10 tips for first-time homebuyers

first time home buyersThe real estate market can be tough to navigate for first-time homebuyers.
Here are 10 tips for first-time homebuyers:
1. Determine what you can afford. The first step is to meet with a lender, review your finances and find out how much you can afford to spend on a home and how much you have for your down payment. Experts warn also not to shop for the most expensive home you qualify for, unless you truly can live with the payment that comes with it.

2. Make a list of your criteria and priorities for your first home. Purchasing your home will require compromise and its important that you have thought through what you are prepared to give up to get into the market.

3. Shop for a mortgage. Don’t use whatever lender your agent recommends without doing some independent shopping. Another classic mistake: calling 10 lenders and asking for their interest rates. A lender can’t be held to those quotes. It’s better to look up mortgage rates online, then call three or four lenders and mortgage brokers and ask them for a written list showing their fees.
4. Get pre-approved. Getting a lender to pre-approve a loan before you shop can make your offers more attractive, while avoiding deals falling apart because loans don’t get approved during escrow.
Get all the documentation you’ll need for the loan process –  tax returns, pay stubs, bank account statements. Find out from your lender exactly what you’ll need.
5. Pick an agent who’s right for you. Get referrals for agents from friends and family, then talk to each one. Look for someone with whom you can communicate. Actually interview them as if they were job applicants since, after all, they do work for you.

6. Find a home you can afford. Make a wish list of where you want to live and what you want to have in your home. But don’t fall so in love with a particular home that you don’t see its flaws. Move on if the asking price is unrealistic or the seller is unreasonable. Or if the bidding rises beyond your budget.

7. Scope out the neighbourhood. Your agent likely can provide local school ratings and area demographics. You can get crime reports from local police departments or their websites. Then walk and drive the neighbourhood, returning at different times of the day and different days of the week. Visit local supermarkets to see who goes there.
And talk to the neighbours. That’s the only way to learn about the neighbour from hell, the incessantly barking dog or whether trains blow their whistles nearby.

8. Make a realistic offer. First-time buyers should find out what comparable homes sold for, learn the true value of the property and make a realistic offer. A good agent will be diplomatic, but honest if your offer is too low. If the home is priced right, bid the asking price or a little over. You might, however, run into trouble getting a loan if your offer is higher than the lender’s appraised value of the home. Lenders won’t approve the loan if the appraisal is less than the loan amount.

9. Find a good home inspector. Talk to two or three inspectors rather than blindly accepting one your agent recommends. Get referrals from family and trusted friends to make sure you find someone working for your best interest and who isn’t trying to help his or her friend, the agent, close the deal. Be aware of deadlines during escrow. And respond in a timely manner to the home and termite inspections, seller disclosures and the preliminary title report so you don’t miss your chance to opt out if a problem arises.
10.  Be patient.  Finding a home in the Toronto market is not easy, it takes work, perseverance and patience.  If you stick to the plan, I am confident that you will find that home.  And of course, if you need help with the process, I would be happy to help.

Twenty Something Real Estate – Save Up PayDown

In this video, Amy outlines a great plan to help you save up for your down payment for your first home. Not easy to do, but it is achievable with a little planning!

First Time Buyers Programs in Canada

By Jody Thompson

Do you understand the first time buyers programs in Canada? There is good news for first time homebuyers that have RRSP savings. Did you know that if you are a first time homebuyer, the Canadian government allows you to use money from your RRSP toward your new home? The program is called the Homebuyers’ Plan (HBP) and it allows you to withdrawal up to $25,000 from your RRSP tax- free.
There are a few conditions that apply to qualifying for a HBP. Firstly, you have to intend to occupy the home as your principal place of residence no later than one year after buying it. Therefore, it does not work particularly well for investment properties. The RRSP contributions also needs to have been in your account for at least 90 days before you can withdrawal them. This means that you need to plan ahead.
The government gives you up to 15 years to repay the amount. Not too shabby!
For more information on using RRSPs for your first home, visit the Canada Revenue Agency website at www.cra-arc.gc.ca or reach out to me at www.thompsonsells.com.

Youth Flock to Toronto Downtown Core for Work & Real Estate Decisions

toronto condo scape

By Jody Thompson

We are seeing reversal of the trend set by the boomers – move to the suburbs to raise their families in their McMansions. The Echo boomers are choosing downtown convenience over long commutes to their sprawling suburbia homes.  Our youth is definitely selecting convenience or size.  It really is a combination of I want to experience the downtown life after growing up in the burbs to I do not want to commute for an hour to get to work, my time is too precious, to I can’t afford to by anywhere near the city so I will rent and walk to work.  “Both my of my kids grew up in the suburbs and have elected live in the city and walk to work and they are not alone” says Jody.  “I truly believe that every community offers advantages and the downtown lifestyle definitely offers convenience”

If you are looking to rent or buy in the city, I would love to help.
Please Contact Jody



Tips for Making Stronger Real Estate Offers

How to make a strong offer

By Jody Thompson

Buying properties is the essence of real estate investing. It sounds so easy but those first several investment properties seem to evade new real estate investors time and time again. Why? When looking at what it takes to make a strong offer on a property far too many people focus on one thing, PRICE. While dollars and cents are very important, price is only one component of a winning offer.
Put yourself in the seller’s shoes; of course you want to get the most money possible, that’s a given.But what happens when two offers come in at the same price, how then does a seller decide which offer to choose?

  1. Price: we have already mentioned price and it is generally speaking the first thing considered. A seller wants to receive the most money possible.
  2. Odds of Closing: nothing makes selling a property more frustrating than buyers who cannot perform. Sellers want to accept an offer they are confident will close.
  3. Speed of Closing: we are an impatient society and sellers are especially so. Sellers want to close as quickly as possible.
  4. Ease of Closing: the fewer problems and less potential for problems, the better. Sellers are searching for a pain free process.

With these things in mind it becomes a little easier to figure out ways to to make an offer which will appeal to sellers and give you a better chance of landing the property. Here are some ways to make an offer difficult for any seller to refuse:

Tips for Making Stronger Real Estate Offers

  1. Increase Deposit – earnest money (good faith money) is used in real estate transactions to show the buyer’s intent to purchase the property. The amount or percentage of the deposit varies based on several factors but generally speaking a seller will look more favorably at a larger earnest money deposit, as it shows the buyer is serious, supporting number two in the above list.
  2. Shorter Inspection Period: typical inspection periods vary from market to market but 7-10 days is fairly common. However, if you have a working relationship with a good inspector you will need less time to get an inspection completed which means you can shorten the window on the contract. Being able to complete the inspection process quickly and move forward towards a successful closing helps satisfy number three in the previous list and can help defeat similar offers which move slowly.
  3. Pre-approval Letter: while a cash offer is always king, a pre-approval letter from a lender can help ease any doubts a seller might have about your ability to obtain the funds to close on the property, helping satisfy numbers two and four on the above list.
  4. Fewer Conditions: the less you ask from the seller, the better (in their eyes). Many sellers are eager to move on and do not want to fool with dozens of nit-picky requests. If you are confident in your ability to assess and analyze properties, you may consider making “as-is” offers, meaning you will not ask the seller to fix any issues with property. Sellers are usually thrilled knowing they will not have to deal with fixing a list of problems (large or small), potentially making your offer much sweeter than competing offers.

Making offers on real estate purchases can be difficult, but knowing what the seller is looking for and being able to cater to their desires will put you in the best position to get those great deals under contract. While every seller is a little different and each is in a unique situation, most have the same end goal in mind; to get the most money for their asset, as soon as possible and with no delays or problems. While it seems like a lot to ask for, and clean closings are not always possible, if you satisfy as many of those as possible, you give yourself a great chance to land some real estate deals.

If you are looking to buy a home, I would be happy to help.  Please contact me here.