100 Questions I Wished I Asked Before Buying My First Home
Buying my first home was a huge undertaking. Even as a real estate student (at the time) I wasn't ready for everything it entailed. But I did learn one thing, if you want to make it go as smoothly as possible and get a fair deal, being prepared is crucial. If you're prepared you can move quickly should a deal present its self. This makes you less likely to be overwhelmed with the anxiety that I see so many first time buyers trying to deal with.
That's why I have prepared an extensive list of "100 Questions I Wished I Asked Before Buying My First Home".
Some of these questions are about the people you're going to meet along the way, like your real estate agent or your lawyer. There are questions about the home buying process, and some questions are about each house you will see. Most importantly, there is even a good deal of questions to ask yourself.
So what are we waiting for? Let's dive in with the first 10 questions, in no particular order;
1. What is my total budget?
I could seriously write a whole blog post about this question alone (and likely will). The short nitty-gritty answer is a calculation that tests how much money you have each month after paying out your expenses.
I have posted two mortgage calculators on my site to give you an idea of what you might be able to afford.
Mortgage Affordability Calculator (quick and easy)
Mortgage Calculator (more in depth)
Bonus: the Government of Canada has put out a great resource on getting your first mortgage, you can check it out on this page.
2. What kind of documentation do I need to get a mortgage?
I am not a mortgage broker, but I can tell you what I have typically heard as far as document requirements to get you started.
- Some form of photo ID
- Your social insurance number
- Several recent pay stubs
- Up to three years of Notice of Assessment from Revenue Canada (the document rev-can mails you after you send in your taxes each year)
- Documentation to show you can afford closing costs and downpayment.
- Documentation to prove where your down-payment originated. (Loan, gift or savings et.)
- And a list of all your current bills and liabilities.
This list isn't mean to be exhaustive, different lenders have different policies. But this list will get you started gathering documents so the mortgage process can proceed quickly.
3. How can I buy a house with COVID around?
It requires a little bit of a "re-think" of how business is done. It is possible to have a safe transaction as long as all social distancing guidelines are followed.
Typically you will be asked to wear a mask at all times, sanitize your hands before and after a showing and keep your distance from your realtor. Your temperature will be taken at each physical meeting as an added precaution.
As much as possible I am also limiting physical meetings, instead, I hold meetings over Zoom or Facetime.
4. What are my "housing needs"?
These are the deal-breakers. Typically needs are the hardest things to satisfy or workaround in a home that is not suited to you. It can be as fundamental as location, or the number of bedrooms, but getting it wrong can cost you $$$ and might even require you to sell and move.
Prudent buyers carefully examine their needs before entering the market and make them crystal clear to their agent from the beginning.
5. What are my "housing wants"?
These are the fun stuff. The extras that people fall in love with. But it is also where most trade-offs are made. Do you want a pool, hot tub and a deck? What if we can't get all three in one house? Having a list of your wants prioritized by importance to you is a great way to convey exactly what you're looking for and how flexible you are to your Realtor.
6. Is now the time to buy?
I get this one every time someone finds out I'm a real estate broker. It's right up there with "how's the market?" The simple answer is now is always the right time to buy, depending on what you're looking to buy and why.
Someone looking to buy a home to raise a family in and hold it for 10 yrs will have a different strategy than an investor looking to flip a house for a quick buck. That being said, you can plan around market fluctuations and high purchase prices. Please contact me if you want to know more.
7. Should I get a mortgage through my bank?
That depends, do you like your bank? Are their rates competitive? Will they extend a mortgage to you? Banks can be quite fussy on who they lend to, but if you can get a mortgage through your bank it will usually be a little cheaper (but not always..shop around!). It used to be very handy to have your mortgage at your bank, you could pay your mortgage when you came in to cash your paycheck. But now with direct deposits and automated payments, dealing with other mortgage lenders is honestly just as easy.
Long story short - shop around, and don't just compare rates, pay close attention to the terms. The terms can often save (or cost) you more money than a small difference in interest rates over the long run.
8. Condo or House?
This comes down to personal preference. Condos are great if you don't want to do any of the manual labour associated with ownership. And they aren't just highrises anymore, you can get condo townhouses, detached homes and even condo commercial spaces.
The drawback, condos don't allow you to easily choose what maintenance and repairs to do and when. Repairs and maintenance are paid out of a fund managed by the board, which is funded in part by the monthly condo fees charged to all owners.
Generally, as the building ages, the fees go up as more repairs are required. And those repairs can be extremely costly in the case of a high-rise building.
Decisions are made by a board of owners and interested parties, and you may not agree with them. This lack of freedom can be stifling to some owners.
If you choose to go with the typical ownership structure, you can expect to be responsible for all the work and repairs.
There is no condo fee to pay each month, but a smart owner puts aside some money to cover any unexpected repairs.
Also, this type of ownership allows for the most personal freedom in decisions, there's no condo board to vote and no majority rule.
9. Semi or Detached?
This refers to how many "exterior" walls you share with a neighbour. Detached homes have no shared walls, it stands alone with property around it on all sides. A semi-detached house will only share one wall with a neighbour. Duplexes are an example of this.
Generally, the fewer shared walls, the more desirable the house is. A semi is usually more desirable than a townhouse, a linked (a house that shares a foundation with its neighbour, but no above-ground walls) is more desirable than a semi and so on up to a detached.
Usually what you decide to buy is mostly a function of budget and availability. Whole neighbourhoods can be found that consist of only linked and semis have sprung up in recent years because their density allows builders to squeeze more into a subdivision. This makes them attractive for first time home buyers especially. When my wife and I were looking at buying my first home, we looked at several semis and finally fell in love with a linked foundation home.
10. New or pre-owned?
This is a tough one. I find this comes down to personality. I have clients that have never owned a pre-owned home and swear they never will. Other clients like a more mature lot and older style of home and will never look at any of the new "boxes".
Some things to keep in mind, older homes often are exempt from HST, where new homes often aren't (though rebates are available in certain circumstances).
New homes can be tailored to the buyer's wants and needs, usually for extra fees, which can quickly add up in cost and delays. Another drawback is when you're buying a house from plans and drawings (not built yet in other words), the finished house can often vary from what you "thought" you were buying.
Builders usually can make changes and substitutions under their contracts and often do. Mostly it can be as simple as a certain colour tile is no longer available, or a certain wood flooring is out of stock for example. But sometimes it can be the change of room dimensions, ceiling heights or similar changes that can affect the look and feel substantially.
New home builders use customized contracts that are often wordy, confusing and intimidating. Those contracts can severely limit your choices when it comes to changes. This is why I've always suggested that new home buyers hire a real estate agent experienced in new home sales and a very competent lawyer to review all contracts and represent the new home buyer in every step of the process.
You can find out more about that on my other website, Newmarket New Homes
There we go, the first installment of 100 Questions I Wished I Asked Before Buying My First Home. If you found any of this information useful, please hit the like button or consider sharing it on social media. Do you have any questions about the home buying process and can't wait for the next installment of this series? Please feel free to send me a text or Facebook message and I will be glad to assist you.
