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If you’re dreaming about the day you’ll own your own home and are wondering where on earth you’d even begin, you’ve come to the right place.

Here are seven things every first-time home buyer should know before you think about house-hunting:

#1 There are ZERO real estate fees

When you sell a home, the seller pays a fee to their Realtor® (the listing agent). If that home is listed and sold by that listing agent, the entire commission fee goes to them. If, however, the home is sold with the help of another Realtor® (the buyer’s agent), they will get a cut of the commission. The bottom line: the buyer doesn’t pay any fees to a real estate agent.

You are really in the driver’s seat as a buyer. Just because you will not be out of pocket for real estate agent fees, it doesn’t mean you should settle for the first Realtor® you reach out to.  Make sure you interview three potential agents to and ask them about:

• their experience
• their customer service philosophy, infrastructure, and guarantee
• whether they offer their buyer clients VIP access to their listings before they go on the market, and
• whether they provide a comprehensive market review of properties you’re interested in and what that review consists of.

Here are some other things to consider when selecting a Realtor®:

#2 There’s a tonne of paperwork

Whether it’s paperwork related to your mortgage, insurance, or an offer on a home, you’ll be putting your John Hancock on a lot of documents – many of them, contracts. If you’ve got the right Realtor® working for you, they will not only be advising you about your next steps throughout the process and making sense of the Realtor-speak (like, what’s a chattel?), they will also be expert negotiators. Your real estate agent’s job is to negotiate the best deal possible for you while protecting you and helping navigate you through the sea of paperwork.

#3 Buy with the future in mind

A Greek philosopher once said that change is the only constant in life. I’m sure Heraclitus didn’t have real estate on his brain when he said this, but the principle does apply. When you’re thinking about the kind of home you need, think about what your life will be like five or ten years from now. Do you think you’ll be working for the same employer in the same location? Are marriage and kids in your future? Have you got young children who will be teenagers in a few short years? You likely aren’t going to be putting a serious dent in the principal of your mortgage for the first few years, so consider carefully whether it would be worthwhile for you to buy a home and then move into something more appropriate not long afterwards.

#4 Buy what you can afford

Being house poor is a bad idea. No matter what your future holds, keep this in mind when considering #3. Consult with a mortgage professional to get the best advice about your specific situation. A pre-approval before you begin house-hunting is always a good first step.

There are two basic affordability rules to remember:

• Your monthly housing costs (principal mortgage, interest on your mortgage, property taxes, heating) shouldn’t be more than 32% of your gross monthly income. For a condominium, this would also include half of the condo fees. For a leasehold, this price would include the entire annual site lease.
• Your entire monthly debt load (housing costs plus other debt payments) should not be more than 40% of your gross monthly income.

# 5 You’re in this for the long haul

Commitment. It’s a scary word these days, but it’s one you’ll have to get comfortable with if you’re planning to enter the real estate market with someone. If you’re buying a home with a significant other, friend, or business partner, you need to think about this as a long-term, committed relationship. Most mortgages are 25 years and, unfortunately, not all partnerships last that long. It’s a good time to buy a home, and many people aren’t able to afford the purchase of one on their own. With interest rates beginning to rise, buyers may be feeling the pressure to get into the market now, and with good reason; but don’t let that cloud your judgement. Consider your commitment level carefully before taking the plunge into buying a home with someone. If you are planning to make a purchase with someone who is not your spouse, it is wise to engage a lawyer to put together an agreement that outlines what will happen with title, mortgage payments, liability, repairs, etc. in case the partnership comes to an end.

#6 Consider all the costs

If you’re buying a home that needs some TLC, make sure you have an accurate appraisal of the costs involved in fixing up your fixer-upper, including labour which can significantly increase the budget required. Don’t forget to budget for things like legal fees (starting at about $1,000), moving fees, utility hook-ups, movers, storage rentals and cleaning services. Other fees include adjustments, which are common. Any applicable adjustments will be made on closing. For example: If the seller has paid for six months of the property taxes and you are closing with three months remaining of that prepaid tax, the seller will need a reimbursement from you, the buyer, on closing. This will be part of the cheque given to the lawyer.

#7 You don’t have to buy a house

Where is it written that you have to buy a detached home with a white picket fence? The truth is, you don’t. Buying a house may not be the best fit for your lifestyle or budget, but there are other options. Condominiums, townhouses, or semi-detached homes may be perfect for you.

For more tips and information on home buying, check out my other blogs:
Home Buying Fact or Fiction
8 Tips to Help Millennials Live the homeownership dream

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