The art of buying a house
Buying a house is pretty much like falling in love: at first, it’s a mix of unrelenting passion and excitement – a lot of ‘I can’t stop thinking about you moments‘ and ‘I want to spend the rest of my life with you‘ thoughts. Then eventually that passion either gets reciprocated or you walk away with your heart crushed to a million tiny pieces. In other words, it’s not what it’s all cracked up to be.
We jumped head on into the process, thinking we were well-equipped for what we were about to face, not realizing there’s a lot of necessary little steps along the way we had to figure out first. We’re still in search for our dream home, but after weeks of being in the market, I can confidently say we’ve gotten better with the preparation and have become more familiar with the real estate lingo. However, please note that there will still be unforeseen circumstances that will always be beyond our control, regardless of how much preparation you do. But don’t despair, getting yourself as ready as can be is still a great head start. Having said that, here are some tips to help lessen the stress of buying a house:
1.Shop around for the best mortgage rates. Don’t settle for the first place that offers you a mortgage pre-approval. Shop around for the best rates, and reach out to a mortgage brokerage as they often offer better rates than banks.
2.Get a mortgage commitment letter. Once you’ve locked in your ideal rate, ask about getting a mortgage commitment letter. This guarantees sellers that you have good credit and is a great bargaining chip when presenting your offer.
3.Working with a realty agent. There are some pros and cons in working with a realty agent. Pros include having an extra support system, and gaining invaluable knowledge in terms of determining how much similar properties in the area you like have sold for in the past couple of months. Cons could include working with someone who doesn’t have your best interest at heart. At the end of day, they can’t be totally objective as the more money you spend on a property the more commission they’ll get, so they may push you to go above your budget. So make sure you interview with a couple of agents before deciding on which agent to work with.
4.Define your needs vs. wants. It can be very easy to confuse the two. It’s easy to want to have everything you dreamed of in your first home, but it may not be realistic depending on budget. Make sure you define your needs vs. wants. Is location more important than size? What are you willing to sacrifice to get the location you want?
5.Freehold vs. townhouse with condo fees. In the long run, freehold townhouses appreciate more in value as it’s in higher demand. If you do decide to go with a property with condo fees make sure to ask what the fees entail. In most cases, the fees include hydro. But depending on how much the fees are, they could also include roofing and windows. Get a lawyer to review the condo documentations to make sure you understand what the fees include and any responsibilities required from you.
6.Bidding wars. Bidding wars can suck the life out of you. Every house we’ve bid on had a bidding war, and we lost out on all of them because someone always bid higher than us. This is where things can go astray regardless of how much prepping you do. Depending on how many people are in the bidding war, it can get very tricky trying to determine how much you should bid on. i.e. the first house we bid on had 11 offers. Expect to bid thousands over asking price.
7.Set a price on your dream home. Since everything is basically a bidding war, set a max price on what you’re willing to spend on your dream home. Be ready to go this high if you find a house that meets almost all of your qualifications.
8.Questions to ask in an open house:
- When are you accepting offers?
- Why are the owners moving?
- When are they hoping to move out of the house?
- How old are the windows, furnace, and roof?
- Is the hot water tank rented or owned?
I hope this helps you in your buying process and here’s hoping we find our dream house soon!