The last few years have been relatively tough on first-time home buyers, especially in Mississauga and other highly desirable areas of the GTA. That said, many younger residents are starting to see the benefits of homeownership and are moving mountains to make it happen, often with the help of parents or grandparents.

While getting assistance from older family members is one way to make the impossible possible, there are also many challenges when that family member has been out of the market for some time. Combine family dynamics with high housing prices and fluctuating borrowing costs, and you may find the road ahead has a few bumps before finally reaching your goal.

In this post, we’ll provide some guidelines to make your path to your first Mississauga home as smooth and streamlined as possible. 

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Begin Planning Early

The sooner you start preparing for the idea of buying a home, the easier the process will be once you’re ready to make your move. Not only does it allow you the maximum amount of time to save for your purchase, but you can also take advantage of various programs designed just for first-time buyers.

Early planning also allows you to involve your family from the beginning. They will naturally have your best interests at heart and want you to get the best home for your money. Unfortunately, a lot may have changed since the last time they made a purchase.

Negotiating techniques that once worked can now backfire and even cost you the house you want. It’s helpful to get an overview of the latest market trends and statistics before diving into the process.

Are you ready and able to buy your first home? Our First Time Buyer Health Check can help you decide. Take the quiz here.

Resources for First-Time Buyers

Buying a home is generally far more challenging for first time buyers than established homeowners with equity behind them. Fortunately, there are several resources that will help to ease part of the burden.

  • First Time Home Savings Account: An investment account for Canadian residents between 18 and 71. You can contribute up to $8,000 per year to a maximum of $40,000 towards your first home purchase. Though your contributions are capped, you will also benefit from any dividends or gains in equity over and above your investment.
  • Home Buyer’s Plan: You can withdraw a maximum of $35,000 from a tax-sheltered investment towards your purchase. You then have 15 years to repay these funds to avoid a tax penalty.
  • Land Transfer Taxes: First-time buyers can access an instant rebate of up to $4,000 off one of the most significant closing costs. 
  • First-Time Home Buyer Tax Credit: At tax time, you can claim up to $10,000 on your income tax return, which results in a credit of $1,500.

Understanding what is happening in the market before making a life-changing decision is always helpful. The posts below will give you some valuable insight:

Be Realistic About Your Range

Today’s market conditions often mean resetting your expectations – and those of anyone helping you make your purchase. Setting a budget remains essential. 

However, being overly committed to staying at the bottom of your range in today’s market may mean consistently getting outbid by other buyers, especially during competitive situations. A better strategy is often to just focus on affordability rather than worrying about whether your housing costs add up to less than a certain percentage of your income.

  • How much financial assistance can you count on from your family members who are offering to help?
  • Do you have enough funds set aside for a down payment and to cover your closing costs?
  • Will you have enough income to manage the monthly mortgage with some left over for repairs, maintenance and other living expenses?

If the numbers add up, you can move on to the next steps. This begins with creating a wish list of attributes you’d like to see in your new home and setting your budget accordingly.

Once you have an idea in mind, you can contact your lender or mortgage broker to get a pre-approval before looking at homes or placing offers. 

An educated first-time buyer is a confident buyer. The resources below can give you some background:

Avoid Outdated Strategies

Many years ago, it was common wisdom always to try to negotiate for better terms during the offer phase. If you played your cards right, you might save a few thousand dollars off the original listing price. Sellers’ strategies have changed drastically since then. 

Personally, I don’t care for the practice of setting the price below market value in the hopes of generating multiple offers and bidding. That said, it has been a common tactic well before the pandemic set the Mississauga real estate market on fire. 

If a seller sets the price intentionally low and you offer an even lower amount, your chances of securing the house are almost non-existent. This is just one small way that the real estate market has changed over the years.

Understand Today’s Market

You likely don’t want to be the one to tell your relative that their information is out of date, but you also don’t want to miss out on an ideal home because they encouraged you to hold out for a better home or negotiate a lower price. How can you bring your well-intentioned family members up to speed without hurting their feelings? 

The best way for them to understand the new reality is to have them experience it for themselves. You can do this by having them accompany you on all showings, not just the final contenders. After dozens of viewings, you can sit down together and analyze how much each house was listed for and what the final selling price was. Involving your relatives from the beginning will help everyone be realistic and proactive, with effective home-buying strategies that work in the current landscape.

Do you want more guidance to ensure you’re ready to buy your first home? I am here to help you every step of the way. Reach out to damir@damirstrk.com or call 416-884-7925 with any questions you may have.