BUYING A HOME: MEET THE BUYER
Here’s who’s buying.
With questions about the economy, the job market, the “bubble”, and whatever else hits the newspapers, a lot of folks ask us: just who is entering the real estate market, anyway?
The fact is, first-time homebuyers don’t fit into a single demographic. Generally, they might be a little younger than our other clients, but we’ve seen seniors who have rented for more than forty years purchase their first home just shy of their 70th birthday.
For the most part, first-timers of any age get a lot of information from the internet these days — and good for them! At least they’re trying to learn a little bit before throwing themselves to the wolves.
But you know what they say about a little knowledge being a dangerous thing: knowing just a bit about something tends to make people emotional. Ever watch Dragon’s Den? It’s four rich folk listening to pitches from would-be recipients of their investment dollars.
They seem to say just about every time out that emotions don’t make good decisions. And hey, buying a house is already an emotional process, so if we want to do things right we need to balance the heart by bumping up the brain factor. Hence — yes, ‘hence’ — we’d like to turn that ‘little bit of information’ into ‘plenty’.
Regardless of age or online prowess, most people who are new to mortgages do not get an in-depth explanation of the process. Let’s put it this way: when you buy a used car, you’re rolling the dice if you don’t take it to a third-party mechanic to give it the once over. That inspection can detect a lemon before you fork over the purchase price or sign up for loan payments.
The same goes for property. If you’re buying a condo or townhouse, but don’t do research into strata minutes, you’ve got no one to blame when the monthly condo fees go up by $300 next year.
If you don’t do a home inspection, especially on an older home, you can hardly cry foul when there turns out to be structural problems with the foundation or mould problems in the attic.
Without looking into the historical buying patterns in a neighbourhood, or a read-through of city zoning plans, you can’t complain if that new dream home with loads of natural light is suddenly plunged into the shadow of a new high rise built next door.
First-time buyers, even those who scour the internet for checklists and advice columns, usually don’t cover all of their bases. How can they? It’s their first time, so they’re bound to make mistakes. (Think about it: when was the last time you tried something even moderately complex, and nailed it the first time out?)
That’s why it’s imperative to build a team of professionals whose sole function is to look out for your best interest. The broker, the realtor, the notary public — all of these people are supposed to work for you, not the other way round.
Spend some time interviewing, and choose good, strong people who know their business inside and out. If you don’t have the financial clout to buy the property you want right now, start asking questions about how to get there.
Seek out accurate, objective advice. Read about your local market. Learn about basic mortgage principles. Basically, become more financially literate than the average buyer. That will help you to save your emotions for moving day.