Your First Home. Kimberley Marr

      

      YOUR FIRST HOME

      A Buyer’s Kit for Condos and Houses!

      Kimberley Marr, CAAP, ABR®

       Self-Counsel Press

       (a division of)

      International Self-Counsel Press Ltd.

      USA Canada

       Copyright © 2012

       International Self-Counsel Press

       All rights reserved.

      Introduction

      Buying your first home is an exciting, big step. There is a need amongst first-home buyers for sound guidance, information, and disclosure of facts. Home ownership is a major decision; it is not just about acquiring shelter or making an investment. When you purchase a home you are buying a lifestyle. It is a place where dreams can become reality; for example:

      • Enjoying the warmth of a fireplace in the family room.

      • Preparing a home-cooked dinner in a spacious kitchen.

      • Fulfilling a gardening hobby or inviting friends and family over for a barbecue.

      Home is where we raise our children and share life experiences with family and friends. For many, home has even become a place of business thanks to the virtual office options we have today.

      Your home may be the largest financial investment you will make. For many, real estate is the cornerstone of their net worth — often the equity in a home is the resource that enhances finances during retirement. Buying a home can be an emotionally charged, confusing, and potentially overwhelming experience.

      If you simply mention that you are considering buying your first home, you are sure to get plenty of advice from well-meaning family and friends. While being well informed about the home-buying process and having experience is beneficial, often the advice and information is confusing or incomplete and may be based on someone else’s house-buying experience and personal results. Each situation is different.

      Now that you are thinking about this important financial decision, you will begin to notice information and advertisements about various aspects of the home-buying process. Walk into a bank and you will see brochures, posters, and booklets offering myriad mortgage products and options. Which mortgage product is best for you?

      Driving around town, you may notice open house signs, or new home billboards, each offering something special and distinct. Open up the real estate section of the newspaper and you will find pages of advertisements offering different housing options and special financing programs.

      Turn on the television or surf the Internet and you will hear different opinions about the market, the inventory, prices, interest rates, which areas are hot, and a host of other real estate related topics. You may be asking yourself:

      • Where do I begin?

      • Who should I contact?

      • How much can I afford?

      This can be overwhelming and somewhat scary. You may feel that you are on an information and option overload! At this stage, what you really need is an organized plan. Having knowledge helps to alleviate fear. Knowledge also provides you with the confidence to make prudent, well-thought-out decisions.

      Plan ahead, gather information, and ask lots of questions. Time and effort needs to be spent on your part in determining your unique needs, objectives, and financial goals. An informed buyer is a successful buyer.

      This book is the result of more than 23 years of real estate practice and experience. I have worked with lenders and mortgage brokers, home inspectors, insurance agents, real estate lawyers, accountants, new home builders, and contractors — all of whom have generously shared their time and expertise with me throughout my career. The process of purchasing real estate has several different moving parts and is a team effort. Often when we are embarking on a new project or journey, we don’t even know what we don’t know; this book will share the knowledge and experience that I have acquired as part of a team of professionals. A team of professionals in the real estate industry have reviewed the chapters related to their expertise and have added their insights and advice. First-time buyers need to have this information and understand the process and tasks to consider and complete before buying a home.

      My goal in writing this book is to show you a systematic, objective-oriented home-buying process. This book will provide you with information and resources so that you can create your own Home Buyer Plan unique to your needs, wants, and wishes. It answers questions from people just like you, with similar concerns and desires. It offers straightforward answers and clear explanations to help you feel more comfortable and confident in your home-buying decisions.

      After reading this book, you will be better prepared to make decisions as well as understand the role of ancillary professionals — other professionals who may become a part of your home-buying team. You will be shown how to qualify for and obtain a mortgage as well as become familiar with mortgage “lingo” such as conventional versus high-ratio mortgages, and the programs that Canada Mortgage and Housing Corporation (CMHC) or Genworth Financial Canada offer first-time buyers in Canada. Information is also included about how to set up and track your home budget, understand government programs and regulations such as the Five Percent Down Payment Home Buyer Program, First Time Home Buyers’ tax credit (HBTC), land transfer tax rebates, and Home Buyers’ Plan (HBP) in relation to your RRSP. My favourite topic is tips for paying off your mortgage quickly thereby building your equity and net worth.

      Tools and information are provided to assist you with defining your home needs, wants, and wish list including geographic considerations and housing types and styles. Information regarding the differences between purchasing a newly built home versus a resale home is also reviewed.

      This book includes topics about understanding the roles of the real estate agent (also called a broker), lawyer, and home inspector. By understanding the real estate agent’s duties as well as agency relationships, you will be better prepared to research and find a real estate professional to assist you with the buying process if you so choose. Lawyers are an important part of the real estate process; you will find information on legal considerations, agreements of purchase and sale, closing costs, and working with a lawyer. Home inspections and insurance highlights are also reviewed.

      The book has been set up in a format to enable you to utilize it as a guide. It will help you with planning and executing your own Home Buyer Plan. The chapters of the book are organized in the order in which you will most likely deal with topics and items during your home-buying process. This book can be used as part of your systematic, objective-oriented plan, so go ahead, feel free to write notes and highlight sections to put this book to use. Write down your plans, thoughts, and ideas. As you progress, you will be assembling a team of professionals who can provide you with additional information and tools to help move you through the home-buying process.

      Having knowledge is powerful. Your dreams, lifestyle, and goals are waiting. This book will provide you with information and tools to assist with your home-buying goals so that you can realize an enjoyable and successful first home purchase.

      Stop being confused, overwhelmed, and afraid. Let’s get started on your journey!

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      Renting versus Home Ownership: Do the Math

      You may have heard that owning real estate is a good investment. You may also wonder if this is a good time to be investing in a home. Perhaps you’ve read that prices