Are you looking to buy into real-estate? Maybe it’s strictly for investment purposes, where you will want to rent out the property right away? Or, maybe you want to find your first home? Either way, if you’re new to this, you may be wondering what the process entails.
Based on my own experience, I’d love to share some tips with you. However, before we start, I want to clarify that I am no expert in this field. I am just a girl who is pre-approved and on the hunt!
My Story
First, I come from a traditional family. From a young age, my relatives have instilled within me the notion that investing in real-estate is something you can’t go wrong with (that is, if it is done right, of course!). Now, do I completely agree? I truly think it depends on where you are at in life and what you want. I see absolutely nothing wrong with renting. However, for me personally, I really want to own real-estate. In conclusion, I made it a goal of mine to do so by the age of 25.
Moving along, let me let you in on my life just a little more. Early last week, I turned 25. A few days before my birthday, I put a conditional offer in on my dream condo. The conditions included financing, as well as more time to review the status certificate.
To my delight, it was accepted. The building I put an offer on, was built in 2016, therefore, I wasn’t expecting any issues with the status certificate review. I totally thought that the deal was going to be finalized within a few days, and that I was going to be moving in on November 19, 2021. Fast forward only a couple days later, and let me tell you.. I was wrong.
Next, I made a very tough decision (just yesterday actually).
Due to red flags in the status certificate (concerning design defects and hydro issues) I had to release my conditional offer. Now, I am back to hunting for the right property for me. And with that, I have to say, my perspective on condominium ownership has changed. Their fees seem to become more and more outrageous and less justifiable to me as time goes on.
In fact, although this happened, I am feeling very thankful for my experiences thus far. Because of this little bump in the road, I have learned so much in a short period of time. Indeed, moving forward, I know the exact questions to ask, at what time, and now, what to look out for exactly.
With that being said, I want to share my lessons with all of you who may be looking to buy into real-estate for their first time, too.
1. Make Sure You Have Enough Money Saved
Prepare to have money for:
- A downpayment
- A deposit
- Legal fees
- Furniture
- Miscellaneous circumstances
2. Get Pre-Approved for a Mortgage ASAP
Certainly, you can search online to see what’s on the market without an official pre-approval. Real-estate agents are available to show you whatever you desire, without asking if you are pre-approved (for the most part). However, you will be genuinely surprised at what you can get approved for. Ultimately, it is best to understand what you can afford and whether you’ll need the help of a guarantor or not. Overall, my suggestion is to get pre-approved before you start to work with a real-estate agent and visit showings. To sum it all up, you will save everyone’s time, including your own.
2. Ask For Help and Take Your Time
If you’re looking to buy into real-estate, consider these points below:
- Visit condominiums, townhomes, row-houses, etc. to learn what it is that you want
- If you want to purchase a condo, view different buildings to get a sense of the various amenities that are offered
- If you’re going to rent out your property, consider what demographic you want to rent out to (millennials, a single family?)
- Work with people who have years of experience in the field, as they will better understand the trends that have occurred over a long period of time
- Request the best mortgage rate
- Think of location! location! location! For example, are there forms of transportation, schools, malls, and etc. nearby?
- Clarify any terminology with your lawyer that you don’t understand
3. Send Listing Details to Your Mortgage Broker
Before you put any offers in, run the numbers. Consider monthly fees, property taxes, hydro, gas, insurance, etc. You do not want to end up “house-poor.” That is not a way to live. Do not feel annoying if you are sending a lot of listings to your mortgage broker. They are there to help you!!
4. Review Status Certificates
It seems to be that the market is settling and conditions are coming back. To be quite frank, I have no idea how people can buy into real-estate by seeing it online only, or without reviewing an updated status certificate.
If you are interested in putting in an offer, be sure to request an updated status certificate beforehand. Additionally, make sure to review the certificate thoroughly with your lawyer to clarify any potential red flags. Finally, I highly recommend putting conditions in your offer for financing and additional time to review the status certificate (again). Ultimately, this will allow you peace of mind.
5. Be Patient
This whole process can be an emotional roller-coaster. There will likely be many conversations, showings, offers and competitors, and last but not least – a lot of paperwork. It is best that you accept this beforehand.
In conclusion, these are my five tips. If they end up helping even just one person, then I am happy.
PS! If you are in the Toronto area and are looking for a real estate agent, look no further than our very own Natalie Weed.
