Buying a home in Ottawa for the first time has always been a challenge. However, in today’s crazy real estate market, it’s more complicated than ever before. To make your journey to home ownership a little easier, Paul Rushforth presents some valuable tips for first time home buyers.
What is most important for first time home buyers to know about working with a real estate agent?
When you buy a property, there is no commission to a realtor. The seller always pays the realtors’ commissions.
Since it costs you nothing as a home buyer, you might as well use an expert agent. We are protected by insurance in case anything goes wrong. We know all the clauses, the conditions, the contracts. We can put you in touch with our trusted associates — bankers, mortgage brokers, lawyers, contractors, and service people.
A big advantage of working with an agent on our real estate team is that we set you up on our search. New properties hit our real estate system before they appear on realtor.ca, so with our help, you could conceivably get into a property and close the deal before the average person even knows it’s on the market.
Calling the listing agent is obviously a big mistake; the listing agent works for the sellers. You need someone to represent you. We take all the pressure off you and do all the work at no cost.
How can first time buyers prepare for the current Ottawa market?
Even if you’ve done some preparation, you won’t be ready for what you’re about to encounter. Before showing you properties, it’s our job to educate you on what’s going on in the market — bidding wars that drive prices up, bully offers, and the importance of acting fast.
I explain that I may call to tell you a suitable house has just hit the market, and if they’re not holding back offers, we’ve got to go see it, and we’ve got to go fast. Two years ago, it was a different story; we could say, “Hey, listen, there’s a new house on the market. You want to see it on the weekend?” That situation has changed.
We’ll also sit down with you at the computer to show you live examples of selling prices, saying, “Look at this home — listed for 500, sold for 610” and, “Look at this home — listed for 500, sold for 625.” That provides context and the proof of how high prices can go above asking.
In addition, we will go through the contract and all the paperwork beforehand, making sure that you’re comfortable with the process. That way, when you have a real purchase contract in front of you, you’ll know what you’re signing, and we can get it done quickly.
Why is mortgage pre-approval so crucial?
You need to make sure your finances are in order so you know what you can afford. As a rule of thumb, you will usually get preapproved for 4 to 5 times your annual income. So if you’re making $100,000 a year, pre-approval could be in the $400,000-$500,000 range, depending on your debt levels.
You’ll also need a down payment of at least 5 percent, plus cash to cover hidden costs, such as lawyer’s fees and moving expenses.
What’s the hardest thing for first time home buyers in Ottawa to hear?
You have to go in with a firm offer, without any conditions. That’s why you need your mortgage pre-approval lined up. And if you want a home inspection, ask whether you can bring an inspector to the viewing.
How does a parent guarantor work?
A great new program offered by a few Canadian banks allows a parent to be a guarantor for your mortgage. The parent is responsible, but unlike a cosigner, their name is not on the property. As a result, their credit score and borrowing power are not affected.
This program is definitely necessary. It might actually be one of the only keys for young people to get into the market right now, the only way they’re going to build wealth and equity.
What do you like best about working with first time home buyers?
Working with first time home buyers is a pleasure because they are trusting; they’re not jaded. They haven’t gone through this process before, so they rely on us to help them with their journey.
And in the end, watching someone buy their first home is probably one of the biggest rewards you can get as a real estate agent.
Can you share a first time buyer success story?
One of our agents on the Paul Rushforth team was helping a couple who kept continually losing out on bidding wars. The homes they saw were in their price range… until the bidding war started. They were starting to get extremely discouraged. In fact, they were going to put house hunting on hold and just be renters for life and or wait till the market slowed down a bit.
My agent understood and responded, “Let’s take a little break. I’ll continue to send you properties, and if something piques your interest, great. If it doesn’t, no big deal — just delete it from your inbox. But I want you to know that we’re on top of it for you.”
Luckily, a lady called our office and said, “I’m selling, but I don’t want anyone in my house. I don’t like these bidding wars. My selling price is X amount of dollars. Period.”
Her home was absolutely perfect for this couple. We were able to get them the property without a bidding war, and the seller got a great price. The buyers were crying on my agent’s shoulder; they were so happy.
I must admit, we have some incredible agents on this team!
Make Your First Home Purchase A Success Story
Are you looking to buy in today’s challenging Ottawa real estate market? Rely on the experienced agents at Paul Rushforth Real Estate to guide you and make your experience a success.