Making the decision
When you set out to buy a house, there are a lot of things you need to consider and a number of decisions you should make before you ever look at a property.
It doesn't matter whether this is your very first home purchase or whether you have owned several homes — the things you need to decide are always the same.
How much can you afford?
When everything is considered, only you can answer that question. How much of your income do you want to commit to a mortgage? How much do you want to have for hobbies, travel, leisure activities, a boat, a cottage, education for your children? How much of your income are you willing to spend on house expenses, the mortgage, insurance, utilities, property maintenance, and landscaping. These are all things you need to calculate into your budget — and ultimately, take into consideration when you start looking at homes.
Pre-qualify for a mortgage
When you have determined how much you are willing or able to spend on house expenses, make sure your mortgage lender agrees. You can go through a mortgage broker or through the financial institution of your choice. A few minutes with a loan officer and a credit check will let you pre-qualify for a mortgage. That means the financial institution will commit to a maximum they will loan you on a mortgage, and that lets you determine how much you can afford to pay for a house. Of course, the more you can put on the down payment, the more you can afford to spend on a home. (Don't forget to consider the other costs associated with closing the purchase, as well. (Planner attached)
Pre-qualifying for a mortgage will take a lot of the uncertainty out of house hunting, especially when you find that perfect home. As you prepare to make an offer, you will already know how much money the mortgage lender is willing to give you. (The mortgage company may still want to approve the specific house to make sure that the price you are willing to pay truly reflects the value of the property and that the property is in acceptable condition.)
Decisions, Decisions
Now you know how much you want to spend on a house and how much the mortgage company is willing to finance. (Remember, these numbers may not be the same. You may well qualify for a much bigger mortgage than you want to pay, because of those other lifestyle considerations.)
It is time to make some decisions. There are hundreds, maybe thousands, of properties on the market in all sorts of locations, in all sorts of styles, in all sorts of condition. Where do you start looking?
Narrow the field. Create a list of criteria such as:
- Price
- Size
- Location: neighbourhood, access to parks, schools, shopping
- New or old
- Single family or multi-residential
- Condition
Consider each of your criteria independently first.
Price
This is, of course, the first and single most-important decision. And by now it should already be made. Set a preferred range on the price you want to pay, and then set an upper limit — the highest price you are comfortably willing to pay. There is no sense in looking at a $300,000 house if you know $175,000 is your upper limit. However, if your preferred range is $175,000 but you could go as high as $200,000, then you know what price range to look within.
Size
How big a house do you need? If you have a big family, you obviously need room for everyone. If you are just starting out you may want room to accommodate a future family.
How big a house do you want? Sometimes you want a bigger house so that children or grandchildren can visit or to accommodate treasured family heirlooms, or to provide room for hobbies.
How does the house fit into your lifestyle? If you want to travel, spend winters in Florida or summers at the beach, do you want a big house with lots of housekeeping and maintenance, or would you prefer a semi-detached home on a smaller lot, or a townhouse, or a condominium?
If you like to entertain, is there room for your guests? If you like do-it-yourself projects or gardening, does the property offer you those opportunities? Is it time to get into a bungalow and eliminate stairs?
Location
Where do you want to live, in town, or in the country? Do you want your home on municipal services (sewer and water) or are you comfortable with a well and septic system? Do you like privacy, or do you like neighbours close by?
If you want to live in the country, do you want a farm — a working farm or a hobby farm? Do you want 100 acres of your own private wilderness, or do you want an estate-sized rural lot? Are you looking for open fields or forest? Do you want rural waterfront or escarpment view?
What kind of neighbours do you want? Are you comfortable with working farms all around you or do you want a more natural environment?
How close, or how far, do you want to be from urban amenities like the corner store, entertainment, restaurants, shopping?
What type of winter conditions are you ready for? Do you want a well-maintained road that is plowed frequently and kept open, or are you willing to live on a quieter road that has less winter maintenance? That peaceful country lane might be difficult to travel in the snow. That panoramic view may be wide open to the full force of winter storms.
If you want to live in an urban area, a whole new range of questions open up.
- Do you want to live in a newer neighbourhood or subdivision, or do you prefer an established neighbourhood with older homes?
- Is it important to be near the schools?
- Do you want to be able to walk to church, the corner store or to downtown?
- Is having a library or art gallery close by a consideration?
- Do you want to be near parks or walking trails?
- Do you need quite streets and sidewalks for the children, or are you comfortable in a busier, higher traffic neighbourhood?
Condition
Do you want a house you can move into with minimal work, or are you looking for a "fixer-upper" that you can repair and decorate to your own tastes?
Are you handy around the house and able to take on most of the work, or do you need help when it comes to plumbing, electrical, carpentry and general repairs?
Even if you are handy, how much time do you have or want to spend on home repairs?
Narrowing the choices
As you can see there are a lot of decisions to be made, or at least considered, before you ever do your first "drive by."
Is the perfect house for you "out there somewhere?" Maybe, but more likely you will have to take all the things you have considered, prioritize all the preferences you have decided for your perfect home, and look for the appropriate balance. Price, and what you have decided you want to spend, will help you narrow the choices in the beginning. After that, only you can decide whether condition is more important than location; whether a townhouse near the school and the park is preferable to a single-family home close to shopping; whether the "handy-man's special" in a quiet neighbourhood is a better choice than the new home on a busy street.
Make a list of all your decisions, then list them in order of importance. You will quickly see what type of home you are looking for.
Be prepared to compromise, somewhat. This is one reason why you should have a preferred price range and a maximum. Maybe that perfect home for you is a little over your preferred price range. It may be worth going closer to your maximum to get the other features you want. On the other hand, maybe you will choose a home that needs some minor repairs and decorating in order to get the location or style you prefer.
As you begin to select houses to view, consider several options based on the various criteria you have selected. Look at houses that are a little below and a little above your preferred price range so you can compare features and value and to make sure that the home you ultimately select is appropriately priced for the market.
Attend open houses for properties you might be interested in. This is an opportunity to have an initial look at an attractive property and to compare features of homes you are considering.
When you attend an open house, you will probably be asked to identify yourself. Don’t look at this as a high pressure tactic. Remember, someone is letting you into their home; you wouldn’t want strangers going through your home without knowing something about them.
When you have made a selection and are preparing to make an offer, you may be uncertain about the price you are preparing to offer. If you have any concerns about the price you are offering, it is appropriate to make your offer conditional on having an appraisal done. This will assure you that the price you are offering is within the current market range for this type of property.
As you narrow your choices, look carefully, not just at the houses but, at the neighbourhoods. Drive past the house and through the area several times at different times of the day and night to see the impression the house creates as you drive by. Approach the neighbourhood from different directions so that you can see the traffic patterns at different times. Walk through the neighbourhood to get a "feel" for the area. Check for lighting in the neighbourhood at night. If possible, talk to neighbours to see how they feel about their neighbourhood.
Look carefully at the house
Create a checklist of things to look for and features you want before you go through a home. Do a walkthrough to get an overall impression of the house, then go back slowly, room by room, to examine the condition and the features. Follow your checklist and make notes of things you like and things you don't like to help you remember when you talk about the house afterwards.
Go back at least one more time. Make a slow, careful tour of the home. Consult your notes. Look for answers to the questions you thought of after your first visit. Check the condition of each room - the walls, flooring, windows, woodwork or trim. Make yourself as familiar as possible with the condition of each room.
Look at the general housekeeping. Is the house tidy or cluttered, clean or dirty? These conditions will give you a clue as to how well the house has been maintained and will also give you some idea of the conditions to expect when you move in.
Check the plumbing. Are there water stains in the sinks or toilets? Flush the toilets and run all the taps. Do they drip or continue to run?
How old is the water heater? Is it owned or rented? Are there any signs of leaks?
Check the furnace. How old is it? Are the filters clean (another sign of housekeeping and maintenance). Turn it on, even if it is summer. Is the fan noisy or does it operate quietly and smoothly?
Check any other appliances that go with the house. Dishwasher, fridge and stove, water softener, central air. What is their age, general condition, appearance?
Walk around the outside and look carefully at the exterior maintenance. Is the siding in good condition? Does the house need painting? Are the eaves troughs and downspouts in good condition? Again, you will get a good idea of the overall maintenance on the home from these observations.
Check the basement and the foundation for signs of water damage or dampness.
A word of caution
Usually finding the right home for you involves a number of compromises. Some of the compromises are easy to make. (The living room is perfect, but the den is too small. Oh, well we can live with that.) Others will take more serious consideration. (The house has wonderful character but it needs a new electrical service and wiring.) Only you can balance these considerations and decide whether the house has true value for you. List these pros and cons on a sheet of paper and weigh each against the others in a thoughtful manner before you decide.
It is human nature to "fall in love" with a property that has something that really appeals to you. It may be one special feature (a swimming pool or a beautiful English garden); it may be the style of the home or the neighbourhood; it may even be some intangible feeling you can't really describe. You are looking for a new home. You and your family are going to live there. You want to love it. But remember that love can be blind. Make sure you consider, carefully, all the elements of the home you are buying and weigh all the factors equally.
No matter how carefully you do your homework before you start looking, you will always discover factors you didn't consider. Always keep an open mind. Even though you know "exactly" what you are looking for, you may find that ultimately your "perfect" choice is something you didn't consider in the beginning.
Legal considerations
There are many legal considerations that go with the purchase of property. When you set out to find a home through Propertyshop.ca, you will work with your lawyer to make sure the technical legal details of an offer to purchase are handled appropriately. Your lawyer can guide you through the drafting of an offer and establishing conditions (financing, home inspection, selling your current property), or any other appropriate condition.
Your lawyer can also advise you on a number of legal areas that may need to be considered. Following are some examples of issues where your lawyer can provide advice.
Water
If you are not on a municipal system, you will require water testing of the well or shore water supply to make sure you have a supply of potable water. The Ministry of the Environment requires three tests be taken at least two weeks apart and this may change with weather conditions.
Septic
Septic systems must have the approval of the Public Health Unit and/or the municipality. Ensure that the septic system is working properly to avoid future problems.
Access
In many rural areas, there are roads that have no winter maintenance — the municipality does not plow the roads. Make sure you know whether your road is plowed and maintained year round.
Environmental concerns
If the property was formerly a farm or was used agriculturally, there could be pollutants or buried fuel tanks that could present a future environmental problem. These need to be checked out.
Boat houses or docks
Boat houses and docks often need to intrude into the water. It has to be determined if they have legal title to the waterline or if they are simply an existing structure.
Shore road allowances
If you are buying waterfront property, the potential for shore road allowances needs to be reviewed with your lawyer. Often road allowances were created around large bodies of water and you need to know whether this is a concern for you.
Zoning
You should confirm the zoning of the property to make sure the use fits the zoning and is not a legal, non-conforming use. You also need to see what the zoning will allow if you plan to make any changes in the use of the property.
Have a home inspection
Finally, make your offer conditional on a home inspection. No mater how carefully you look, there is nothing like the assurance that comes with having a professional evaluation of the condition of the home.
A final thought
House hunting is challenging. It requires careful attention to detail and good decision making. With careful preparation, it can also be fun and exciting; the beginning of the next great adventure in your life. Let Propertyshop.ca help you find your Dream Home.
Buying Tools
Buying Tips Check List (80 KB)
