Before buying a home, what do you need to consider and prepare for? In this episode, we discuss what are the top five things you absolutely MUST consider before buying a home for the first time.
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What we discussed:
Hi everyone. I'm Karl. Welcome to another Homebuyer's School video, a channel where you get the latest strategies, tactics, and tips to help you with your home buying journey.
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Today I'm joined by local realtor, Brad McCallum with Remax First. Today we're going to talk about the
Top five things you should know before buying your first home
Karl Yeh: Brad, let's start with number one.
1. Understand the value of the home
I'd say the very first thing that you want to do when buying a home is really understand the value of that home.
The best way to do that is to take a look at other comparables in the market, really understand the pluses and minuses of your individual property versus the [00:01:00] ones that you're comparing it against.
That way you can be confident that you're making a good purchase, because it's easy to fall in love with the home and overlook maybe some of those basic fundamentals of a good purchase.
When you talk about comparables, do you mean comparables say from a home let's say across the block, in the same location, the same size, the same product type?
Yeah. There's a whole bunch of things that we do to compare two properties because obviously no two properties are completely identical.
Sellers [00:01:30] will often say, "Yeah, but like our yard is a little bit bigger," or, "Our square footage is a little bit bigger."
What we try to do is we look at other properties that have sold in the area, we compare it with the one that you are selling with, we figure out things for everything from the price per square foot to what those things are that are different and how that actually affects the price.
Maybe one house has a bonus room, maybe another house doesn't, and we just make an adjustment.
We don't ever compare apples to apples, but we try to make [00:02:00] those two properties look like two apples.
Karl Yeh: So number one's comparables. How about number two?
2. Understanding full cost of buying a home
Well number two is understanding the full cost. It's very easy to consider the cost being purely your mortgage payment every month.
But in reality there's property taxes, there's maintenance costs, there's just so much more that goes into home ownership that as long as you go into it with that idea of what those expenses could be, you're [00:02:30] going to be much more satisfied with your purchase.
If you want to know more but hidden and additional costs to buying a home, check out this video here and in the description below.
Karl Yeh: So we've got comparables, we've got full costs, what would be another one?
Another one is location.
You really want to consider the intrinsic value of one home's location versus another. Is one on a busy street? Is one got that south facing backyard that you've been looking for? Is it close to a park? Is it maybe close to a school?
Is it going to be noisy? [00:03:00] Is there nice amenities nearby?
Those are the kinds of things you really want to keep in mind and that comes from really understanding what your future needs are.
I think that's one of the things we're probably going to touch on here in a second.
For sure. There's one tip I always heard in terms of location is actually maybe do a drive from that property during rush hour.
Actually check it out.
See if that commute is actually how long you prefer it to be.
It's a very good point.
It's easy [00:03:30] because lots of times when we're out with our clients and looking at homes, it's a Saturday afternoon, it's a Sunday morning, it's an evening, it's a sleepy time of the day.
That's when people are able to actually go out and look at properties and it's not always a good reflection of the commute, the traffic, the noise, all those things.
Karl Yeh: Perfect. How about the number four thing they should know?
4. Future needs
I think that number four is, I was just mentioning future needs.
A lot of times [00:04:00] it's easy to kind of fall in love with the life we want to live right now, so we buy that cool loft apartment downtown and then we realize, "Oh wow, okay, I also want to get married," or, "I want to have kids."
The purchase that you made tomorrow is not going to suit your needs a year or two or three years from now [00:04:30].
The way to win in the real estate market is to really buy and hold. There's costs with moving and flipping properties and all those sorts of things. So you really want to think of the life that you want to be living two, three, four, five years from now and find something that's at least going to meet some of those needs.
That way you can really make a purchase that you're not going to regret just a little bit down the road.
It's kind of tough to see where you will be in three, four, five years, but at least have that kind of thought as you go into it. Right?
Exactly. Just have the conversation with yourself and oftentimes you might [00:05:00] find that it ends up guiding you in a slightly different direction.
But the future could also mean downsizing too; that my kids have left and I don't necessarily need this 20 to 25, 3,000 square foot home.
Maybe I only need a thousand. Right?
That's right. We work with clients all the time that will say, "You know what, it's really important for me to have a big backyard for my kids," Their kids are seven or eight, and the reality is is they're looking for their forever home.
Those kids are going to play [00:05:30] in that backyard for maybe a few more years and you're going to buy them an iPad and that backyard is going to get unused.
The reality is though is that those things change.
Or same thing, you buy this large home and you've got teenage kids and they have friends and five years down the road, those friends and those teenagers are now off in college or have got their own apartments and you're left with this space that is way more than you need.
Let's go to our number five thing that you should know when buying [00:06:00] a home for the very first time.
Yeah, I would say really think about your lifestyle. It's easy to be drawn in by a low mortgage payment or a really flashy property.
Maybe you see it and you're like, "Oh wow, that's great."
But if your lifestyle involves a long commute into work every day, you're probably not going to be so happy with your purchase down the road.
But if you don't like the hustle and bustle of downtown and you want to be able to leave that whole environment and get to some peace and some solitude, [00:06:30] then you're probably going to do what I did, which was move out to the suburbs.
I will happily take that compromise of a little bit more time to have something fit my lifestyle that I want to lead.
If there's parks or if there's rec centers, if there is other amenities in the area that really suit your lifestyle, then definitely have that home serve as really your base for the life that you're going to live around it.
Karl Yeh: Perfect.
Just to recap; the five [00:07:00] things that we talked about is:
- knowing the full cost,
- knowing your location,
- look at future needs, and
- look at the lifestyle you're willing to lead.
Question of the day
The question of the day I have for you is:
Do you have any additional tips for everything that we should know when buying your first home?
Let us know in the comment section below.
If you want to know more about buying a home, check out these playlists here as well as don't forget to subscribe and I'll see you in our next video.
About Brad McCallum:
Brad McCallum is a local Realtor with RE/MAX First in Calgary, Alberta. He's made his name for himself by incorporating his passion for videography and marketing, along with his wife and family into his real estate business. This fresh approach to real estate has allowed Brad to stand out in a market of over 5000 realtors. His knowledge of home design and construction as owner of a renovation firm for 15 years helps him advise his clients on the purchase or sale of their home.