Unless you win the lottery and decide to buy an island or a business empire, your first home will likely be the single largest financial transaction you’ll ever make - but that doesn’t have to be the intimidating, daunting task it’s often made out to be.
Most first-time home buyers head into the real estate market feeling overwhelmed and nervous, and walk away with the keys to their first home and give an emphatic sigh of relief. With the right help and guidance, buying and moving into your first home can be an exhilarating point in your life; but a word to the wise, although the light at the end of the proverbial tunnel may be bright, there’s lots to consider before you host your friends to a move-in BBQ.
In this post, we’ll outline 5 of the top questions first time homebuyers should ask their realtor.
Interview your Agent Choices
This tip should always be the first and foremost important step in any real estate situation. There’s no doubt that a qualified realtor is a huge benefit to the entire process of buying a home, so before you can ask any direct questions about available homes, you’ll have to conduct a few realtor interviews to find someone who matches your style, identifies with your financial and personal life, and compliments/balanced your insecurities and strengths as a buyer.
In this sense, interviewing your realtor is fraught with many questions you should consider asking. Including:
- Do you have any references from past clients I could speak to?
- Talking to previous clients is never a bad idea. Ask them about the home showing process, how well the agent matched their wish-list, and how the closing of the sale went? Any hiccups?
- How many clients and/or properties are you currently representing?
- Good agents rarely accept any or all clients that approach them; a good agent should interview their clients for a good fit as well. However, busy agents are typically more aggressive and motivated, which could pay off if that style of salesmanship suits your style.
- How many homes have you sold in my desired neighbourhood?
- Having a grasp on the asking prices and previous selling points of neighbouring homes will help your realtor to guide you along the purchasing process. If they’ve sold a few houses in the area you’re considering, consider it a feather in their cap.
- What are your real estate qualifications?
- Make sure that your agent choice has up to date and current realtor qualifications, and investigate any awards they may have accumulated as well to get a sense of their dedication to real estate success.
- What is your best strategy for my unique needs?
- Do some initial research on the current market; a red-hot sizzling sellers market likely means that homes will sell for above asking price. A good agent should always be able to strategize ways to market and negotiate a fair price for a home. Ask what their strategy is for dealing with stubborn or difficult sellers, and if they’ve dealt with a similar marketplace before.
How Much House Can I Afford?
When you’re pre-approved for a mortgage with an established banking institution, you’ll likely be approved for more money than you can comfortably afford. This is by no mistake, as banks will want to loan you as much money as possible, because it means they’ll accrue more money in return as interest over the life of your mortgage.
A good realtor will be able to match you with a maximum budget that not only matches your real estate wish-list, but also is a financial match for your current income and situation. Consider beginning by using a mortgage calculator, and discussing the numbers with your agent. A newly married couple doesn’t need a 4-bedroom house for example - so don’t spend the extra money! Instead, choose and listen to a realtor that challenges you as a buyer to make good, sound financial decisions based on what house you can afford, not what house you’ve dreamt about since you were 15.
What Extra Costs are Involved?
While we’re on the topic of money and finances, it’s paramount that new first-time home buyers fully understand the vast financial implications that accompany their home purchase. The roof and walls aren’t the only thing you’ll be paying for, and a good realtor will help you to prepare for the extra financial commitments you’ll need to handle before the keys are dropped into your hands.
There are multiple fees and costs outside of the cost of the home. For example, there will inevitably be a commission fee from your realtor - this can usually range from 1%-5% depending on market conditions and the area you’re buying in. There’s also home inspection fees that can cost you a few hundred dollars, land transfer taxes depending on what province you live in, legal fees associated with closing the deal that can cost anywhere from $500-$1,500. There are also home insurance costs, title insurance costs, and even mortgage costs, depending on which banking institution you choose.
Buying a home is an exciting endeavor, and a challenging, overwhelming - and rewarding experience if done right. The first step before you call the movers is always to investigate who can help you find the perfect home. In this sense, your choice is realtor is just as important as your choice in neighbourhood. Happy house hunting!