Three Tips for First Time Buyers

As a first time buyer, you’re probably experiencing a mix of emotions—excitement and anxiety.

Don’t worry! Even the most seasoned buyers feel a bit anxious. We’ve all gotten a case of the dreaded buyer’s remorse… but this time it won’t be over a shirt or a pair of jeans. You don’t want to make any mistakes when purchasing a new home.

How can you avoid a mistake? As specialists in Toronto’s loft and condo sales market, we’ve helped many first time buyers find their perfect home. Here are our top 3 tips for first time buyers:

Establish your budget

The most common mistake for first time buyers is that they focus on big numbers like $300,000 or $450,000. Instead, you should begin by looking at your monthly budget.

A $300,000 down payment may or may not translate into an affordable monthly payment and you should know the answer before you look at any properties.

How do you figure out your budget?


Look at your bills and other expenses. Weigh them against your income and establish what you can afford to put towards a mortgage on a monthly basis.

As a general rule, your annual mortgage payments and carrying costs should NOT exceed more than 1/3 of your annual salary.

If these costs are more than one third of your salary, you risk stretching yourself too thin financially.


Find a mortgage broker that you can trust. A good Mortgage Broker is indispensable because they work independently of any one particular lender. They will look at dozens of lending products and select the most competitive one for you.

This is a great advantage over going to a bank because banks only promote a handful of their own mortgage products.

Also, mortgage brokers are compensated by the lender that you select. You don’t pay any fees for their services (just like working with a realtor, who is compensated by the seller).

Know Your Closing Cost

Be sure to calculate these in advance. For first time buyers, they tend to be about .5% to 1% of your purchase price. That is very low—compared to a regular purchaser who pays about 2.5% in closing costs.

A good realtor will recommend a handful of contacts, from lawyers to mortgage brokers to moving companies.

All of these contacts should range in price to fit any budget, but range very little in terms of service quality. Your agent should also draft a budget for you, based on your selection.

Hire a Realtor

Your realtor should know the areas and properties you’re looking for. If you’re looking for a house in Ajax, don’t hire your best buddy from Thornhill. He will only have a vague sense of the market value in Ajax and sellers DO NOT always make a habit of pricing their properties at fair market value.

What sellers do make a habit of doing, is hiring agents that are experts at convincing buyers of the “legitimacy” of their purchase price—whether this is true or not.

You’ll literally save thousands of dollars if you hire an agent that knows the market you want to buy in and can use that knowledge as leverage in negotiations.

There is certainly more to buying a property. However, if you follow these 3 tips, you’ll be way ahead of most!

If you’re looking for a condo or loft in Downtown or Midtown Toronto, that’s certainly our area of expertise, contact us. We’d be happy to help out!

Robert Van Rhijn

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