7 things you need to know when buying a home

So you’ve decided to buy a home. What could be more exciting? A new place of your own, with all those possibilities! But before you start mentally moving in to that perfect home you saw at that open house, there’s a lot to plow through. Let’s get to it!

First, before you do anything, speak to your mortgage broker. Don’t even think about hiring a realtor until you have your financing organized. You may have already gone online to look at mortgage calculators to figure out what you can afford, but these are misleading. Yes, mortgage rates have stayed reliably low over the last decade, but the qualification process has become more onerous.

In Canada, virtually everyone applying for a mortgage has to pass a “stress test”. This means that you have to qualify for a mortgage based on a higher rate than what the banks offer, to ensure that if rates go up, you won’t be squeezed financially. The stress-test level is set at either two percentage points above the actual mortgage rate, or whatever the average five-year posted rate is at Canada's major banks (according to the calculations of the Bank of Canada) — whichever is higher. This was all introduced in January of 2018 and has affected the purchase power of many Canadians. Don’t even think about looking until you’ve been qualified! (If you have to sell, get sorted before. Nothing could be worse than selling your current property only to find that you can’t afford to buy what you had hoped.)

Now that you’ve got all your finances in place, it’s time to hire a realtor. Ultimately, you are looking for someone that you feel comfortable with, who has area expertise and neighbourhood knowledge. Remember, a realtor works for you - YOU are the boss. If your calls don’t get returned in a timely manner and you feel that your questions aren’t being adequately answered, that’s a red flag. Trusted friends who have sold recently can be an excellent resource in this regard, so don’t hesitate to ask around.

Time to start the hunt. Here’s what you need to keep in mind when you’re searching:

1) Be patient. You’ve probably been looking at properties online and feel that you have a good idea of what you need. Chances are that you haven’t actually physically walked through any homes yet. Pictures can be deceiving! Realtors hire professional photographers for a reason - to make sure their listings are shown to their best advantage. Once you step foot inside in person, however, all bets could be off. What seemed like an expansive master bedroom might be just the opposite. All of this can be incredibly frustrating, so be prepared for the occasional disappointment. Conversely, don’t ignore the property with less than lovely pictures. It could be exactly what you’re looking for, and a visit doesn’t cost you anything.

2) Make sure that you are looking for a home that you can see yourself staying in for a minimum of five years. The cost of buying and selling alone adds up when you factor in real estate commissions, property transfer taxes, legal fees, and movers themselves. If you can’t see yourself staying that long, you may want to rethink your objectives.

3) Stay focused on the house itself, and not the fixtures and fittings. Walls can be painted and kitchens can be updated. If the place is cluttered, look beyond it. All that stuff leaves with the current owner - you need to concentrate on the specifics that stay. Take note of room sizes plus storage and closet space. Don’t worry about keeping up with the Joneses. A dated home will often be one that you can add value to - and that means building equity. Sure, your best friend may have that modern house you admire, but your home can be that too over time. If the kitchen has a good layout and working appliances, that can do for now. Don’t get dazzled with staging. Many homeowners have homes professionally staged and for good reason - it draws away from negatives and creates an inviting environment , but it can cause you to overlook important features. Will your lifestyle really work here? Will those bedroom sizes be adequate?

4) The big ticket items that you may not notice are the ones that are the most important. Is the roof in good shape and well-maintained? How old is the furnace and hot water tank? If it’s a detached home you crave, is the drain tile up to snuff? Faulty drainage can mean basement or crawl space flooding, and that can lead to mould. How is the wiring? The plumbing? These are all items that can be extremely expensive to remedy, so ALWAYS make sure that any offer you make is conditional of an inspection by a licensed and bonded inspector. They can’t find everything, but a good inspection can save you a lot of money down the line.

5) What is the overall maintenance picture? That big back yard may look fantastic, but if you’re not a gardener and don’t want to spend all weekend tending to the lawn, it may not fit your lifestyle. If you’re looking at a condominium or townhouse, check out all the documents regarding the building’s budget, maintenance schedule, and planned spending. A low condo fee can sometimes be a bad thing - meaning that the building is not planning ahead for future big ticket expenses like piping, boilers, or exterior cladding.

6) Be flexible. You may have your heart set on a particular neighbourhood to the exclusion of ones that you never even knew existed. Remember that if you can get 80% of what you’re looking for, you’ve done an excellent job.

7) Book movers well in advance. Moving is expensive, so make sure you have at least three quotes, and check their references. If at all possible try to avoid moving at the beginning or end of the month when movers are the busiest and quotes are the highest.

Finally, remember that this is your decision and your decision alone. That means your opinion is the one that matters - not what your mother in law says, not your best friend. They aren’t paying the mortgage - you are. Too many cooks CAN spoil the soup, and so can too many opinions. When it comes to real estate, it seems that everyone is an expert. When you’re buying, the only experts you need to rely on is your mortgage broker, your realtor, your inspector, and your own good judgement.

Sarah Daniels is a top selling realtor in Greater Vancouver, who has been licensed since 2003. She appears regularly as a real estate expert on shows like “The Marilyn Denis Show on CTV”, as well as local radio and television. Sarah has written two books; “Welcome Home: Insider Secrets to Buying or Selling Your Property" and "Buying and Selling A Home For Canadians For Dummies". She also developed and co-hosted the show “Urban Suburban” on HGTV Canada. She works at Macdonald Realty in BC.

Sarah Daniels is a paid spokesperson of Sonnet Insurance.

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