1. Know Your Budget

The first step in buying a home is knowing what you can afford. Being realistic about your finances helps you set realistic expectations and prevents you from falling in love with a home you can't afford. Here’s how to assess your financial situation and set a budget:

Assess your Income and Expenses

Begin by calculating your monthly income and expenses, including debts like student loans, credit card debt and car payments. This will give you a clear picture of how much you can allocate toward a mortgage.

Determine your Down Payment

Most lenders require a down payment, typically between 5% and 20% of the home’s purchase price. Saving for a larger down payment can help you secure a better mortgage rate. In Canada, the minimum down payment depends on the home price:

• 5% for homes under $500,000 (plus mortgage insurance).

• 10% for the portion between $500,000 and $1 million (plus mortgage insurance).

• If the home costs over $1 million, a minimum 20% down payment is required.

  For any mortgage, if you put down 20% or more, you won’t need mortgage insurance.

For example, if you're purchasing a $750,000 home, the minimum down payment would be:

• 5% on the first $500,000 → $25,000

• 10% on the remaining $250,000 → $25,000

• Total minimum down payment → $50,000

This down payment structure applies as long as you're getting an insured mortgage through CMHC, Sagen, or Canada Guaranty. Use Mortgage Calculator

Online mortgage calculators can help you estimate monthly payments based on different home prices, down payments, and interest rates. This will help you understand what you can realistically afford. Here is a mortgage calculator you can use to help you establish a better idea of what your payments may look like: https://wowa.ca/calculators/mortgage-calculator

Factor in Additional Costs

Don’t forget to include additional costs such as property taxes, homeowners insurance, maintenance, and utilities when setting your budget.

2. Get Pre-Approved

Mortgage pre-approval is a critical step in the home-buying process that can save you time and give you an edge in a competitive market. Here’s why pre-approval is beneficial and how to get started:

Stronger offer Sellers take your offer more seriously if you’re pre-approved.

Know your price range Avoid wasting time looking at homes outside your budget.

Speed up the Buying Process

Pre-approval streamlines the mortgage process, allowing for a quicker closing once you find the perfect home.

How to Get Pre-approved

Contact a mortgage broker or lender, who will assess your income, credit score, and debts to determine how much you qualify for. If you are going to your bank, please ensure you also speak with an independent broker to see what other lenders are offering, to ensure you get the most competitive rate.

3. Identify Your Needs and Wants

Before you start house hunting, create a list of must-haves and nice-to-haves for your future home. This will help you stay focused and make decisions more easily.

Consider your Lifestyle Think about your current and future lifestyle needs. Do you need a home office? A big backyard? A short commute?

Prioritize Features List essentials (e.g., number of bedrooms, location) separately from wish-list items (e.g., a renovated kitchen, a view).

Be open to compromise While it’s important to know what you want, be open to compromise. You may need to adjust your expectations based on what’s available in your price range.

4. Research Neighborhoods

The area you choose can impact your lifestyle and investment potential.

Commute & Amenities

Check transit options, parks, shopping, schools, and healthcare facilities.

Visit at Different Times

Explore the neighborhood during the day, evening, and weekends to get a feel for noise levels and traffic.

Future Development

Look into planned infrastructure projects or rezoning that could impact home values.

Safety & Schools

Use city websites and local resources to research crime rates and school rankings.

Assess Proximity to Work and Amenities

Consider the commute to work and proximity to schools, parks, shopping, and other amenities important to you.

Explore the Area

Visit neighborhoods at different times of the day to get a feel for the area’s vibe and noise levels.

Check Safety and Schools

Research crime rates and school ratings in the area. Websites like GreatSchools and local police department websites can provide valuable information.

Future Growth and Development

Look into any planned developments or changes in the area that could impact property values or your quality of life.

5. Work with a Real Estate Agent

Can provide invaluable guidance and support throughout the home-buying process.

A knowledgeable agent (like me! 😉) can be your biggest asset.

Expert Guidance From market insights to negotiations, an agent helps you avoid costly mistakes.

Finding Hidden Gems

Agents often have access to listings before they hit the market.

Handling Paperwork Real estate contracts can be complex. A good agent ensures you understand everything before signing.

Communication is Key Ensure your agent understands your needs and preferences and maintains open and honest communication throughout the process. Remember, you are in the drivers seat, the realtor is there to support, inform and educate you to make the best choices.

6. Conduct Thorough Inspections

Home inspections are crucial to uncover any potential issues with the property and avoid costly surprises down the road. Inspectors point out small issues that the owners are more often than not, willing to fix to close the deal. The inspection usually pays for itself and is well worth it.

Hire a Qualified Inspector: Choose a licensed and experienced home inspector to thoroughly examine the property’s structure, systems, and overall condition. They will go in-depth and test out all the appliances, windows, plumbing, roof, and more.

Review the Inspection Report:

If issues arise, you may negotiate repairs or price adjustments.

Use the Inspection Report

Use the inspection report to negotiate repairs or adjustments with the seller, or decide whether to proceed with the purchase.

Review Strata Documents (for condos and townhomes):

Understand the financial health of the building and any upcoming special levies.

7. Negotiate Wisely

Negotiating the purchase price and terms is a critical aspect of the home-buying process. The right negotiation strategy can save you money and secure better terms.

Understand Market Conditions

In a seller’s market, offers need to be competitive. In a buyer’s market, you may have room to negotiate.

Go Beyond Price

Consider negotiating closing dates, repairs, or including appliances/furniture in the deal.

Lean on Your Agent

A skilled negotiator can help you get the best value.

Make a Competitive Offer Work with your agent to make a strong offer based on comparable sales in the area. Avoid lowball offers that may deter the seller.