7 Essential Tips First-Time Home Buyers Need to Know

Buying your first home is an exciting milestone that you can’t wait to hit; but it can also feel overwhelming, especially if you don’t know where to get started. There are many decisions to make, financial factors to consider, and steps to take before you can confidently purchase and move into your new home. Whether you’re just starting to think about homeownership or are already actively searching for the perfect place, having a strong foundation of knowledge can make the process smoother and less stressful. Here are seven essential tips to help first-time buyers navigate their home purchase with confidence.

Start Saving with a First Home Savings Account (FHSA)

One of the biggest challenges for first-time buyers is saving enough for a down payment. Fortunately, the First Home Savings Account (FHSA) was introduced to help Canadians save for their first home in a tax-advantaged way. This registered savings account allows you to contribute up to $8,000 annually, with a lifetime contribution limit of $40,000. The key benefits of an FHSA include:

• Tax-free growth: Any interest earned in the account is not taxed, which means you have the change to grow your down payment more quickly than in a traditional savings acount.
• Tax-free withdrawals: When you’re ready to buy, you can withdraw funds without paying taxes.
• Opportunity to combine with the home buyers’ plan (HBP): You can also withdraw up to $35,000 from your RRSP under the HBP, allowing you to maximize your savings.
• Automatic Contributions: Setting up automatic transfers can help you stay on track with your savings goals.

If you’re planning to buy your first home, opening an FHSA as early as possible will give your savings more time to grow and put you in a stronger financial position when you’re ready to make a purchase. Click here to learn more about the FHSA and how it can help you reach your down payment goals.

Get Pre-Approved for a Mortgage

Shopping around for the perfect home is the fun part… But before you get there, it’s important to know how much you can afford. A mortgage pre-approval gives you a clear picture of your borrowing power, helping you narrow down your home search and ensuring you’re shopping within your budget. Unlike online mortgage calculators, which provide only rough estimates, a pre-approval is an in-depth assessment of your finances, including your credit score, income, debts, and down payment.

Not only does a pre-approval give you confidence in your price range, but it also makes you a more attractive buyer to sellers, especially in competitive markets!

Understand the True Costs of Homeownership

Owning a home comes with more expenses than just your mortgage payment. Many first-time buyers focus solely on the down payment and monthly mortgage costs but underestimate the additional costs that come with homeownership. Some of the key expenses to plan for include:

• Closing costs: Legal fees, home inspections, land transfer taxes, and title insurance can add up to 1-4% (on average) of the purchase price
• Property taxes: These vary by location and must be factored into your budget
• Home Insurance: Required by lenders and an essential part of protecting your investment
• Utilities and maintenance: Heating, electricity, water & regular upkeep should be budgeted for
• Repairs and unexpected costs: Homeownership means taking responsibility for maintenance – and it’s always important to be prepared for the unexpected!

Before buying, take the time to review your budget realistically and ensure you can handle these expenses without financial strain in the long run.

Think About Your Long-Term Needs

When purchasing your first home, it’s easy to focus on what works for you right now, but it’s just as important to think about your future needs. Think about factors like job stability, potential family growth, and lifestyle changes over the next five to ten years.

Are you planning to start a family soon? Will you need extra space for a home office? Is the commute reasonable if your job situation changes? Buying a home is a major investment, so choosing a property that fits your long-term goals will help you avoid outgrowing it too quickly or having to sell sooner than planned.

Location Matters More Than You Think

You can renovate a home, but you can’t change its location. Choosing the right neighbourhood is just as important as selecting the right house. Things like commute times, access to public transit, nearby amenities, school districts, and community vibes all come into play – and you’ll definitely notice them even more once you get settled.

It’s also important to research planned developments in the area. A neighbourhood might seem quiet now, but if there are plans for high-rise buildings, increased traffic, or commercial expansion, it could change the area over time. Spending time in different neighbourhoods, both during the day and at night, can help you get a better sense of the community before committing to a purchase.

Work with Experienced Professionals

Navigating the home-buying process is so much easier – and way less stressful – when you have the right team by your side. A REALTOR® can help you find properties that match your needs and budget while also guiding you through negotiations and paperwork. A mortgage broker can compare loan options from different lenders to ensure you get the best rate. A home inspector can identify potential issues with a property before you commit to purchasing. And a real estate lawyer will ensure all legal documents are in order.

Working with professionals like these takes the guesswork out of buying a home and helps you make informed decisions every step of the way. If you’re unsure where to start, reaching out to an experienced REALTOR® is a great first move.

Be Prepared for the Offer and Negotiation Process

Once you find the right home, making an offer can be both exciting and nerve-wracking. In competitive markets, multiple offers are common, and understanding how to structure your bid can make a big difference. Having a pre-approved mortgage, a flexible closing date, and a strong deposit can help strengthen your offer.

At the same time, don’t be afraid to negotiate. Your REALTOR® will guide you on when to push for a better price, request repairs, or ask for additional conditions in the contract. If something doesn’t feel right, trust your instincts and be willing to walk away. The right home is worth waiting for, and rushing into a deal without due diligence can lead to regret later.

As we said, buying your first home is a major milestone, and being well-prepared makes all the difference as you navigate this process. But, with the right knowledge and professional help, you’ll be in a strong position to find the right home with confidence.

If you’re ready to take the next step, our team at Coldwell Banker Community Professionals is here to guide you through the process. Contact us today to get started on your journey to homeownership.