Ottawa has become the #1 home buying destination for Millennials moving within Canada. A recent study found that Millennials are leaving cities like Montreal and Toronto to search for more affordable options.
Ottawa (especially the neighbourhoods of Barrhaven and Kanata) is quickly becoming a location of choice because of its affordability relative to other major Canadian cities.
Homeownership will be harder to achieve for this cohort than it was for Gen Xers and Baby Boomers. Millennials may have higher incomes and more assets than previous generations had at the same age, but they’re also carrying more debt and taking on larger mortgages relative to their incomes.
Still, exceptionally low-interest rates have provided Millennials with an incentive to think about getting into the housing market now rather than waiting until later. The youngest Millennials will be 25 next year, and the oldest will be 40, so many of them are buying their first homes and starting families.
While some Millennials may naturally want to go house hunting online without an agent, when it comes to buying a home for the first time, nothing can replace the guidance of an experienced real estate agent.
If you’re among those hoping to make the transition from renter to homeowner, here are a few guidelines to get you started.
Once you’re ready to make the jump to homeownership, the first step is to determine what you can afford and how much of a down payment you can put down.
Speak with your financial institution to find out what size mortgage you qualify for. They’ll take your income, debts, and credit rating into account and tell you what size mortgage loan you’d be eligible to receive.
Your bank or lender can also tell you about programs in place to help first-time homebuyers, such as the ability to borrow from your RRSP.
Just because the bank approves you for a certain amount doesn’t necessarily mean that’s what you can comfortably afford to pay. Do your own calculations as well based on your expenses. Having a financial cushion to allow for the unexpected will help you sleep better at night.
Real estate agents have many contacts at financial institutions – lenders, bank executives/managers – and they can give you recommendations to help you get the best rates possible and provide advice on financing options.
Use your real estate agent’s power to work in your favour.
Find a real estate agent you trust and feel comfortable working with. This is likely to be your life’s most significant investment, so do your homework before choosing an agent. Don’t be afraid to interview multiple agents to find the one you feel most comfortable with.
Once you’ve chosen an agent, have a conversation about what you’re looking for in a house. Do you want a detached house, or is a semi-detached or townhouse a possibility? What about a condo?
What features and amenities are most important to you – large back yard, workshop, main floor laundry room? Which are your preferred neighbourhoods?
Agents look at houses day in and day out and can tell you about the various options available. They know which features are particularly popular with other Barrhaven home buyers and why.
While you might never have given much thought to the idea of an ensuite bathroom, for example, your agent might point out that families with young children enjoy having a ‘child-free zone’.
You can leverage your agent’s extensive experience to help you refine your priorities and define your needs and wants in a home.
Once you’ve established your preferred budget and what you’re looking for in a home, your agent can get to work finding available properties that match your requirements. While you can look at properties online, your agent will have access to portals you can’t access publicly.
In a hot market, houses sell quickly, and, in many cases, your agent will have access to knowledge about what’s coming on the market before it hits the market. This is why it’s important to include your real estate agent in discussions about what you’re looking for in a home.
The better they understand what’s important to you, the better they’ll be to help you find the perfect home for you.
As a first-time homebuyer, you may find that your wants and needs change throughout your home buying journey. Where you start may not be where you end up. As you view different properties and become more aware of the options available, your priorities may shift.
If you find that your budget doesn’t yet stretch far enough to purchase your ideal home, you may need to make some trade-offs. Maybe you need to accept a longer commute to get the size house you want. Or you might need to start with a townhouse or condo and move up to a detached home once you’ve had a chance to build some equity.
When it comes time to make an offer, your agent knows how to negotiate the best deal for you.
Buying your first home can be both stressful and exciting. Rely on your agent’s experience and connections to make the process go as smoothly as possible.
Buy and sell with confidence.
Choose the MacDonald Property Group.
At MacDonald Property Group, we have a dedicated full-service team under one roof ready to provide the expertise you can trust. With over twenty-five years of experience in real estate, we have sold and bought over a thousand homes. We’re proud to say that we’ve helped thousands of clients in Barrhaven and across the Ottawa area close a deal with confidence and satisfaction.