Buying a home can be intimidating, especially for first-time buyers. How can you be sure if and when to proceed? Below are a few things to consider. At the end of this article, you’ll find related links.
- Recognize when to buy. As real estate prices rise and fall over time, it’s only natural to want to purchase at the best possible price. Plummeting oil prices have resulted in a buyer’s market for real estate here in Newfoundland.
So, is now the right time?
Here are a few things to think about:
A CMHC report released in the Fall of 2015 states that home prices are expected to increase about one percent in both 2016 and 2017. And, according to MLS statistics from CREA, home sales in Newfoundland for February 2016 were up more than five percent over the same time last year, and almost ten percent in St. John’s specifically. Furthermore, the number of listings have decreased about one and a half percent.
What does this mean? Put simply, it suggests that the local real estate market may be warming up. In a CBC article published in July 2015, CMHC senior market analyst Chris Janes said that sixty percent of home purchases were by first-time buyers. This may indicate that the slow down in activity along with the stabilization of prices is being recognized by first-time home buyers. And it may suggest that things are on the upswing in this particular segment.
- Be aware of opportunities. First-time home buyers in Canada may be entitled to claim a $5000 tax credit. In addition, the Newfoundland Labrador Housing Corporation has a Downpayment Assistance Program, which offers eligible applicants a loan of up to five percent of the value of the property. Such opportunities can help make the decision to purchase that much easier!
- Be Prepared Financially. In determining how much you can afford to pay, be realistic. Calculate all your monthly expenses in addition to the mortgage payment. These will include utilities, taxes, insurance and maintenance on the home. In this regard, you may consider purchasing a home with a basement apartment to help with covering those costs!
- Use a Home Inspector. The decision to purchase a home can be daunting for anyone. As a first-time buyer, your inexperience can have you second-guessing yourself. You may find yourself asking, “Is this home a good value, or will it wind up being a money pit?”
A great way to help put your mind at ease is to draw upon the knowledge and experience of industry experts. No doubt, your Realtor can help here. However, an extra level of assurance can be gleaned by having a professional home inspection done. A home inspector looks for hidden structural or safety issues within the home and identifies any deficiencies that may not be readily apparent. A ballpark figure to having an inspection done is $500, however, it’s well worth the cost. Not only will it offer you peace of mind, but you may be able to use the inspection to negotiate a better purchase price!
- Use Street Sense. There’s an old adage that says it’s better to buy the worst home on the block than the best. That’s because adjacent property values have a spillover effect. If the homes surrounding your property are more expensive, it adds to your home’s value. Conversely, an expensive home in a run down neighbourhood will be negatively affected. Of course, in many neighbourhoods, this is not an issue. But, as you begin your home search, it’s something to consider.
- Stick to Your Plan. The emotional roller coaster that goes along with deciding to buy a home can sometimes lead you astray. This is especially true when it’s a buyer’s market; with so many options open to you, you may lose focus and begin considering a purchase outside your comfort zone. Exercise caution, and don’t let emotions get the better of you. If you stick to your original plan, you’ll be happier with your decision in the long run.
- Relax! While this may be easier said than done, it’s important to remember that your purchase decision will be based not only on your own goals, but on the experience of the people around you. Your Realtor has been through this process many times and can offer the guidance you’re looking for. Seek advice from family and friends, too! These people care about what’s best for you, and many will have gone through the process themselves. Their input can be invaluable in terms of peace of mind as well as helping you make a sound investment!
LINKS related to this article:
NLHC Downpayment Assistance Program
Canadian Real Estate Association (recent statistics)
First-Time Home Buyers Tax Credit
CBC Story: First-time buyers drive housing market
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