Insider advice for first-time home buyers
You’re doing some serious looking and you need some serious help. Buying a first home can be a daunting affair. Here are a few tips from people in the know to boost your confidence and give you an edge as you launch into the home buyer adventure.
1. Choose your neighbourhood
The best way to start your search for a new home is to decide where you would like to live. You have a crush on Griffintown? or Saint-Jérôme? Don’t jump in with both feet until you’re really sure. After all, it’s a commitment. Consider your neighbourhood as a context for your way of life and think about the qualities you’re looking for. City or suburbs? Quiet dead end street so the kiddies can play road hockey, or something with a downtown party vibe? Green spaces? Markets? Public transit? Close to everything or far from it all? Now look around. You might be surprised to discover a new little jewel of a neighbourhood that offers everything you’re looking for, or you may just realize that the crush you had was the real thing.
2. Get the insider scoop
Talk to your real estate agent friend to get a clearer picture of the housing market in the area you have chosen – average asking price, average selling price, and average time on the market for comparable condos or houses. You don’t know a real estate agent? Think again. Try LinkedIn or other networks to find a friend of a friend. You can also go check out the price of similar homes on the local resale real estate market online at Centris.
3. Set your budget
Contact a mortgage broker or use this nifty little calculator to find out how much you can afford to borrow for a new home. Even better, ask for a pre-approval from a financial institution, which will give you a little more negotiating power with a builder or developer. Keep in mind the possibility of municipal rebates for first buyers, with or without children, depending on the value of the property you are buying.
4. Shop shop shop
This is the fun part. Walk, drive and ride your bike around the area you are interested in. Go online to GuideHabitation.ca where you can check out all the listings for new homes by sector. Take a look at the developers’ sites and do your homework about their reputation. Visit some model homes or units and start taking some serious notes about what you see. This little tool will help you compare prices and characteristics.
5. An offer and another
Here’s a little-known secret. You can make more than one offer. A preliminary contract is binding only after 10 days, so there is nothing stopping you from signing more than one and then backtracking. Important: make sure you include the mention that there will be no penalty if the contract is annulled within the 10 day period. If you are able to make an offer with your mortgage pre-approval and post-dated cheques in hand, you have more negotiating power. A signed preliminary contract then permits you to obtain a mortgage loan more easily from your financial institution.
This is where you get out your magnifying glass and become a nit-picky customer. If your dream home exists only on paper, you don’t have a lot to inspect. However, as soon as the construction has reached the stage just before the gyproc goes up and the walls are closed, it is time to conduct a first inspection with the site manager. You will verify the insulation, electricity, plumbing, intercom, heating and air conditioning and the basic structural elements. The help of a building inspector at this stage is extremely valuable. You can request a verbal evaluation without a written report – it will cost much less but you will still have a professional assessment.
The second inspection occurs right before the final delivery of the condo, and is registered with the home warranty. This inspection is a detailed review of your living space. Here are some of the most important things to check out: cable, internet, plumbing, windows, flooring, storage, kitchen and vanity cupboards and countertops and parking (indoor or outdoor). Again, especially if you are a first buyer, bring somebody with you who has experience. Take your time and do not be afraid to make a note of every little scratch and dent.
7. Let’s make a deal
Time to sign those papers and call this little nest your home? If you’re still only looking at somebody’s drawings, go slowly. If your builder doesn’t have the permits in hand, start with a $2,000 deposit. With the beginning of construction, and only if the new home warranty is in place for the civic address or lot number of the project under construction, you can begin paying in instalments up to $39,000 – the limit allowable for warranty in Quebec -- as a down payment.
To protect yourself against possible delays in the occupancy date, be sure to read the fine print in your preliminary contract, and remove as many contingency factors as possible. If the builder is accredited with the New home guarantee program of the APCHQ, you can be compensated $50 to 75 per day up to $5 000 for late delivery.
If the unit is habitable but certain features are missing, you can still move in but make sure you retain an amount equal to the value of the missing items in a trust account at the notary who will then pay out when the work is completed.
Your new nest is ready and so are you? Congratulations! It’s time now to move in, and to move on to a little interior decorating… or socializing … or cocooning … or exploring the new neighbourhood … or …
Stock images: Shutterstock
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