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HOMEFINDER PENINSULA: First time buyers should be realistic
By Andrea Peacock/News staff
Asking the right questions and being realistic about the ideal dream house are some things first-time home buyers need to be aware of, says local realtor Jeff Bryan.
“First-time home buyers need to understand all costs associated with buying a house,” said Bryan, real estate agent with RE/MAX Camosun in Sidney.
Someone might get pre-approved for a $500,000 mortgage but might forget to factor in strata fees, for example.
“They won’t think of those strata fees as part of their qualification process for getting a mortgage, but it is,” said Bryan.
“You’re assuming you can buy for $500,000, but if there is a strata fee, you can’t understand all the costs associated.”
Getting pre-approved for a mortgage is the first thing buyers should do before looking at listings, said Bryan.
“A lot of times people will be surprised at what they’re actually qualified for, especially now with interest rates being at historic lows,” said Bryan.
“What people can qualify for is usually a very pleasant surprise.”
However, being approved for a $500,000 house does not mean buyers should be looking to max out their budget. Bryan advises spending no more than 10 per cent under the approved amount.
“You don’t want to be house poor,” said Bryan.
“Yes you’re approved at that level, but that could mean Kraft Dinner and tuna for the next five years.”
One mistake many first-time home buyers make is falling for a house in need of lots of repairs.
“First-time buyers should be wary of the fixer-upper unless they are qualified to do the work themselves, because that can turn into a real money pit,” he said.
“All of a sudden you’re $100,000 in [debt], living in a crummy little house because you can’t afford to fix it up.”
Another common mistake made by home buyers is not working with a real estate agent, even though it doesn’t cost them anything, said Bryan. Buyers do not need to pay realtors commission, unlike sellers.
“Realtors make it look like a simple process,” said Bryan.
“But there’s lots of things the realtor does behind the scenes to protect the buyer.”
Realtors may also help buyers find out about properties for sale before they become public.
“We find out about listings a couple days before they go on the market,” said Bryan.