Being a first-time homebuyer in today’s market feels a bit like being picked last for your elementary school dodgeball team. That sinking feeling of “When will my name be picked? “When is it my turn?” With the prices as high as they are in the housing market right now, is it even possible to get into the market? Can young adults realistically purchase a home?
The short answer is yes. But how? When the average price of a detached home is over 1 million dollars, how are first-time homebuyers supposed to dip their toes into the market, let alone go all in?
You need to be realistic and set yourself up for success. No, you might not be able to afford a detached home right off the bat, but there are other options, like condos.
Condo prices don’t typically increase at the same rate as detached homes. They’re a great way to get your foot in the real estate door and the likelihood of being approved for a mortgage for that amount is very plausible.
Here are a few tips:
Get pre-approved through a mortgage broker or mortgage provider that works regularly with your Realtor® or is recommended by them. This is the most important step.
Work with a Realtor® that will create a personal property website tailored specifically to your exact needs.
If there is a possibility of multiple offers on a property, find out when the seller is reviewing offers and have a pre-inspection prior to this date so you are familiar with the property’s condition and don’t need to include an inspection as a subject condition.
Also, find out any other terms that would be important to the seller, such as closing date and which day they would like to hand over the keys.
First-time home buyers usually get into the market by purchasing a condo or townhouse. This means there will often be hundreds of pages of strata documents to review. Make sure you know what to look for and that your Realtor® is familiar with strata bylaws and common points to look out for. Carefully review the restrictions mentioned in the bylaws. Also, review the depreciation report so that you know what improvements are upcoming and whether or not there is enough money in the contingency reserve fund. If there isn’t enough saved, the owners will have to pay for the improvements with special levies.
Be encouraged—there are ways to buy in this market, even with prices as high as they are. All of my clients have been successful with purchasing a home because they didn’t try to time it with the market. Again, start by finding an experienced Realtor® who knows the ins and outs of the real estate market you’re looking to purchase in. Then, qualify for a mortgage. My clients have been able to purchase as soon as they were able to qualify for a mortgage, for as little as 5% for a down payment.
That could be you!