Buying a house isn’t like buying a kitchen appliance. You don’t have the luxury of researching, reading reviews, price matching, and using all of that to choose the absolute right fit before bringing it home. And if it doesn’t quite fit as well as you thought, you have the opportunity to return it for an exchange or refund.
Instead, when buying a home, you are limited to the ever-changing availability of the real estate market inventory, which may or may not contain a home that fits all your wants and needs. This is especially true in a seller’s market, like we are currently experiencing in Saskatoon real estate. And if you do find one outside of your budget, saving up just a little more and coming back to it usually isn’t an option. There are no reviews other than those of the sellers, and if you feel like you’ve made a wrong choice, a refund is not an option. So how do you know you’re making the right choice?
Well, here are just a few tips for buying a house to help you along the way:
Tip #1 – Keep Looking Until You Find the Right Home in Your Price Range
Every market is different, and you may need to concede some of the items on your wish list to find the right house. Things like the neighborhood your dream home is in, the year it was built, and its condition can drastically change its value.
Don’t give up! And rely on the advice of your REALTOR®—they’re a seasoned professional. A house is one of the most significant investments you’ll ever make, so you shouldn’t need to feel like you are settling simply because you are in a rush.
Tip #2 – Pay Attention to Location & Layout
Hate the decorations? Disgusted by the paint colors? Get over it! These are all things that can be fixed later on. However, nothing can be done about a bad neighbourhood, crummy floor plan, or a 20-minute commute to the closest grocery store, so don’t compromise on those.
Look for a neighbourhood and layout that fits your lifestyle. And for a good deal on buying a home, be open-minded about that dated kitchen tile.
Tip #3 – Think About Home Value Growth
Don’t just go for a pretty porch or spacious yard; look for a property that will grow in value over time. Do some research on the history of home values and businesses in that neighbourhood and the surrounding area, or ask your REALTOR® about the trends they have seen. Are home values rising? Is the number of businesses increasing? Those are good signs!
And if you can, try to find a house at the bottom price range in the best community you can afford. No one wants to be stuck trying to sell a $300,000 home to future buyers who are shopping in a $200,000 neighbourhood.
Tip #4 – Ask Questions During Showings
Ask tons of questions when you’re touring the house to make sure it’s genuinely your ideal home. Your real estate agent should be able to help you develop a list of relevant questions to ask, but here are a few standards to keep in mind just in case:
What is included in the sale? Does the price include things like appliances, light fixtures, or the hot tub?
When were the appliances updated last? Look at the plumbing, HVAC, septic tank, fridge, oven, and the washer and dryer.
How old is the roof? When was the last time it was looked at for any potential damage or leaks?
Are there signs of any pest infestations or water damage? Quite often, these can be visible at face value, but ask the sellers if there may have been anything they may have encountered beneath the surface.
What is the home like in winter and summer? Is there a south-facing window that turns the living room into a sauna without a good pair of blinds? Is there a draft that doubles the electricity bill in the winter just to stay warm?
Of course, there are countless other tips that I could give you for buying a house, many of which I mentioned in my Official Guide to House Hunting. However, the best way to ensure you are finding the perfect home for you and your family is to work with your very own REALTOR®.
Don’t have one? I’d be happy to help—contact me today!
The pre-approval step is an important one. After all, it will dictate how much you can spend and will allow you to determine how much you want to spend. Those sometimes are two different numbers. By getting this step out of the way, you are able to make educated decisions based on your financial situation.
Once you have decided that you want to make an offer on a property, a deposit is needed to hold your interest in the home. Typically a $5,000-$10,000 deposit is required and the cheque is needed at the time the offer is made. The deposit cheque is deposited once the offer has been accepted and is held in the Century 21 Fusion trust account. This money also counts towards your downpayment and will be forwarded to the lawyers closer to possession day. If you decide not to remove conditions on the home during the conditional period, your deposit will be returned or can be held on to and applied to the next property you find.
I usually recommend going to talk to your bank and also a mortgage broker to see what the best interest rate is they have to offer you and what other incentives or programs they might have that fit your needs. Remember that a 0.5% difference in interest rates means that for every $100,000 of mortgage amount, you are paying an extra $26 a month. Do the math and this equates to over $7,800 per $100,000 extra in interest costs over the length of the mortgage. Interest rates are important. Also noteworthy – don’t allow too many lenders to pull your credit score. Every time it’s pulled, your credit rating is affected negatively.
A typical down payment for first time buyer’s is 5% of the purchase price. Ensure you have enough money saved ahead of time so you can proceed with finding a home that’s right for you. If you want to avoid paying CMHC insurance fees (which can be substantial), have at least 20% saved up.
The Government of Canada has a program where qualifying first time buyers can withdraw their RRSP’s and use that money towards their downpayment. It’s called the Home Buyer’s Plan and information on the program can be found here.
Use the mortgage calculator link below to figure out different scenarios based on differing purchase prices. You can find out how much of a downpayment is required and what your payment will be along with details on a payment schedule, and you can add in any other costs that you may have. Using an affordability calculator online is a good way to help you work backwards and will calculate a purchase price you are comfortable with based on all other criteria imputed. Click here to access the Mortgage Calculator.
Costs Associated With Your Purchase
Buying a home can be overwhelming, especially when large amounts of money are involved. Here’s what you can expect with costs associated with your purchase.
If you’ve decided to hire a home inspector, it will cost you around $400. I can arrange any other inspections as well and depending on what they are, the costs will vary and all will be your responsibility to cover.
Real Estate Fees
As a buyer, you don’t pay for my services. My commissions get paid through the seller of the house you’ve chosen. Once you decide to sell your home, you will then be responsible to pay for both sides of the commission.
Lawyer fees can vary but here’s what you can expect in fees for a typical purchase:
$800-$1000 + GST + PST for lawyer fees
+ $3/$1,000 of your purchase price for the land titles transfer
+$150 for mortgage registration
+ ~$150 for misc expenses like tax search, courier charges, postage, photocopying, etc.
If you would like a more accurate total, please contact your lawyer and they can let you know a closer approximation of what your total fees will be.
A surveyor’s certificate is a piece of paper that shows the outline of your home and any outbuildings (usually a garage) that are within the property lines. It will have dimensions to the buildings and also the lot size with the legal description. Often the seller will have a current surveyor’s certificate available and it gets handed down to the next owner. If it’s not available, or the seller never had one to begin with, you can purchase title insurance for your property. The lawyer requires either one and will make arrangements in ordering one if a certificate is not available.
Often the seller pays their property taxes monthly to the City. If your possession date doesn’t fall on the first of a month or if the seller pays their taxes annually instead, there will be an adjustment that will need to be made. For example, if your possession is the 15th and the seller has paid their taxes for that month, you will be responsible in reimbursing them for 1/2 of the month that had already been paid. The lawyer will adjust the amount owing and charge you for any difference.
If you are setting up new utility accounts, often the service providers will charge you a hook up fee. These will vary for the provider.
Hiring movers or any other moving expenses you might incur are also something to make note of so you don’t end up with any surprises.
If there are repairs that are needed to be done shortly after moving in, plan for that expense as well. Often those things get added to the to do list and never quite get done until you’re ready to sell.
Knowing what the costs will be upfront will make the entire process less stressful and gives you a better idea so that you can be prepared.