Fierce and epic all rolled into one, she’s an absolute rockstar. Jessica Hastings-Lesperance was Raised with Real Estate™ her entire life. She is co-owner, Marketing Visionary, Director of Operations, and realtor® at the Terri Hastings Real Estate Group/Keller Williams Realty Centres, one of the top producing Keller Williams teams in all of Canada.
Owning a home is still a common aspiration. However, with rising mortgage rates and home prices, buying that first home can feel like the odds are stacked against you. With the right financial approach, however, buying a home can still be an attainable goal. Aside from the age-old advice to “save your money,” there are several crucial ways to be wise about your wealth so you can break into the real estate market for the very first time. Here are the ultimate 5 tips on how to buy your first home and break into real estate.
1. Understand your current finances
Before looking at properties, it’s important to reflect on your financial situation. This step is crucial for anyone entering the real estate market, whether you're an individual, part of a dual-income family, etc.
Review your household’s income, expenses, and savings to determine how much you can afford for a down payment and monthly mortgage payments. Consider whether your finances will be changing in the future. Are you expecting a raise? Changing jobs? Getting married? Or expecting a child?
Also, check your credit score to get an idea of what mortgage rate the bank might offer. Reflecting on your finances will help you create a realistic budget and understand if you are financially ready to embark on the home-buying process.
2. Research the market
Knowledge is power in the real estate market. Spend time researching different neighborhoods, market trends, and property values. This research is especially important if you’re moving to a new area.
If you’re doing this market research on your own, look at the prices of what’s currently for sale and examine neighborhood amenities. It might also be worthwhile to look into any future growth areas if you’re looking to maximize your property value. See if there are planned developments or new schools where you’re looking to move.
While this research might seem daunting, working with a local realtor® can offer guidance and expertise to help you understand the market you want to enter.
3. Define clear needs and wants
With your research done, now it’s time to revisit your budget. Write down a list of clear goals, wants, and needs—all while considering how much that will cost.
Start with your priorities. Determine what features are essential, like the number of bedrooms, bathrooms, garage, location, nearby amenities, and more. Then, move on to features that would be nice to have, like a pool, a big yard, a finished basement, etc.
Understand that you may need to compromise on some aspects to stay within your budget. But even if your budget is tight, don’t immediately write off creating a wants list. You never know when the perfect home will come along that might have a few of your wants. Just start with what’s attainable and assess your budget.
4. Build a financial foundation
Now you’re ready to start building a financial foundation. Research current programs, like using savings accounts (for down payments) or first-time home ownership programs/grants from the government. These assistance programs could help you save more money and reach your home ownership goals sooner.
One of the biggest hurdles for first-time home buyers is saving for the down payment and closing costs. It’s generally recommended to have at least 5.5-10% of the home’s purchase price saved for a down payment, though this can vary. With a price range in mind for your ideal area, aim to save more than the minimum required to ensure you're well-prepared. Additionally, don’t forget to budget for extra costs such as moving expenses, legal services, and the land transfer tax, which can vary depending on the purchase price.
A higher credit score may help to reduce your mortgage interest rate, saving you thousands over the life of the loan. Pay down existing debt, avoid opening new credit accounts, and make all payments on time to boost your score.
Finally, getting pre-approved for a mortgage will also tell you how much you can afford. This not only sets a realistic budget but also shows sellers that you are a serious buyer. Pre-approval involves a lender reviewing your financial information to determine how much they are willing to lend you, which can streamline the buying process and give you an edge in competitive markets.
5. Find the right real estate professional
The right realtor® will guide you through this process every step of the way. This expert support could be crucial for first-time home buyers new to navigating the real estate market.
Find a real estate agent who specializes in working with buyers and knows the local market. Get referrals from friends and family or read reviews to find a reputable agent. Talk to more than one realtor®.
Not only will a real estate professional provide valuable insights and negotiate on your behalf, but they are also the perfect person to help you understand the process and connect you with other professionals such as mortgage brokers and lawyers when entering the real estate market. Remember, patience and diligence are key, and working with experienced professionals can make your journey much smoother.
Conclusion
Breaking into the real estate market as a first-time home buyer can seem daunting, but with the right approach and resources, it’s entirely possible. By understanding your finances, researching the market, defining your needs, building a strong financial foundation, and working with a knowledgeable realtor®, you can navigate the process successfully and find your dream home. Remember, preparation and patience are your best allies in this journey.
Jessica Hastings Lesperance, Realtor®, Director of Operations, Co-Owner
Fierce and epic all rolled into one, she’s an absolute rock star. Jessica Hastings-Lesperance was Raised with Real Estate™ her entire life. She is co-owner, Marketing Visionary, Director of Operations, and realtor® at the Terri Hastings Real Estate Group/Keller Williams Realty Centres, one of the top producing Keller Williams teams in all of Canada. Jessica is an inspiring entrepreneur, real estate investor, coach, speaker, and published author. She has been featured on major media outlets including podcasts and real estate TV talk shows and has been published in various magazines. Recently, she was recognized as one of Canada’s Top Fitness Instructors for 2023 by Impact Magazine.
