and foundation, to appliances and everything in your mechanical room.
Pro tip - When buying a home, your agent should have all agreements for fixes / changes in writing between you and the seller, an agreement (even in writing) between two agents is not binding as an offer to purchase is a contract between you and the seller, therefore even if a selling real estate agent in Calgary promises to fix a leak faucet before you take possession, ensure your agent has this in writing, and the recourse if it isn't fixed before you take the keys.
Pro tip #2 - Remember that a home will never be perfect, even homes that are months old can have issues, some major, some minor, your agent should be able to discuss your home inspection report and digest what items are worth discussing with the other agent, and what items are routine minor fixes that are commonly seen and to be expected.
#4: Start A Savings Account For Your Home
Regardless of how new or old your home is, the property will eventually need maintenance and fixes to be performed. From the Roof to everything in your mechanical room, nothing lasts forever and being prepared for these costs is important for new home owners, start a savings account that you contribute to monthly for when that time comes! This should be different from your emergency funds say if you were to lose a job, this fund should be in place for sudden (but typically expected) expenses i.e. your furnace motor dying and you having a bill for $800 to fix it.
#5: Don't Be Afraid To Ask Questions
There's nothing worse than being uncertain about something in the process, and while our team does everything possible to educate our clients throughout the process, there are times where an agent will know something through and through as they live, eat, sleep, and breathe real estate 24/7 that a client may just have no clue about. It's our passion and job to make sure that you're comfortable and understanding of the entire journey, don't be afraid to ask questions, whether its to your agent, home inspect, lawyer, mortgage broker, or anyone else involved, these talented individuals should be more than happy to explain every nuance throughout to ensure you're 100% comfortable and in tune with your purchase. There's no such thing as a dumb question when it comes to one of the biggest purchases you'll ever make.
#6: Consider Your Closing Costs
As a home buyer in Calgary, you won't directly be paying your real estate agent to help you find and purchase your home (Call our client care manager at 587-578-7653 to find out why) but there are definitely costs associated with the closing and purchase of your home, here's a quick run down of potential expenses you should have cash or credit on hand for.
- GST 5% - For new home purchases
- Home Inspection $300 - $800 | This will vary depending on the size of the property and level of inspection required, for example, a home that needs a sewer scope performed will be higher than your average inspection.
- Legal Fees $900 - $1,500+
- Condominium Document Review $300 - $500
- Insurance $300 - $2,000+
There are other fees that could come up as well, discuss with your agent based on your personal situation.
#7: Not All Fixes Require A Professional
Disclaimer: We cannot recommend which fixes should or shouldn't be done by a home owner, but can share some fixes we've seen from clients, that have saved them thousands of dollars.
One of our favorite stories about home owners saving costs on fixes was a client who had purchased their first home, they had no trades or repair experience and generally dubbed themselves as not being very handy, but after a year of ownership, and a little Youtube to help out, they started taking on more and more minor upgrades to their home when one cold winter day their furnace stopped working, they called a furnace company and received two quotes that said it would probably cost them somewhere between $500 to $1,000 to fix, they read the furnace panel and saw the LED Indicator blinking in a specific way, which stated the problem on the panel, went to a local furnace parts store, obtained a $15 ignition piece, and swapped it out themselves, saving them hundreds of dollars!
Another buyer of ours had never done plumbing before but had read on the simplicity of replacing a toilet, they had obtained a quote for $250 on labour alone to replace a toilet, and after a little research and due diligence, they were able to replace the toilet themselves for $150 (just the cost of the unit itself) for what otherwise would have cost them another $250 minimum.
#8: It's Okay To Have Friends And Family Help, But Be Cautious On The Advice They Provide
It's pretty common in this industry to have friends and family help out in decisions, give unsolicited advice, and sometimes completely take over. While we recommend that you leverage the advice of professionals, and make the decisions on your own, we do encourage those who want other input from uninvolved parties to take caution, there are some incredibly heart breaking situations we've seen where poor legal advice from non legal professionals ended up costing our clients thousands of dollars after their purchase which could have easily been avoided if they had sought advice from their agent and / or real estate lawyer. But it's not just money on the line, recently we saw clients in a purchase have an incredible falling out with their parents after receiving bad advice. Our sellers had listed their home and had received an offer from a pair of young buyers who had absolutely fallen in love with this home. Their initial offer had brought them nearly within the mark our sellers we're comfortable with, and as negotiations got closer, their parents had given the advice to walk away and give our sellers a couple days to change their minds and meet more of their expectations (thinking this is a heavy buyers market) unfortunately for them, in today's market, a well maintained, and well priced home can often be sold quite quickly and before they could come back to the negotiation table, an offer came in and was accepted. The buyers we're devastated, they had been shopping for months and this was the first home they had truly fallen in love with and put an offer on. The buyers who purchase the home ended up buying it for only a little more than where their offer was before they walked away, and essentially they lost their dream home over a small amount of money that they stated they would pay if that deal were to fall through, it didn't and they were forced to get back on the search for a new home that met their needs.
Buying a home with the help family or friends can be very fun and rewarding, but make sure you discuss the important decisions and details with your agent before doing anything that could potentially leave you in an undesirable position.
#9: Is This Home Short Term?
There are a lot of costs that come up when selling your home, you could face mortgage breaking fees, real estate fees, repair fees, etc. The reason we bring this up is because we sometimes come across buyers who think / say "We'll just move if we don't like it" or they think that a dramatic change in living / lifestyle won't bother them, they go from having a low rent space that allows them to travel and be free, with no personal maintenance responsibilities, to riding a lawn mower, carrying a mortgage, having property taxes, and maintenance bills, all while they've moved into an area they thought they'd like but realize it's too far from their friends and family and they often feel home locked. Give thorough and deep thought into all elements of home ownership, it's okay to rent short term to test the waters in some aspects and be confident in your next big decision.
#10: Follow Your Brain And Not Your Heart
Last but definitely not least, give some thought into why and where you're moving. Recently we had a client who moved out of town into a neighboring area to live closer to one of their siblings, they weren't overly fond of their new home, nor the area, nor the longer commute they'd be taking on, but the thought of growing their two families up together overwhelmed their final decision and unfortunately after moving in, just three months later their sibling and their significant other decided that the town wasn't right for them and they listed their home for sale. While you may not be in a situation like this, we see it in all different forms all the time, from people choosing to move close to where they work, only to find a better job somewhere else, to finding new love and needing to sell their trendy but tiny loft downtown. The bottom line is that it's okay to be selfish in this purchase, consider your circumstances, and have the foresight to consider as many variables and changes that could arise, buy a home that is suitable in all instances and not just one that warms your heart.