House-buying 101.

26Apr2013
Image source: Abby’s Birds by Ellen Schwartz

The CRUNCH:
House-buying 101.

CRUNCH deets:
You’re ready to take the plunge. You only have a little more to save for a downpayment and you’re already dreaming about the closet space, so why not now? But this is the biggest purchase you’ve ever made and it’s kinda overwhelming… so maybe you’re not ready?

The Fix:
Do your home-work.

Fix deets:
Shopping for a house can be completely draining. But it can also be incredibly exciting! It’s worth the ride, but there are a few ways to make that Leviathan feel more like the Ghoster Coaster.

The first thing to do is figure out how much you can afford. Duh! Use any online calculator to, uh, calculate your max before you even think about starting to look. Once you know the number, set your sights lower – MUCH lower. Depending on the desired hood, your ballpark might need to be up to a hundred grand less. This gives you wiggle room for the bidding wars still happening despite what The G&M keeps telling us.

If you haven’t settled on the location, time for the fun to begin! Once you’ve got a figure you can start researching hoods to find your best fit. It’ll help if you’ve already ranked your priorities, which can include schools, libraries, community centres, playgrounds, grocery stores, local transit, your work commute, friends, family, and about a million other things – never mind what you actually want in the house itself! Narrow the map down to at most three pockets, otherwise you’re just wastin time. And although the hood will likely determine what type of house you’re buying, keep in mind any specifics you absolutely have to have and what you’re willing to compromise on. Would a House & Home styled pad with no parking beat a mid-nineties reno with a double-car garage? Only you can decide! Know what you want but keep an open mind; you never know what you might be passing on if you’re only looking on paper, or, er, screen. If you like browsing, go to as many open houses as your spouse/kids/schedule allows – the more you see that you don’t like the easier it’ll be to boldly declare when you’ve found The One.

If you can swing it, which means if you’re close enough to keep an ear to the ground and do a little legwork, don’t use a buying agent. The info they provide is easily available online and the selling agent can give you a tour if you can’t make an open house or wanna go back for seconds. When it comes to negotiations a selling agent smiles upon an agentless buyer. Now, we’re not saying there’s any funny business going on… or are we? There was a bidding war on our west Toronto house four years ago and somehow we snagged it for much lower than expected. Coincidentally, or not, we were the only bidders without an agent. The selling agent pocketed a pretty sweet bonus by representing us in the deal (and not having to share the commission). So… there might have been just a little more incentive for her when she pitched our offer to her clients. Conflict of interest much?

Get your mortgage preapproved before you’ve set your sights on anything. Unless you have an inside connection, don’t bother going with one of the big banks: no matter how much you shop around you won’t get a rate lower than a mortgage broker. Ask trusted friends and colleagues if they can recommend anyone; if you’re looking in the GTA you can contact us for an awesome referral. Your payments should be accelerated bi-weekly, and read the fine print on the max periodic payments and annual increases you can make… never know when you might win the lottery!

If you’ve been looking for far too long and not finding anything, or you’ve lost count of how many of your offers have been rejected, try not to get discouraged. But pay attention to your mental state so you can decide when you need to pause, re-think your wish-list, or take a shopping break. One of the worst ways to buy a house is if you’re emotionally charged: offering too much because you’re too tired to lose again or too proud to walk away.

Remember this:
The decision to buy something you’ll be paying for over the next decade or three is not one to take lightly. But once your ducks are in a row you can pick a winner and rest easy. It may be the biggest investment you’ll ever make but, it’s still just a house. When the new home magic wears off you’ll be as happy there as you would be anywhere. It really doesn’t matter if the ensuite only has one sink… as long as there’s a dishwasher.

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