Buying a home for the first time is a major milestone in life, and it’s not an easy thing to accomplish. It can take years of hard work and saving, and when you’re finally ready to settle down and buy your first home, you’ve got a whirlwind of viewings, offers, and inspections ahead of you. If it all feels like a bit much, we’ve got your guide to buying your first house in Ottawa.
#1 Saving Your Down Payment
Your down payment is the amount of money you have to put upfront to buy your home. The rest of the funds come from your mortgage, but first, you need a sizable lump sum. A down payment is usually between 5-20% of the value of the house. The CMHC requires that homebuyers pay more for mortgage default insurance if their down payment is less than 20%, and mortgage default insurance is not available on homes that cost more than $1 million.
The first step is often the longest, but there are several tools you have at your disposal to speed up the process of saving for a down payment. This includes contributing to a First Home Savings Account (FHSA), your TFSA, and even your RRSP.
#2 Getting Mortgage Pre-Approval
Most first-time homebuyers will need a significant loan beyond their down payment to buy the rest of their home. When you’re making bids on houses, you don’t have time to seek out mortgage approval for every separate house, which is why you get mortgage pre-approval.
Mortgage pre-approval is not a guarantee that you will secure the mortgage you want, but it tells you what you’re likely to be approved for, helping you make more informed decisions about the kind of properties you can afford. Mortgage pre-approval will tell you:
- How big of a loan the mortgage lender will approve.
- How much you can afford in a home.
- The interest rate you can expect.
- The size of your monthly mortgage payment.
#3 Starting Your House Hunt
Now comes the fun part. While house hunting can feel stressful once you’ve committed to buying a home, this is also the part where you get to imagine all of the possibilities.
Your real estate broker is a great source for home listings, but most homebuyers will also want to look for themselves. When you’re looking for a house for sale in Ottawa, you can find tons of listings online. Realtors today list properties on multiple sites where you can view photos, price, location, and details.
To avoid getting overwhelmed, there are a few criteria you can use to narrow down your search. Location is the best place to start. The perfect location for you depends on the life you’re planning. If you’re looking for the maximum amount of space you can afford, check out some of the city’s more affordable suburbs, like Orléans, Barrhaven, Nepean, and Kanata, or towns out in the Ottawa Valley.
If you’re looking for a starter condo or a more urban lifestyle, up-and-coming neighbourhoods like Hintonburg-Mechanicsville, Carlington, and Beachwood are among the best in the city, with a mix of new condos and older fixer-uppers.
#4 Viewing Properties
This is where it pays to have a great real estate agent. You don’t need an agent to view properties, but they handle all of the logistics, including scheduling, and your agent should be a great source of information about the neighbourhood.
When it comes to viewing properties, most agents recommend limiting it to about 8-10 properties. Once you get past that limit, you’re going to start feeling exhausted, and many of the properties will start looking the same.
Appointments typically last between 30-60 minutes, and they’re often scheduled very last minute. That can make the whole viewing process stressful. When you’re serious about buying a home, it’s a good idea to limit your other commitments so that you can make it on a moment’s notice. While most viewings are going to take place on evenings and weekends, some sellers are more particular about scheduling viewings and may restrict the viewings to short or inconvenient windows, and there won’t be much you can do to change that.
It’s also good to keep in mind that if the property you’re looking into is tenanted, the seller is required to give the tenant 24-hour notice of a showing in Ontario, and you usually won’t be able to get in to see it earlier, regardless of the circumstances.
#5 Making an Offer
Once you find a property in your viewings that you absolutely love, it’s time to start making offers. This is another area where the expertise of your real estate agent will be invaluable. It can be very confusing whether the sellers are expecting a bidding war, are open to negotiating downward, or if they expect to sell for more or less the sticker price.
One piece of advice that some realtors share is to look at the bidding window. Sellers who accept bids at any time probably value their home at around the listing price, whereas sellers who are accepting bids on one night only generally expect a bidding war.
#6 Inspections and Conditions
A home inspection is a critical part of the buying process. Once you’ve had a bid accepted, it should still be contingent on a successful pre-purchase inspection, where a professional will visually evaluate the condition of the home.
They will identify any major issues that you should know about before you buy the property, including problems with the basement plumbing, cracks in the foundation, mould, water damage, the age and condition of the roof, and other essentials. It should be conducted by a licensed inspector.
Ottawa is an incredible place to buy your first home, raise a family, and put down roots. From saving for your downpayment to the pre-purchase inspection, plan your moves to find your dream home.