Top Ten Tips For First Time Home Buyers in Burnaby
1.) Get a Mortgage Pre-approval.
This is a crucial first step, unless you are in the envious position of being able to pay 100% cash.
A mortgage pre-approval is more than a rate hold; it will give you confidence that you are looking in the right price range and can truly afford what you are buying. There is nothing worse than falling in love with your dream home and then finding out you can't afford it! Also, Having a pre-approval marks you as a serious buyer, both to your REALTOR® and to the Sellers. Many real estate agents won't even work with you until you have your pre-approval done. I would be happy to provide some names of some great mortgage brokers and lenders.
2.) Ensure You Have An Adequate Down Payment
While it is possible for first time buyers to purchase a home with as little as 5% down with a CMHC insured high ratio mortgage, these do cost a lot more because of the insurance premiums. It's better if you can source a 20% down payment and avoid these premiums. You need to have this money liquid before you start your home search.
3.) Find a Great Buyer's Agent
Find a REALTOR® that loves working with buyers and who takes a hands on and consultative approach to finding you your new home. A great agent does a lot more than find you properties to look at; they will help you assess the various options, do a CMA to help you frame your offer price, negotiate on your behalf, arrange inspections or help with other service providers, do due diligence and oversee the transaction from start to finish. In most cases the Seller pays a portion of the commission to your agent so you agent's services do not cost you anything.
4.) Prioritize Your Search.
The best homes can sell very fast, so it's important to prioritize times in your schedule to go look at properties. Many homes will be sold shortly after the first open house, so seeing homes as soon as possible after they hit the MLS system will give you more time to do your due diligence and talk to your mortgage broker about the specific property.
5.) Customized MLS Search.
Ask your REALTOR® to set up a customized MLS search for you. While MLS listings are syndicated to thousands of websites it can take a day or 2 before they hit REALTOR.ca. Your customized MLS search will show hot new listings as soon as they are listed.
6.) Be Open Minded
Remember that for most of us, our first home is our "Starter Home" and unless you are extremely well funded this usually means having to make a series of compromises. It can be very disheartening if you are a regular watcher of Home and Garden TV and then see what you can actually afford. If you are working with a tight budget it's important to keep an open mind. For example, "Fixer Uppers" often can be a diamond in the rough so its important to look beyond the ugly wallpaper and worn carpet and see the potential of a home... remember that paint is cheap! If your search criteria is very narrow, especially if you have tight budget, you really limit your options and may miss out on a great opportunity.
7.) Have Your Down Payment At The Ready
In BC (for existing homes) down payments are usually about 5% of the offer price and are payable via bank draft within 24 hours of the subject removal or when you have a firm offer. If you know you are going to be competing against other buyers, you should have a bank draft "in hand" when making your offer as it makes your offer stronger and shows you are a serious buyer. If you plan on removing your money from locked in investments or RRSP's you need to do this before your start actively home searching because it can take a few days to release the funds.
9.) Grants and Rebates
Understand The Various Grants and Rebates Available When Buying Property in BC - See attached.
10.) Closing Costs
Make sure you budget for all the closing costs associated with buying a home. At a minimum and depending on the property you purchase you will have to pay your lawyer or notary, property transfer tax and adjustment costs. Don;t forget about the costs of moving you furnature and hooking up your utilities! See this worksheet outlining costs involved with purchasing a home in BC.
Lynn Le Drew is a licensed real estate agent who has helped many first time buyers both with re-sales and pre-sale properties in Vancouver and Burnaby. Call 604-346-6801 for a free, no obligation info session.