Adventures in House-Hunting: Top 5 things first time home buyers should know

04/01/2014

My husband and I have decided it’s time.
We have a one year old daughter. A dog. And both of us currently work from home. The first two are reason enough to start looking to buy a home, but it’s the last one and the promise of more SPACE that has us eagerly awaiting a place we can call home.
The problem is that everything I read tells me that buying a home right now in the Calgary market place isn’t the best idea. Seems like everything has gone crazy, prices are sky high and first time ownership is getting further and further out of our reach.
“It’s hard to predict when the best time is to buy a house in Calgary. But if you are planning to stay in the home for 5-7 years it doesn’t matter if you buy high or enter at this current market. Real estate always goes up.”
That’s according to Patrick Law who has become our number one confidant, trusted advisor and our real estate agent. He sold my brother and sister-in-law their first home. He’s going to sell my parents home and we know he’ll find us our dream ‘starter’ home too. Not pushy at all, he puts our best interests first, he listens and doesn’t mind answering questions, which is a big one, because I ask a lot of them. A lot.
Since I work with young parents in the Calgary area, I’ve decided to chronicle our house-hunting adventures. Partly to help those who are also looking, to back away from where we want to buy (Just kidding. Not really.). But seriously I think it’s such a daunting task that I want to share what we go through so if you’re looking around too, or hope to soon, or want to laugh at our mishaps, by all means, I hope our adventures will provide the information that you need.
So where do we start? I spent a good few hours chatting with Patrick last week. In fact we talked so long, he had to call me back from the car on the way to his hockey game. Now that’s patience. We started by going through the basics anyone needs to know when purchasing a home for the first time. So here are Patrick’s top 5 things you need to know as a first time buyer:

1. Get a pre-approval for a mortgage:
Before you start your search for the perfect home, you need to see someone about getting a mortgage so you know what you qualify for. You can go to a mortgage broker or your bank, but you should shop around for the best price you can find find the right person who is going to take care of your needs and find the best product that will suit your financial goals. The bank typically offers only one rate although you can usually barter them down. Most people feel more comfortable going with their bank but they usually lock you in pretty hard may only have products that don’t suit your needs.
With a mortgage broker not only do they specialize in mortgage rates, they can shop around and find you the best mortgage price. Patrick says it’s 50/50 if people go with their bank or a mortgage broker, everyone is different.
* Also know that even when you get pre approval for a loan, it doesn’t mean anything until you put the offer down. And for those of you who just started new jobs, you need to be working steadily in the same job for at least three months before you can qualify for any type of mortgage.

2. Understand Needs Vs. Wants:
I play this game all the time. Do I need those shoes? Or do I want those shoes. So I am used to this common dilemma. Patrick suggest making a list.
Do you want a fireplace?
Double sinks?
Bonus room?
Do you have kids?
No kids?
Want a finished basement?
Laundry upstairs?
Open kitchen?
Suburbia? Yes or no?
Usually when he meets with a client for the first time he makes a tailored list so he knows exactly what’s important to you and what isn’t. That way he won’t take you to homes that don’t fit your criteria. Saving me time and frustration. I like it.
He will take you to at least 8-10 homes so you get an idea of what you’re looking for and can help you narrow it down. Sometimes you think you want the large home, but realize that the smaller bungalow is more what you need.

3. Find a real estate agent.
This was a tough one for me. I am not familiar with real estate agents having never bought or purchased a home. But I do know there are a lot of choices out there. Signs, advertisements, posters, billboards. Everywhere. So how do you choose?
I did what I normally do. I asked my family, friends and mom’s in our programs. I find word of mouth is the strongest form of advertising. In my case, Patrick sold my brother his home and things went fast and very smoothly. I called Patrick and spoke with him myself to get my own impression. I tend to think a lot of real estate agents are pushy, but Patrick is not the least bit in your face. He was approachable, easy to talk to, understanding and had a lot of answers.
How you find your own real estate agent will depend on your personality and what you are looking for. Patrick’s business is primarily built on referrals and repeat business. In fact 90% of his clients are from referrals. For me, this speaks volumes to the type of person that he is.
Patrick recommends interviewing at least 3 different realtors. Talk to them, get a feel for what experience they have behind them. Some are new school thinkers while others may be more of the old school ways. Find what works best for you.
4. Discuss Commission:
Once you decide on your real estate agent, or if you are checking into a few real estate agents, you should discuss commission.
If you are buying a home, your agent does not charge you money. They make money from the seller paid through the sale on the sellers end. The only exception to that rule is if you purchase a home that is ‘Sale by Owner.’ That is a unique situation that you have to discuss with your realtor because they do may not make any money on the purchase of that type of home.
Regardless your agent should be open and willing to discuss fees and commission up front.

5. Set up a home search:
After you’ve found your agent the next step is to narrow down your search of areas and locations. This is the fun part! We told Patrick the general area that we want to live in, close to work, close to downtown, close to family. So Patrick took that information and entered it into the MLS search. Now I get emails everyday, sometimes numerous times during the day when houses go on the market that are within our target area and our target price range.
I must say, it’s fun to dream. I see lots of homes way above our price range that I would move into tomorrow. Some I laugh at, as in that’s hilarious you think you can get that kind of money for that type of wood paneling on your walls. And others I think must be next door to a grow op which is why they are selling so cheap. (That’s where I appreciate Patrick’s honesty. I have emailed him asking these questions and he always tells me like it is.)
So the next step for hubby and myself is to start checking out some homes. Doing some tours and finding out what the market is really like. Are we close to buying a home? We are targeting between spring and fall to make the move but it all depends on (again) the market. It makes me nervous how quickly things move, especially good places. And bidding wars – that makes me want to reach for a bottle of Tums. But I feel much better knowing that with the experience Patrick has, we will eventually find our first home.

Stay tuned next month for Adventures in House-Hunting #2: Why the pictures look so much better on the internet, than in person. (Just kidding. Not really.)
If you’d like to get in touch with Patrick Law you can reach him at:

http://www.royallepage.ca/en/agent/alberta/calgary/patrick-law/22844/#.UzosQVxhNuZ