Today’s market brings specific challenges to buying your first home. Rising prices, inflation, and fluctuating interest rates all play a role. Understanding the market, the home-buying process, and what questions to ask will help make the process easier and more enjoyable. Read our guide to buying your first home in today’s real estate market

Today’s Market for First-Time Home Buyers

The pandemic brought rising prices, bidding wars, buying homes sight unseen and multiple offers, sometimes hundreds of thousands over asking – a fierce seller’s market. In 2022, rising interest rates and inflation lessened buyer interest, and the market began to cool. Gone are the days of skyrocketing prices. The real estate market is slowly levelling out.

Questions to Ask Before Buying Your First Home

• What is your timeline?

Do you have a goal to buy a home in the next 6 months, 2 years, 5 years, or 10 years? How long do you have to save for a down payment?

• Are you ready to buy a house now?

How do you know if you’re ready to buy your first home? If you look to the future and see yourself settling down in one area, you’re in a comfortable financial position and have saved a down payment. If you’re prepared for the extra costs of being a homeowner, it may be time to enter the world of home ownership.

• What do you need (and want) in a home?

When making your home buyers checklist, look at your current needs and what you may want in the next few years. Do you have a family, or will you be starting a family? Do you work from home and need office space? Break up your list into needs that are essential and wants which can be compromised on if required. Knowing your priorities will help you and your realtor find the best options.

• Have you taken a deep dive into your finances?

An open and honest conversation about your finances is essential before buying a home. Knowing what you can afford and when you can afford it is paramount. A financial professional can give you a snapshot of your credit score and suggest how to get you closer to your goals.

• Have you gotten pre-approved for a mortgage?

If you’ve done your financial deep dip and discovered you are ready for your first home, the next step is to get a mortgage pre-approval. Once you know how much you can borrow, you can look at homes in your price range.

• Will you work with a real estate agent?

One of the first choices you will make is whether or not to hire a real estate agent. Having a professional on your side to lend support, guide you through the process and answer your questions makes the entire home-buying process much more enjoyable and less stressful.

• Have you chosen your location?

Is there a specific area you want to be in – Somewhere close to your work, a neighbourhood you love, or a spot close to family or friends? Defining the boundaries of where you want to live will help you get a realistic view of what is available within your price range.

In addition to these questions, let’s dive into the process and guide to buying your first home in today’s real estate market.

First-Time Home Buyers: The Process

1. Find your Realtor

Choosing a realtor who is right for you will make the whole process so much more enjoyable. Look for someone knowledgeable in the specific area you are looking to buy in. Insights into particular neighbourhoods, school districts, and local amenities are invaluable when searching for your first home.

2. Get a financial overview and mortgage pre-approval

Knowing how much house you can afford is a big first step in the home-buying process. Knowing how much you can borrow will ensure you’re looking at homes within your budget. While pre-approval isn’t a requirement, it strengthens your offer considerably once you find a home you love.

3. Let the search begin!

Once you have your list of needs and wants, you can start searching for your home. Things to look at include location, square footage, number of bedrooms, outdoor space and nearby amenities. Work with your realtor to find the home that best suits your needs.

4. Make your offer

Once you have found a home that is right for you, it’s time to make an offer. Your realtor will guide you through this process, helping you decide on a competitive offer based on the home and current market conditions. There may be some negotiation required during the offer process, so be prepared for a bit of give and take.

5. Congrats – your offer is accepted!

Once your offer is accepted, it’s best to conduct a home inspection. Having a professional come in to do a once-over of the house and property can bring to light any potential problems. Your bank may also ask for a home appraisal to ensure what you are offering is in line with the market value of the home.

6. Close the deal

The closing process involves a few steps, including final negotiations of the offer if necessary, acquiring financing and signing paperwork. Once the paperwork is signed by all parties and the funding approved, you are officially a homeowner! 

Buying your first home in today’s market can be a challenging and rewarding experience. Getting the right professionals on your side can make all the difference. As a first-time home buyer, the process can seem intimidating and overwhelming; experts with market knowledge are an invaluable resource. We hope this guide to buying your first home in today’s real estate market has been helpful.

As a first-time home buyer, you’ll want to check out these articles too:

12 Homeowner Responsibilities New Buyers May Not Know

Real Estate Glossary of Common Terms

If you are ready to start the search for your first home in the West GTA, we are here to help! Reach out to book a consultation.