12 Apr 2020

Sonia on Sundays: Buying your first home in NL

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Sonja Krajewska is the Community Settlement and Integration Counsellor (Permanent Residents) at the Association for New Canadians.

The song “Home, Sweet Home” is from the 1823 opera Clari, or the Maid of Milan. The lyrics say, in part, “Home! Home! Sweet, sweet home! There’s no place like home!” Today ‘Home, Sweet Home’ is used as an expression of pleasure or relief at being in or returning to home.

Newcomers to Canada could face many challenges in a process of finding and creating their new forever homes. At first, they might choose renting a property. But with time, after settling in Newfoundland & Labrador they might want to invest in buying a house.

Buying a property requires a lot of time and effort — and knowledge about local housing market. First time home buyers might find the process to be challenging and emotional. Buyers want not only to find a perfect home for themselves and their family, but also to ensure that they are investing in the right property which will maintain its value.

Today I decided to reach out to Nicole Darbaz who graciously agreed to shed some light on the housing market in NL. Nicole is a top producing Realtor located in St. John’s. Working with Keller Williams Platinum Realty, she helps buyers find and purchase properties at a great price that suits their needs, endeavouring to make sure that it is a good investment for their future. She is connected with local bankers, home inspectors and lawyers, to help  get the financial advice, home inspection, and legal help that buyers need in order to buy a home. In 99% of cases, it does not cost anything to work with a real estate agent when you buy a home in Newfoundland; it is a free service.

Nicole has answers to some common questions for first time home buyers in NL.

What is the first step I need to take when buying a house in NL?
The first step is to schedule a meeting with a local bank, credit union, or mortgage broker to secure your financing. This will help you determine how much you can afford to spend on a house.

How much money do I need to have in my bank account to be able to buy a house?
In order to get a mortgage loan, you will need to have a down-payment saved. The amount you will need to have saved will vary depending on your unique situation. The minimum it will be is 6.5 per cent of the purchase price of the home, five per cent minimum down payment, and 1.5 per cent for closing costs. For example: Using today’s average purchase price of $281,000, you will need 6.5% of $281,000 saved, which is $18,265.

What is the best time of a year to buy a house in NL and how long does it take to find one and buy it?
You can buy a home any time of year in St. John’s. There is no “good” or “bad” time. Typically, there are more homes for sale between April and October, so you will have more options, but you can buy any time.

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Nicole Darbaz is a St. John’s Realtor.

How long does it take to buy a home?
The first stage of buying a home is finding the one you want. The second stage is offering on a home and waiting to get the keys. It can take as little as one day to find a home, or up to a number of weeks to find a home. It depends on the time of year, the price range you are looking in, and the type of home you are looking for. Once you find a home and your offer is accepted, you can’t move in immediately. It will usually be a minimum of 30 days before you get the keys and can move in. Sometimes closings can be more than 30 days: 45, 60, even 90 days. It will depend on the agreement you make with the home seller. Your Realtor will help you with that.

How do I find a home?
A Realtor will have several tools to help you find a home. Here are some of the top ways to find homes for sale in Newfoundland:
   – Your Realtor will suggest homes to you to see
      o You can ask your Realtor to pick out properties for you to see that they think are the best value for you based on your needs.
   – Realtor custom email home search
      o This is a search your Realtor will specifically set up for you and it will email you all the properties for sale that fit what you’re looking for. From there, you can pick            out the homes to tell your Realtor that you want to see
   – Websites or mobile apps: You can view homes for sale on local mobile apps or on websites
      o Try Realtor.ca, mls.ca or even Kijiji – but be wary! “For sale by owner” can lead to purchasing problems.

What are the most important things to consider when comparing houses?
The most important aspects to consider when comparing houses are:
    – Price
   – Size (square footage)
   – Location – is it near schools, public transit, shopping, work, etc.?
   – Features … notably
      o Number of bedrooms
      o Number of bathrooms
      o Developed or undeveloped basement
      o Paving / parking
      o Outdoor space
      o Garage or no garage

What about considering the future value of the house?
When buying a home, it is important to make sure that it is a good fit for your family’s needs; but in addition to that, you need to make sure you are buying a good investment. What I mean by that is, you’re buying a home that will – as reasonably as we can expect – hold its value and be a desirable home for someone else to purchase when you’re ready to sell. This is something your Realtor will help you with. Additionally, in order to maintain the value in your home, it is your responsibility as the home-owner to maintain it properly and consistently. Your home is an investment; and like a car, in order to ensure your home keeps its value, you need to keep it clean and perform repairs, preventative maintenance and cosmetic updates regularly. If that is not a responsibility you are willing to take on, then you will need to ask yourself if homeownership or renting is better for you.

What are the biggest mistakes first time buyers should avoid?
The three biggest mistakes home buyers make are:
   – Not getting pre-approved for a mortgage before looking at homes. You need to have your financing sorted before you look at anything to ensure you can buy the
        home at the price you’re looking at.

   – Not hiring their own Realtor. Do not call the Realtor on the sign outside of the house that you like. It doesn’t cost you anything to have your own representation.
   – Not taking the time to write a list of what they want before they go out looking. (Specifically: Location and number of bedrooms)

I found a perfect house! How do I make sure I can close the deal before somebody else does?
Get pre-approved now and hire a Realtor today, so that when the perfect house hits the market, you are ready and have the right team to help you buy and secure that property. Like anything, success is in the preparation.

Any other advice for the buyers?
Get started with the process early, even if you’re not planning to buy for a year or two. Book a meeting today, and learn as much as you can while you wait. As with anything, knowledge is power. Even before you start hunting for your perfect home you may want to find a Realtor who can help make your first house purchase a positive experience.

Do you have any questions or need assistance with settlement in Newfoundland & Labrador?
Contact me at skrajewska@ancnl.ca

Read all Sonia’s blog posts here.