Questions First-Time Homebuyers Should Ask

Asking the right questions is an essential part of the homebuying process. While many questions about the property should be directed toward real estate agents and sellers, it would also be wise to ask various questions to ensure this is the best decision for yourself, your family, and your future. Whether this means forcing you to conduct more research or running the numbers on an Excel spreadsheet, asking these questions will be key to the biggest purchasing decision of your lifetime.

So, what should you ask anyway? The most basic questions are typically the most vital. Let’s examine what you should find out before you start the process of purchasing a single-family home or a 1+1 condo suite.

9 Questions First-Time Homebuyers Should Ask

Here are nine questions first-time homebuyers should ask:

What Is My Purchase Budget?

According to the Canadian Real Estate Association (CREA), the average sales price of a home in March 2024 was nearly $700,000. Of course, this will vary by the real estate market. In Toronto, the average cost is above $1 million. In Saskatoon, it’s about $300,000. So, this all means that you need to figure out your homebuying budget to determine what type of property you can purchase or where you can live.

If you have a budget of $400,000, it will be challenging to buy a home in Vancouver. So, you will either need to earn and save more or reconsider a location that best suits your finances.

Do I Have a 20% Down Payment?

A 20 percent down payment is an essential component of the home buying process. However, it can be difficult for the typical household to accrue a sizeable down payment in today’s Canadian real estate market. The main advantage is that having 20 percent of the purchase price ready allows you to borrow less, pay less interest, and trim your monthly payments.

If you do not have at least 20 percent, you may be required to pay mortgage insurance premiums from the Canada Mortgage and Housing Corporation, or CMHC.

Will I Qualify for a Mortgage?

When you begin house hunting, the best immediate step you can take is to get pre-approved for a mortgage. By qualifying for a mortgage, you know how much you have available and at what rate. But will you qualify for a mortgage? This is what top lenders will require or consider:

• Income
• Employment status
• Credit
• Down payment
• Stress test
• Debt service thresholds or debt-to-income (DTI) ratios.

What Are the Hidden Costs of Purchasing a Home?

Gone are the days of simply obtaining a mortgage and receiving the keys to your new home. Today, there are many layers to the home buying process, and, as a result, there will be various hidden costs to factor into your budget. Here is a brief list of what you can prepare for:

• Land Transfer Tax
• GST/HST
• Title insurance
• Land survey
• Condo fees (if applicable)
• Mortgage default insurance (if applicable)
• Legal expenses
• Hook-up costs
• Moving expenses

Can I Afford to Maintain a Home?

Home ownership can be expensive as there are many fixed, variable, and emergency costs you will experience every month. In other words, your household will need to budget for more than just the monthly mortgage payments. Here is what you can anticipate to spend on during the coming years:

• Home insurance
• Utilities
• Property taxes
• Maintenance (mowing the lawn and watering the grass, for example)
• Household repairs or replacements.
• Water heater rental
• Condo special assessments

And this is just the tip of the financial iceberg.

Should I Book a Home Inspection?

Home inspections are imperative for homebuyers. They ensure that the home you are buying is in good condition and will not require expensive repairs, renovations, or replacements once the property is transferred to you. While it is an added expense of a few hundred dollars, it is an investment that could help you trim the selling price if you find anything wrong with the house.

How Old Is Everything Anyway?

When you come across a house that has piqued your interest, it is essential to determine how old the appliances and major systems are, such as the washer and dryer, refrigerator, water heater, roof, electrical system, and HVAC systems. If they are new, you are less likely to face issues than if they were as old as the neighbourhood.

Is a Real Estate Agent Necessary?

In our do-it-yourself (DIY) world, many people think they can do everything independently. While technically true, it is often better to hire an experienced and trained professional. So, when buying a home, the best strategy you can employ is tapping into the expertise of a real estate agent. This can save you lots of time, money, energy, and headaches since a real estate agent possesses the knowledge of buying and selling properties in your desired neighbourhood.

Is This the Right Neighbourhood for Me?

Do you wish to own a home in your current neighbourhood, or do you wish to branch out somewhere else, be it a large city or a small town? This is something important to consider, especially when you factor in other elements, such as schools, transportation, nearby amenities, your office, and other day-to-day items essential to your living standards.

Final Thoughts for First-Time Home Buyers

Buying a home is a significant milestone in your life. Home ownership is a part of the Canadian Dream. Because it is a substantial investment, you need to do your due diligence and in-depth research to ensure that you have made the right decision for you and your household. You should never be cavalier when buying a property. Ask any and all questions, even if you think they are silly – your RE/MAX agent is here to answer them!