How to carefully prepare to buy a home
by JAYSON SCHWARZ, LLM
Here you are getting ready to make what may be the largest single purchase that you will ever make in your life, when you are confronted by daily doses of anxiety caused by uncertainty and indecision. “What do I do?” you ask yourself. Don’t be afraid, take your time, do the necessary research to identify the area you like, the services available to you and ensure that there are no hidden matters that could affect your decisions.
Research prospective neighbourhoods for future development, possible restrictions and their potential impact on property values.
Next, have an honest look at your employment situation, speak with your supervisor and make sure things are as secure as you can. If applicable, speak to your significant other and prepare a detailed budget for all your expenses as prospective homeowners. Consider what happens if interest rates rise, and be prepared for exigencies. Open a separate homebuying deposit account, and make weekly contributions to ensure you can maximixe a down payment.
Then there is the elephant in the room… interest rates.
Interest rates are high, could go higher (ask older people about 18- to 20-per-cent mortgages), and there may need to be more long-term planning than you’ve been accustomed. In other words, these days, you may have to lower your expectations and move slowly. Buy a small condominium and then look to move every three to five years, as home values may not appreciate as quickly as they have in the past. Look to live outside the city, and look for job opportunities in smaller communities with more affordable housing.
The decision to buy should be motivated directly according to what you can afford. It may be difficult, but be very selective about nights out and your discretional spending. Prioritize what you want – being able to buy a home.
The next thing to note is that the cost of construction is starting to come down, and builders will be much more amenable to negotiation than they have in many years. Find a builder that is selling to your price range and then worry about what necessities you need in your negotiations to ensure the home will work for you.
When it comes to the professionals you will need to help you with your purchase, consider this checklist:
- . Mortgage specialist: Whether at your bank or a mortgage broker, find a reputable financial expert you trust and are comfortable with. Find out how much money you can borrow and how much of a deposit you’ll need to put down. This will allow you to focus on homes you can afford. Get a pre-approval in writing so you have something to rely on, because today especially, it is critically important that you do not get caught up in the rush of buying a house beyond your budget. Nothing is worse than living for the house, not living in your home.
- Real estate lawyers: Look around for a lawyer who focuses on residential real estate in their firm. Check Google reviews and rankings, and look in real estate magazines such as Condo Life and HOMES. Ensure the lawyer does more than just close your deal. You want someone who will explain the different kinds of ownership, why you should have a will before closing and other matters. Make sure they actually review your offer and all associated costs.
- Realtor: Look for an experience realtor who knows the area you’re looking in, as well as the type of home you’re purchasing. Don’t just use a family friend or distant relative. Research potential realtors online, and get referrals from other homebuyers they’ve worked with. Once you’ve found that perfect home, let your lawyer know so they are prepared to review the offer when received.
By fully and properly preparing for buying a home, you will change any potential anxiety and fear into excitement and a sense of accomplishment. Good luck.
Jayson Schwarz LLM is the senior managing partner of Schwarz Law Partners LLP. schwarzlaw.ca.
2023-10-11 3:29 PM