Tips on Buying Your First House?
 

Just trying to get an idea of where to start. Any feedback would be great! Thanks!

Buy low, sell high.

Don't forget to budget for closing costs.

Here are some examples of closing costs - there may be more depending on your situation:

1) Property transfer tax
2) Legal fees
3) Property tax adjustment

Don't over extend. Borrowing extra $$$ to buy something nicer means you owe more $$$ and when interest rates go up, it means each month you will have to pay more $$$ back to the bank.

Don't fall in love with the first place you look at. Try to look objectively because once you buy it, it will cost you $$$ to sell it when you find out this place isn't "the" place you had in mind.

Get a good home inspector. Don't look on CL for the cheapest one, but find one with lots of experience and good reviews. In the grand scheme of things, the amount of $$$ you spend on one may save you that much $ or more on future repairs/headaches.

when looking at your monthly mortgage payment

take in to account living expenses: food, insurance, car insurance, gas, phone bill, tv bill, utility bills, clothing. shit adds up fast

Any tips on how I can save dollars in between the lines? Also this will be my first time buying what other things should I look out for? Would it be better to buy land and build on top from scratch than to buy a house a couple years old?

Any feedback would be great! Thanks.

Where to start?

Read the, like, 20 threads on RS about buying real estate.

if you know your realtor they can agree on a smaller percentage. mine is a family friend whom i've used more than once so we have a relationship.

if you have at last 20% down payment you can avoid having to pay for CMHC mortgage insurance.

if you have RRSP's you can use i believe it's up to $25k (don't quote me on value) towards your home if it's your first home (you'll have 15 years to put it back) i won't go in to too much details on it. your bank can explain it in greater detail.

it sounds like you don't have any construction or construction management experience. unless you know a trusted general contractor to do the job for you, i would avoid getting involved, but that's my opinion. there's others on here with detached resi experienced that can comment better than i.

what she said

Look at many, many houses before you decide.

Take your time and enjoy the process.

It would depend on what you're looking for in a house/plot of land and how soon you want/need to move in. Personally I would prefer to build a house instead of buying one that's already standing, mainly because I can customize the design to my needs and I can check on the progress to make sure shit is being done properly. However, building a house can get very expensive, especially when shit starts going sideways (not to mention the issues that occur when you choose poorly and get a shitty contractor [like my roommate's parents did] or even sub-contractors). Failed inspections mean more work, which in turn means more money to fork out for man hours and material. And if the contractor decides not to pay the sub-contractors, they can put a lien on the house even if you've already paid the contractor.

Conversely, if you buy property with a house already standing, especially if it's an older lot and house, you can theoretically get more square footage (both in land and housing) over a newer house. Older houses do tend to cost more for maintenance (roof, hot water tank, etc), but depending on the design and construction date it could theoretically be far more reliable and have better bones than most new houses.

i like to pay attention to finishing in new/reno'd homes when i go to open houses. some easy stuff to spot easily makes me suspect if someone doesn't take the time/care to get the visual end product correct, they didn't take any care on the important functional stuff that you can't see.

And after you narrow it down to a couple of places, go back to it a few more times to make sure it's the right 1. I went to mine at least 5 times before I decided.

Agreed, my parents are in the middle of building one and they so regret it. My dad has 40 years of construction experience but building in an area that is booming has been a huge challenge.

what difficulities have they ran in to? getting the subs to man power up on schedule, but can't b/c they're spread too thin in a booming area stretching out the construction schedule?

My dad moved back to Sask. to open up a new office for a BC Steel Framing/Drywall contractor that is expanding and he's picked up a lot of work over the last 2+ years. I would guess 80% of his labour is flown in from BC and Alberta as they can't find anyone skilled locally, most locals go potash or oil where the extreme money is. He's been experiencing the samething with his home build, he can't get subs and even when he does they don't show up when they say they will. They are also charging at least double what the same work would cost here.

Another thing to consider when buying your first place is are you currently renting or moving out of your parent's place.
If you are renting, how much furniture do you have?
If you are moving out of your parent's place, how much furniture will you bring with you?

When I first moved out, I had nothing. Had to buy a new bed, new table, new tv, new plates, knives and forks, and most importantly toilet paper. And all this cost $$$. Each item might not seem like a lot, but once you add it up at the same time, the cost is up there.

I recently bought my first home and considered this option as well, but after some math and research, I was quickly turned off by the idea.

To qualify for a mortgage on an empty lot, the bank (TD) said I needed to put 50% down, just to buy the land - this doesn't include financing the build (an additional $300-$400k).

Obviously, your financial situation is different, so it could work for you.

In the end, I bought an older home and had a thorough home inspection done and I couldn't be happier.

As someone who has just gone through this process, there are 3 things I recommend.

1) Get a good realtor - someone you trust and can close a deal
2) Get a good mortgage broker - they do mortgages every day and know what the real rates are, not what the banks offer you
3) Get a good home inspector - call around and interview them, see what they offer and choose the one you feel most comfortable with

This on top of doing your due diligence (e.g. multiple viewings of the same property, neighboring properties in the area, speaking to the neighbors, proximity to schools, transit, shops, etc) as others have mentioned in this thread.

Best of luck in your house search!

Bump... from today's copy of the 24 Hrs newspaper:

http://www.majhost.com/gallery/Bryan...s_20130926.jpg

Land appreciates in value over time, the structure doesn't.

Hypothetically, let's say your budget is 750k. If your options are a newer home with granite/hardwood (aka wife/gf/random pleasers) on a 5000 sq ft lot or an older home with regular countertops/carpet on an 8000 sq ft lot I recommend you choose the latter and make upgrades yourself as you go along.

Obviously, thats a pretty blanket statement but just remember my first point.

I am going thru this one right now and that's unemployment.

you have to make sure what your bottom line is. IF one of you loses your job, are you still going to be able to sustain your lifestyle. Will your wife / gf pay? Are you over borrowing where you can't afford your house AND a car.

Lastly, don't focus on the ultimate goal on the house, focus on how you're able to get by 4 yrs from now when the interest rates goes up. That means an extra 200 bucks a month on a mortgage. 200 seems like nothing a MONTH, but that's over 2000 a yr. Do you SAVE 2000 a yr?

Good questions to be asking, either yourself or anyone but your realtor and mortgage broker:

(Building on what numbers here said :) )

How much can you afford?
When one person loses their job?
When interest goes up
If house values fall? Will you be in negative equity? How much can they go down before negative equity?
If utilities go up?
House repairs? How much can go wrong at once before you eat sardines? I'd want to know that number.

Do ALL of this before you: look at pretty houses on the internet, and talk to the pretty realtor that does this for commission only. The mortgage broker too, is commission only.

It's super easy to get the wow factor going when you are standing in what could be your kitchen.

I tend to look at these spreadsheets backwards from most. A lot, and I mean a LOT of people do these spreadsheets to justify what they want to do..."I can afford 2k per month, and set aside 10% for a rainy day and finance out at 5% downpayment up to 5% interest...let's go shopping!"

Be smart and you'll be fine. Your realtor does NOT share your interests in all things. They want a sale, and they want it to happen quickly. They are starting to get worried. If they say different, they are lying to you.

Everyone will show you graphs where its a balanced market with a slight advantage to a buyers market. If you are selling, they'll show you a graph where its balanced with a slight advantage to a sellers market.

It is currently a buyers market in Vancouver. Yes, people are getting a little dumb on locking in on their guaranteed rates and inching up the prices to get the house on time, but overall there is a lot of price reductions happening that signals overall, people are motivated to sell.

Look for properties that they didn't buy at a high price and thus aren't willing to take a hit. You'll be negotiating against history until the end of time.

Just go with many option and select the most suitable one..
It will give you the most from those which are available to you..

Well, My suggestions when buying a first used house:
-my father always told me that within the first 10 steps of walking in, you can "feel" as if this is the house right for u. If you don't have that feeling then u obviously don't love it. And since this is one of the biggest purchases in your life then you should love it! You're gonna spend lotsa time in it!
-the nagging questions/concerns you have during the open house will inevitably come back to haunt u when u sell it. For example, you think that the big telephone pole is blocking your view or the sloping driveway to ur garage may be problematic during winter season
-patience. The first place you buy is crucial. If you rush to get a home simply out of competitiveness, you may rush and purchase a bad house that u may regret when the dust clears. And if you find a nicer place to upgrade in he future, remember that u will first need to sell your crappy house for the funds to get the new house you want. All within roughly the same time frame. Unless you luckily find the right buyer for ur old house in time.
-during the open house have a look at who your neighbours are and what they are like. Are their lawns well kept? Are the hoarding junk in their backyard? Do they seem friendly? The house is part of it but its important to look beyond the house but the neighbourhood and its culture. Do u see yourself integrating and being a part if it?
-a good house in a bad location won't supercede a bad house in a good location. You can replace that leaky roof but u can't move that noisy highway running by your backyard. That's it for now


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