Home-Buying Advice You Shouldn’t Ignore
There’s no doubt about it: Buying a home might be one of the biggest purchases you make in your lifetime. It certainly could be one of the most life-changing. When it comes to something as meaningful as this, taking advice from a nosy colleague or well-meaning family member is not the way to go, unless they happen to also be an experienced luxury real estate agent! Here’s our best advice for today’s house hunters: Don’t buy the worst house on the best luxury street. Some savvy buyers opt for this strategy, thinking it’s the best way to score their dream home and add value. Unless you’re an experienced investor, however, this is also one of the easiest ways to blow your renovation budget and end up cancelling out that added value. Instead, opt for a luxury home that meets your needs in a neighbourhood you love. Don’t take financial advice from people without money. Some people feel like they’ve watched a couple of episodes of House Hunters and are qualified to give advice when it comes to home finances. When you’re investing in a property, however, this is not the time to take advice from anyone who wants to give it to you. Instead, work with a trusted lawyer, mortgage broker and financial planner to reach your homeownership goals. Don’t let starting be a hurdle. If you’re ready to make a change in your life, remember that the first step is the hardest. If you spend precious time over-analyzing and obsessively working out the details of your home-buying plan, you risk never getting the ball rolling at all. While a certain amount of planning is healthy, make sure you reach out and take action. A good rule of thumb is to add deadlines to your goals. For example, instead of just “I want to buy a luxury home,” tell yourself, “I want to buy a luxury home in two years.” Be motivated by failure. It can be hard to search for your dream home and feel like you just can’t find what you want or seem to lose out on every bidding war. Keep in mind, however, that every negotiation that doesn’t go your way or showing that ends up in disappointment is an opportunity for you to gain a better idea of what you want. Keep your eyes on your goal and remember that your dream luxury home is out there for you.
What to Know Before Making Your First Offer
When it comes to buying your first home, making an offer that meets all your criteria is a big deal. You are committing to a huge financial investment, and it needs to be taken seriously. While some things may differ from province to province or from city to suburbs, there are some factors that are important to consider no matter which part of Canada you’re looking to buy in. Make sure your financial situation is where it needs to be. Before you can even start looking, you need to know how much you are pre-approved for so you can consider neighbourhoods and homes in your price range. It’s time to meet with a financial advisor who will go over your financial situation, see exactly how much you have available for a down payment, consider your credit score, income and the type of home you want to purchase in order to calculate how much you will be pre-approved for. Without pre-approval, you run the risk of not being able to put in an offer on your dream home. Pre-approvals only last 60 to 90 days and can be revoked at any time should your income suddenly change. Also, tempting as it may be, don’t accept a pre-approval offer you know you can’t actually afford. No one enjoys being house poor. Ask the right questions. Many provinces are considered “buyer beware,” which means the seller can’t hide active problems on purpose, but they aren’t required to tell you about any past issues. This is why having a home inspection and lawyer-assisted searches before you make an offer are so important. The last thing you want to do is rush into signing anything before you know about any potential problems that aren’t immediately obvious. If a problem was discoverable by a home inspector but you didn’t bother to get the inspection before buying it, you are responsible for the repair cost. But even with an inspection, home inspectors can’t move furniture or get behind walls, so there may still be problems you might end up inheriting despite these efforts. Understand exactly what you are signing. It is vital to read the agreement of purchase and sale thoroughly before signing, so you know exactly what you have agreed to buy. People tend to skim over the section that lists included fixtures (attached items such as chandeliers) and chattels (appliances) and just assume that these items are all included, only to be disappointed to find them missing on closing day.
How to Become a First-Time Buyer and a Landlord
Plenty of Canadian first-time buyers choose to buy an income property as a way of offsetting costs. Whether it’s a detached home with a finished basement suite or a condo you plan to rent out for a few years before moving in, being a landlord can be a great experience if you’re smart about it. Diving right into your first home purchase and your first stint as a landlord? It can be a lot. Here’s what you should know: You might lose your first-time buyer rebate. In Canada, first-time buyers are eligible for a tax rebate. If you choose not to make the purchase your primary residence (if you rent it out, for example), you may not qualify for the tax rebate. Ask your real estate agent for more details. Consider diving right in. Many first-time landlords opt to use a property management company to handle things like rent collection and maintenance requests. Though the company may take a percentage of your rental income, this is a hassle-free option that many first-time landlords opt for. However, it can make sense to handle this yourself for the first year, as it allows you to become familiar with the process and understand the ins and outs of your home. That way, when you do pass it on to a management company, you’ll understand their requests. Know the Residential Tenancies Act inside out. In Canada, each province has a separate set of regulations for landlords and tenants, which can usually be found online. Make sure you read it thoroughly to understand both your responsibilities and those of your tenant. Ask an experienced real estate agent to help if necessary. Say hi. Many real estate agents and property management companies will handle applications and reference checks on your behalf, for a fee. If you live in the area, however, it’s a good idea for you to meet the applicants yourself. This gives you a chance to ask questions of your own and test your “gut feeling” about a potential tenant. After all, not everything can be learned from a legal form, and this is a person who will be living in your home. Being a first-time buyer and a first-time landlord doesn’t have to be scary. It does, however, take some extra research and the help of some professionals along the way.
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