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How to prepare to buy your first house (and avoid making a mistake!)

“Always pick your yard based on your Summer lifetstyle.”

~ KARL

June 27, 2019 - Karl Yeh

So you're ready to buy a home but how do you prepare? Who do you talk to and what do you need to get ready? In this episode, we discuss preparing and getting ready to buy your first home. We explore what research you need to do and who you need to work with. We also look at things NOT to do, especially when buying a brand new home.

 

 

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Hi, everyone. I'm Karl. Welcome to another Homebuyer's School video, a channel where you get the latest strategies, tactics, and tricks from home buying experts. Remember, if this is your first time on this channel and you want to get the latest strategies from the experts, hit the subscription button below. Hit the little notification bell, so you don't miss anything.

Today I'm joined [00:00:30] by Kevin French, Kevin French, Realtor with RE/MAX.

The question we're going to answer is

How do you go about preparing to buy a house?

Kevin, when I'm a first time homebuyer, how do I go about preparing to buy that house? Where do I start?

Kevin French:                   

Start with a lender. You're going to understand what you can afford from there.

So, they're going to ask you for various documents to prove your income, and then once they give you a pre-approval, then you know what budget you're shopping within.

Then from there [00:01:00] you're going to want to consider obviously ... You probably already have neighborhoods, property type that you're already interested in.

You're going to want to narrow that down though and think, again it goes back to lifestyle, about the lifestyle you're looking for.

Of course everybody wants a beautiful, new home that has lots of room and space, and it's within their budget.

That's not often what people are working within, so when you find that you have a budget that doesn't meet the home size, or the home style, [00:01:30] or whatever it may be,

You should choose lifestyle, then choose your list of absolute needs, and then from there pick your wants, and then understand that the amenities that are going to be around it,

You're looking for a property that is within a certain distance to work or a certain distance to family.

Then you pick those communities.

Then from there you pick your needs.

So, I need to have three bedrooms. I need to have the basement developed. I need to have a garage.

And then from there, then you look for the nice things that you want, which would be upgrades or [00:02:00] renovations that may be done, a bigger yard maybe, but a small yard can still work.

So, pick your wants, and then try and find a property that's best located.

So, that would be within close proximity to schools or close proximity to amenities, things that are most important to the buyer.

Start with your own research or a realtor?

Karl Yeh:                             

When the thought of actually, "Hey, I want to make a home purchase," from that time to actually you maybe talking to a mortgage broker or a real estate agent, how much research should you do by [00:02:30] yourself, before you actually engage and actively engage in that home buying process? Or do you just start, "You know what? I'm going to go to the real estate agent, and let's start really thinking this through"?

Kevin French:                    

Yeah. I would say start with the real estate agent.

Start with the mortgage broker.

Get an understanding right there.

Don't walk around in the dark for a long period of time, trying to figure it out on your own, when you can have someone guide you, but have a list of questions to go to them with.

Obviously you just need to have open communication with them.

Whenever those questions [00:03:00] come up, send them a text, give them a call, email them, or write them down, and then as the process carries on, you're going to gain more and more of an understanding of how the entire thing works.

If you're looking for a condo, that's completely different than buying a single family home, so they should be able to explain the ins and outs to you, the negatives and positives about purchasing a condo or condo living versus townhouse style versus apartment or a single family.

A lot of people, for example, may be out of town for work a lot.

Well, then you have to think about if you're going to shovel your own walk in the winter, [00:03:30] if you're going to mow your own grass.

Maybe a townhouse is a better fit for you, where that's all done, things like that.

Things not to do when buying a house

Karl Yeh:                             

Okay. What are some of the things that I should not do when I'm buying a house, when I'm first thinking about buying a house?

Kevin French:                     Not do? Don't-

Karl Yeh:                             

Is it something like just go immediately to a brand new show home and kind of, "Hey. This is great," of just go to show homes without getting any financing or having not done any research or anything like that?

Kevin French:                    

Yeah. I think that's [00:04:00] almost impossible for people to do today when they're purchasing anything else in life.

Everybody goes online and reads every review that's ever imaginable, and everybody uses Amazon to purchase, but they might be using that against a retailer that's in the city.

So, I would suggest that they obviously don't go and purchase the first home that they see, but that's what show homes are designed to do.

You're going to walk into a beautiful space that's going to be ... everything's going to be exactly where it needs to be.

That's going to obviously play [00:04:30] into some emotional there.

But take a step back, and then if you want a brand new home specifically, look at all the brand new homes in the area or surrounding areas, and then find out who has the best offering for what you're actually looking for.

 I think it's important though, don't purchase within a community you don't understand.

That's what a lot of people ... they look at the property, and then they look at the land lot, if it's a single family home, or the townhouse development, whatever it may be.

"This feels perfect for me, so I'm going to live here," but they don't think about the land developer, [00:05:00] which is really next level, but it's:

  • who's developing the community, and what are they going to put there?
  • Are there big box retailers coming?
  • Do you want to live next to a hospital?
  • Do you want to live away from a hospital?
  • Do you want to live close to where the LRT line's probably going to be,

although of course those timelines are ever changing.                  

But understanding what's going to be next to you is just as important as where you're going to be.

A lot of people don't take a look at the big picture.

They look at the property they're going within, but [00:05:30] you should really look at all the surrounding areas and what's going to be there.

If you're buying a single family home, it's less attractive on the resale market to have townhouses behind you.

Karl Yeh:                              Oh. I didn't even know that.

Kevin French:                    

Yeah. There's certain lots you might purchase.

Well, if it's a sloped lot, then the properties behind you are going to be walkouts.

People describe that as feeling like you live in a fish bowl.

So, then when you go to sell your property and everything's developed around you, which was once dirt when you're purchasing brand new, then you've got a walkout lot behind you, and then the [00:06:00] home seems like it's towering over you, so you're on your balcony, and you feel like you have no privacy.

Karl Yeh:                             

But that's really tough to do, let's say if you're buying in a brand new community, where amenities and other homes aren't necessarily ... Yeah. You saw the plan.

You saw maybe a 3D rendering, but it's very hard to actually ... unless you actually see it.

Right? It's really difficult to-

Kevin French:                    

It's difficult for the average buyer to see it.

It's not difficult for an experienced real estate agent to see it. If you're working with the right person, they should be asking those questions [00:06:30] and then helping you.

If you don't understand, well, it's easy to find it.

Just hop in the car and drive down the road, and you'll be able to see it in the developed form in the next community over.

Then say, "Do you think that this would be what you'd want to live in? Is this where you're going to feel comfortable?"

Karl Yeh:                             

Yeah. Do you have anything else to add in terms of preparing to buy a house?

Kevin French:                    

Preparing to buy?

Make sure you have your finances in order, and then start shopping within lifestyle.

Lifestyle is key. I say that a million times, but [00:07:00] I have clients that have purchased in the past, and you say it to them, and they say, "Well, I want a bigger home. This is the square footage, and I don't mind living here," and then a year later they call and say, "I think I might-

Karl Yeh:                              I don't like it.

Kevin French:                    

"We may need to sell our house. It takes two hours to drive to work." You know, an hour each way. Then they're back to square one. Typically, you can't sell a year later and make money.

Karl Yeh:                             

I think that's probably where the emotion comes into it. Right? Because we're filming in a show home. Right? You come in here, and you're like, "This is amazing," but I think the last thing you think about is like the [00:07:30] commute to work every day is the last thing that you're probably thinking of.

Kevin French:                    

Yeah. The realities of living in the community.

Let's go back to the developer side of it for a second.

You might purchase at a show home here, but then your home might be located in the back of the community.

What access points do I have in and out? T

here's some communities in Calgary that are developed in such a way that it takes 20 minutes to get out of them in the morning, because people are dropping their children off at school. Other people are going to work. There's just normal life occurs typically between 7:00 and 8:00 AM, so it might take 20 [00:08:00] minutes to get to Stony Trail, or Deerfoot, or whatever it is that's going to get you to work.

Question of the day

Karl Yeh:                             

So, the question of the day I have for you is:

How did you prepare to buy your first home, and did you feel that you were actually fully prepared?

Let us know in the comments section below.

If you want to know more about home buying, check out these videos here, as well as hit the subscribe button to ensure that you're learning straight from the home buying experts. Thanks for watching, and we'll catch you in our next video.

 

Your turn:

Let us know if you have additional home buying related questions that we can answer by submitting them in the comments section below. 

Homebuyer's School publishes new content weekly so subscribe or check back regularly for the latest information, strategies and tips from home buying experts.  

About Kevin French:

Kevin French is a Calgary and area based realtor with a client focus.  He specializes in a stress free home selling process that is built on customer service.  Understanding that your home is one of your largest investments, Kevin employs a marketing mix that ensures you will maximize returns on your home sale. Diligent market research coupled with an in-depth understanding of the Calgary and area markets, allows Kevin to pinpoint the perfect price for your home.

In addition to perfect pricing, Kevin offers a suite of additional services such as professional photography  and an interior designer to ensure your home shows its best. Kevin French has become a trusted name in real estate because he is results driven and works closely with his clients to produce the best results.

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