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As of January 2021, the Waterloo Region has seen housing prices increase over 20%. A home that may have listed at $600,000 last year is likely now going for $700,000 or more. At Team Pinto we have closed properties recently at more than $100,000 over asking price.
Despite the obvious pressures decreased housing affordability has on people’s ability to become first home buyers, buyers of all generations have had to make compromises when buying their first home.
Having a firm grip of your finances, your budget, your expectations and your lifestyle will help you navigate what is most important to you when buying a property. Here are the dos and don’ts of what you should compromise on when buying your first home in a market like the one that exists in the Waterloo Region right now.
The Do’s and Don’ts of Buying Your First Home in a Tight Market
DON’T compromise on your time. Are you really willing to commute two hours in the morning and two hours in the evening for five days of every week? If it sounds like torture, it may not be worth it.
If you don’t have a family and can be productive during these hours, such as while on a train, then it may be a feasible option, but do picture the reality of commuting for an extended period.
If you are likely to remain working remotely for the near future, as many are, then this may be a consideration too, as a commute is not something you need to worry about right now.
However, if this all likely to be temporary then don’t buy something too far out if it will be a problem if and when you are called back to a ‘real’ office.
DO compromise on space: if you don’t need the extra bedroom, go without it at this stage, especially if it means you improve your location, or just actually buy a home. This is something to consider even more if there is room to renovate and create space in the future, such as adding a bedroom in the basement or attic.
DON’T compromise on built quality/structural integrity when buying your first home. If it is the land you are interested in, and it is an investment property that you are buying as your first property, then that may be one of the few instances where the quality of the build isn’t as important.
Otherwise, you may find yourself spending extra money on a series of repairs if your home isn’t up to scratch.
DO compromise on your garden. Especially if it means increased space inside. You can make the most of local parks – there are lots of those in Waterloo Region – and you may find that you end up outside more and having a greater interaction with your local community if you head to your local parks for a bit of greenery
DON’T compromise on checks and balances. When buying a home ensure you have professional support to help you make the most of your savings and avoid any costly mistakes.
Develop strong working relationships with key pillars of support, especially a great real estate agent. A buyer’s agent may even be able to help find a property that limits the need to make too many compromises.
DO compromise on room size. As long as you aren’t living under the stairs like Harry Potter, consider expanding your storage solutions so that you can compromise on the size of, for instance, your bedroom.
If you do compromise on the size of a room, do not compromise on natural light or windows. These will help create a sense of space.
DON’T compromise on your budget. The number one mistake you can make is to spread yourself too thin. Be sure of what you can afford and scrutinize any mortgage lender’s attempt to enter you into a high-risk financing solution if it means you have little cash flow left.
DO compromise on your tastes. You may not get your dream home first time around. Just ask older generations whether their first home was their ‘dream’ home. More than likely they bought it on a shoe string and had to put up with that leaky roof for at least a year.
If you find your home a little ugly for a while, remember that it isn’t forever and there are countless others locked out of the property market.
DO Listen to your agent. As a buyer you don’t HAVE to work with a real estate agent, but boy does it help! An experienced real estate agent can help you make some of these sensible compromises and help keep you going – and your spirits up – when it feels like you are never going to get a house.
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