Is now a good time to buy a bigger home in Central Alberta?
If you have your finances in place, and you have decided what you want, now could be a great time to buy a bigger home. Currently, in Red Deer and Sylvan Lake, homes have been transacting at a strong pace and the market is active. While buying a home is a uniquely personal decision, if you are feeling ready, there are still some amazing opportunities to buy the home of your dreams right now.
Feeling like you might be ready? Here are some things to consider ahead of starting your search.
1. Do you have a 5% down payment saved… or enough equity in your current home once it sells?
If the purchase price is less than $500,000, the minimum down payment is 5%. If the purchase price is between $500,000 and $999,999, the minimum down payment is 5% of the first $500,000, and 10% of any amount over $500,000. If the purchase price is $1,000,000 or more, the minimum down payment is 20%.
2. Get pre-approved for a mortgage… todays interest rates are at ALL TIME RECORD LOWS!
It is important to understand what mortgage lenders will approve ahead of looking for a home. There are a number of online tools available to do a quick evaluation and get you pre-approved. When it comes time to make an offer, sellers will value a pre-approval over one that is not pre-approved because it is likely a more solid offer.
3. Know the costs of the transaction
Inspection – Always advisable which can cost $500 – $600 depending on the size of the home.
Lawyer – You will need a lawyer to finalize the deal as well as clear disbursements. This fee can be $1,500 +.
CMHC (mortgage insurance) – Applies if you put less than 20% down on a home and is added to your mortgage (not cash out of your pocket)
GST – This applies if you are purchasing a brand new home.
First time home buyer – You can withdraw up to $35,000 from your RRSP’s for a down payment (and not pay tax on the withdraw).
Moving – the costs of movers is extremely variable from Kijiji (~$500) to professional movers and organizers (~$2,500+ depending on volume). Or pizza and beer if your friends love you.
4. Understand your specific market
Doing your research is very important. If you are selling your existing home and buying a new one, it is important to understand the micro-market you are selling from and buying into. If you are a first-time buyer, make sure you understand the trends in the type of home you are looking for in the specific community you are looking at.
5. Know what you would like to buy
This is the most personal part of your buying journey. It is a good idea to rank the attributes of the home you are looking for – “must-have” and “nice to have” characteristics. Beds, baths, sqft, and property type are obvious questions, but also consider neighbourhood, proximity to work, and lot size. This way, you are able to hone your search right away and it will be less overwhelming from the beginning. You can always revisit this list.
6. Start your search with an experienced Realtor
An experience Realtor can help point you in the right direction, provide critical advice and help you negotiate the best deal possible on your next home. The best Realtors often know about great properties that may not be listed on the open market.
7. Stay healthy
Check out 3D tours, pictures and videos first to get an understanding of the home to reduce the number of showings you need to go to. When you do go to showing bring along sanitizer. Seller’s will usually leave the lights on and interior doors open so you and your Realtor don’t have to touch all of those services.