When is it Time to Buy Your First Property?
We tend to track forward momentum in life by a few key milestones—first job, first car, first home—but in reality, there are no one-size-fits all markers of success. Existence can be far more exciting when we opt to follow our own timelines. That said, purchasing real estate, whether for you, your family, or as an additional source of income, can be a point of pride and something to celebrate. If you’re keen, you may be deliberating over one specific question: when is the right time to buy your first property? Here are a few indicators that you’re ready to take the leap.
You're in a Good Place Financially
First-time buyers are often surprised by the additional appraisal and inspection costs that can come with a home, not to mention repairs or renovations. From land transfer taxes to closing costs, home buyers should anticipate outlays beyond the property’s listed price. Ensure that you have enough on hand to cover the fees on your fantastic new space.
Through my experiences over the years, it's crucial for first time buyers to speak with lenders early in the process - this will help them to determine their potential loan eligibility. There's a great opportunity that as the process of buying your first property unfolds you'll see your financial literacy skills increase on a grander scale - this could undoubtedly lead to more opportunities.
You've Been Paying Attention to Market Trends
The real estate industry is cyclical: over time, prices rise and fall. Have patience when entering the market, and purchase at a time that is favourable to buyers. Even if you’re looking to buy a property as an asset as opposed to a home, you’ll still get the best return on your investment if you can purchase during a market lull—and can wait to divest until a later high.
In today's market purchasing a home isn't so clear cut. There have been a number of regulatory changes in the Toronto real estate market place. We've seen over the last year the implementation of the Fair Housing Act, interest rate hikes by the Bank of Canada (BOC) and further implementations of mortgage stress tests which came into effect on January 1st of this year. With a Provincial Election in the mix and key macro-economic events on the horizon (re-negotiation of NAFTA, Oil Price volatility, etc) a climate of volatility and government intervention may be on the horizon for the next few years. Today, more than ever, it's important to keep up-to-date on all information - not just on home prices.
You Have a Clear Idea of What You're Looking For
Have high standards and a clear idea of what you want—but don’t be lured into overpaying once you find it. Similarly, waiting and waiting for the perfect fixer-upper opportunity can be a poor approach when you don’t actually have the renovation savvy to turn it into your dream home. First-time buyers have a tendency to get so excited about the prospect of purchasing that they overpay during negotiations. Go in with a clear head and keep your cool.
Your Lifestyle Needs a Leg Up
Your dream home should be a reflection of who you are, while also taking your lifestyle to the next level. Are you shoving the best pieces of your wardrobe into tiny hallway closets? Is it time to move to a livelier neighborhood or put down roots near friends? Are you crowding guests onto tiny balconies, and would you give anything to have a second bathroom? It’s important to clarify your expectations and how you want to live: the right house near the right amenities can greatly enhance your quality of life.
You're Ready To Go All In
Potential buyers are just that: potential buyers. If you’re serious about purchasing, take steps to make it happen. Know what local rates and prices look like, study the rental market, research bylaws and board rules. Leveraging your intel at the time of purchase will help you feel confident during negotiations and eliminate the risks of hasty or hesitant decision-making.
You've Consulted a Real Estate Expert (Ehhem... ME!)
Nobody knows the market better than a seasoned real estate professional, like me. Seriously, partner with a professional who understands how your goals and concerns may differ from those of other clients, so when you do buy, you’ll know it’s the right fit. Interview industry professionals, it's the best way to get an idea of the representatives skill set. Your representative should exhibit patience, professionalism, strong market knowledge and most importantly the ability to negotiate in your interest.
With one of the biggest international transfers of wealth in history on the horizon, there will be more potential for smart luxury purchases than ever before. Whether you’re among the next set of live-in home buyers or looking to pick up the perfect penthouse for some lucky tenants, purchasing a first property is sure to put you in solid standing for future success.