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Is it Time to Buy a Home?
By John King

In meeting many renters and first-time home buyers at open houses and seminars, the question that is predominant is:  Should we buy a home or should we continue to rent? Many people that I come across appear to be slightly afraid to make the big plunge.  Pride of ownership is one of the biggest reasons to buy, along with the long term financial rewards once you have paid for your home.  It is often a dream that we all have from a very young age. Buying a home is not for everyone and it is important that people look at their personal goals and needs before taking on the responsibility.  Is it the right time? Well, many people will tell you to wait until a certain time of the year, or until prices go down. It is very difficult to predict from year to year what month is the best in which to buy.  Late fall and winter are usually quieter seasons, and often there is less chance of multiple offers on a specific property.

Although this is not usually the case, the local real estate market is booming!  We are finally seeing house prices move up and the market move from a buyers' one (where there are more sellers than buyers) to a sellers' one (more buyers than sellers).  This is wonderful for current home owners.  This is the type of market that increases the prices of homes across the board. In certain locations, there are very few homes for sale.  A list of clients who are desperately waiting for homes to come on the market is maintained.  Once a house comes on the MLS system, a flurry of agents arrange for appointments and in this market a newly-listed home often sells or at least has an offer in its first week or two.  It is not uncommon now to compete for a property with one or two other offers.

Although a sellers' market may not seem like the best time in which to jump into real estate, forecasters predict that the market is not going to slow down in the near future.  Local projections include a 5% increase in houses prices per year for the next four years.  That equals a staggering 22% increase.  You can do the math, but do you think it would be better to buy in the next 12 months or wait for two or three years?  If you are not in the market, you can't play the game.  The sooner you buy your first home, the sooner property appreciation will help you.

If you think it is time for you to make the plunge, the first thing that you should do is contact a local Realtor.  Someone who knows and understands the current market conditions and has the knowledge and experience to help you find your home.  You will meet with your Realtor and they will highlight the home-buying process. This is the opportnity to define your wants and needs.  Usually, your Realtor will ask you to get pre-approved from a lender first-hand, just so that you can define your financial parameters.  After you have defined your price, you can then begin to examine the types of properties and locations for which you are looking.  Don't be shocked at the types of properties that you will be finding in your price range.  Most of us are used to living with our parents and have big expectations right away. We expect our 'Dream Home' immediately and want to skip over the 'Starter Home.'  The last first-time purchaser with whom I met explained how they wanted to be within walking distance to downtown, have several thousand square feet of living space (including a double car garage and a main floor family room) and wanted to spend $130,000.  I had to do everything I could to contain myself from not falling off my chair.  I realized that there was some educating to do!

The best way to deal with this scenerio is to match financial capabilities with the homes that meet as many needs as possible.  It is good common sense to avoid buying a home that will stretch your budget and keep you from doing anything but paying for it.  A 'Starter Home' is a way to get into long-term real estate investment.

Your Realtor will then make appointments to show you selected homes.  This is your chance to ask as many questions as you can about the homes and neighbourhoods.  He/she will act as a mediator to head-off potential conflicts between you and the seller, will draw up the agreement of Purchase and Sale, finanalize and execute the contract, and forward the firm and binding agreement to your lawyer.

Buying a home doesn't have to be a stressful expensive proposition.  Working with a Realtor should be a fun and rewarding experience.  This next year is definitely a good time to buy a house and with interest rates still low on a global scale, you may want to consider locking into an interest rate.  Make your dream a reality and start packing!

John King is a Licensed Realtor with Coldwell Banker Rhodes & Co. and can be reached at johnking@cyberus.ca or at (613) 236-9551.