When I became a real estate agent, I was unprepared for the number of people that had unrealistic expectations for their new home. Instead of sticking with a budget and searching for a modest place, many of my clients stretched their limits, only to be disappointed with what they could really afford. Unfortunately, that reality check takes a lot of time, which can be frustrating to any agent. I want to teach people how to help out their real estate agent. In addition to making their job easier, it can also help you to find the right house sooner than you would otherwise.
If you're on the hunt to buy your first single family home in Canada, you've no doubt noticed that prices are high and inventory is low. How can you get into the real estate market under these conditions?
Here are 3 suggestions for making your first home purchase easier:
1. Buy a fixer-upper in a good location.
This is standard real estate advice for investors who regularly buy, renovate, and resell homes. But it's also great advice for first-time home buyers on a budget. Of course, when you imagine what your ideal home should look like, you may have fantasies of a perfect house that your family will live in for many years. No one sets out to buy a dump of a home.
But first-time home buyers should lower their expectations and find less-than-desirable homes if they want to break into the real estate market. As long as the basic structure of a house is solid and it's in a great location, any stained carpet, ugly wallpaper, or chipping paint won't affect the long-term value of the home. You'll have to put some sweat equity into the dwelling, or hire contractors to do repairs, but when you do, you'll be raising the value of the property and reaping the profits for yourself.
2. Find neighbourhoods that are on their way up
Look in up-and-coming neighbourhoods for good deals. Areas that may have been undesirable in the past are now seeing new buyers sweep up homes that have been neglected. This is due in part to the housing crunch, since home buyers are searching out good deals wherever they can find them.
Many former dilapidated areas should see overall property values rise as a result of this interest in revamping blighted neighbourhoods. Your purchase price will be lower for a home in one of these communities, and if you landscape the yard and repair the home, you can build equity fairly quickly. With the shortage of homes available for sale in many areas of Canada, expect to see far more interest in "bad" locations. Property prices will increase in these areas as more buyers catch on to the great bargains available.
3. Get help from the government.
There are many federal programs designed to help the first-time home buyer. A tax-free saving account allows you to save money with no tax liability if you use the funds to buy or renovate a home. Another home buyers program will let you withdraw money from retirement accounts without tax penalty in order to purchase or build a new home.
There are also government-funded grants and incentives to help you make your home more energy efficient, renovate your home, and purchase mortgage loan insurance. Your provincial government or local town may have even more programs available to help you get into your first home and make it the house of your dreams. You'll find information about federal programs here.
Your real estate agent or broker is the expert on affordable properties for first-time home buyers. They have even more tips to help you break into the real estate market without losing your cool or spending more than you can afford.Share
16 September 2015