If you are looking at purchasing some Edmonton real estate but are just getting your feet wet in the real estate market here, there are a few things to consider. It can be very exciting when you finally decide to buy your first home, and many people hop right online and begin browsing through listings. It’s only natural to dive right in like this, but actual house-hunting isn’t the first step you should be taking. What you need to do first is figure out what you can afford.
To do this, begin by talking to your bank or a mortgage broker. Together, they will show you how all your current assets, debts and expenses, come together to paint the picture of the price-range you can comfortably afford to shop in. Once this is taken care of, you will hopefully end up with a pre-approval for a mortgage and the beginnings of getting your foot into the Edmonton real estate market. Remember though, just because you are approved for certain amount, doesn’t mean you have to spend that amount; rather consider that the very top of your price range and likely aim lower. Why?
Although you may have managed to save up a significant sum for your down payment, you need to look at the affordability of your home over the long run. If you buy at the top of your price range and invest all your savings as a down payment, you will be back at square one living paycheque to paycheque. Can you afford your monthly mortgage, plus insurance, utilities and other debts – while still having a life? Maybe not. This is called being ‘house poor.’ House poor is where a homeowner invests all their disposable income and savings into the cost of maintaining their home, mortgage and other bills. Although you can technically afford your home, you can’t afford anything else! This is a surprisingly easy situation to find yourself in, especially with Edmonton real estate. Edmonton is a healthy marketplace which can make it difficult to find something in lower price ranges.
While this is a common mistake that many first-time home buyers make, you can avoid it by strategically choosing a home you can afford that isn’t going to break the bank. You’re a first time buyer and that means you can buy something smaller now and get something bigger later, or you can buy something that is imperfect and work on it, over time, to change it into something that reflects you perfectly. Edmonton real estate can sometimes be overwhelming. Doesn’t it always seem like a seller’s market?
As the buyer, you are in control. Don’t forget it. You may not find a place you want or can afford to invest in on the first day – or even the first month. As a savvy shopper, be patient. Even Edmonton real estate has the odd diamond in the rough, all you have to do is wait for it. If you are too anxious or overzealous, you may make a purchase that you aren’t entirely thrilled about – and then you’re stuck. Let’s make sure that doesn’t happen.
Consider all of your options and be prepared to compromise. There is an excellent chance you will not get everything you want in your first home – especially if it isn’t brand new. You may have to compromise on the location, or the number of bathrooms, or perhaps that double garage. Then again, you may have to compromise on the style of home too. A detached family home may just be too pricey right now, but a townhome or large condo might fit the bill, and Edmonton real estate is variegated enough to offer you all of these options.
Above all else, have faith in your team! You have financial specialists, mortgage brokers, real estate agents and even lawyers and home inspectors on hand to help you out. Take advantage of their industry knowledge to help you make the best possible investment in your Edmonton real estate adventure.