Making the transition from a rental property to your very own home can seem like a massive step to some people. What are all these legal fees? Where are these taxes coming from? What’s the best time to enter the market? It’s easy to feel overwhelmed, but preparation can save you from a world of pain, and help you find your first home that suits your budget and your lifestyle.
Make a plan, and stick to it
Before you start looking for one, sit down and consider your reasons for purchasing a home. Feel free to let your imagination run wild, but don’t let it get out of control. This is your first home, after all, and you might need to make some sacrifices on your dream. Maybe an indoor pool isn’t that realistic or feasible!
Always remember that there are other costs besides the house’s price tag alone. You might need to pay a real estate agency, a land transfer tax fee, or a house inspection, among other closing costs. Owning a home also includes new expenses that you didn’t have as a tenant—insurance or property tax, for instance. Make sure you know what you are getting into!
Quality over price
Sometimes first-time home buyers insist on finding the cheapest home they can, but there are many hidden costs here as well. Upkeep of an old or dilapidated home can become a never-ending sinkhole if you aren’t careful.
Keep in mind life cycle costing whenever you choose a new home. People might tell you that real estate is always a safe investment with guaranteed returns down the road, but that’s foolish. This will only remain true if you choose the right home. Use a reliable home inspector or home appraiser to help you make this decision if you aren’t certain—they can certainly help you determine the future value.
Fall for small!
Don’t think you are lowering your expectations with a smaller home. First time home buyers likely shouldn’t be hunting for a mansion, anyhow!
Buying a bigger house has all sorts of hidden costs, and not just in the buying process. Everything is larger, and it costs more to repair. The more windows you have, the harder it is to replace them or upgrade them. Sizeable yards need constant upkeep. Bulky appliances take up space and suck energy like a vacuum. And let’s not forget the cost of cooling (or heating) all that extra square footage!
You can purchase a compact refrigerator or an apartment-sized refrigerator that will fit perfectly into your smaller home. You will need to think about paying off your (hopefully small) mortgage, so don’t let a hefty utility bill ruin your day! Most people leave their appliances behind when they move, but the chances are high that they aren’t in good working condition—and even higher that they aren’t energy efficient. Find the kitchen appliances that work for you!
There are also savings to be had with air conditioners. Forget the central air: that’s a sure-fire way to run your hydro bills through the roof. Buy a portable air conditioner to do the job for you. You can take the cool comfort with you room by room! It might take a little extra work on your part, but the savings are worthwhile. Keeping track of your finances doesn’t stop after the initial home purchase, after all.
Don’t be daunted by the tasking of buying a house for the first time. Billions of people have done it before, and you can too! Just make sure you plan, and you account for as many variables as you can—from property taxes to square footage, and yes, even to kitchen appliances. Everything counts with a purchase this serious!