26 Must Ask Questions for First-Time Home Buyers

First-Time Home Buyer Guide: Avoid Costly Mistakes and Get All Your Questions Answered

Owning a home may be your dream, but in order for the purchase to be the happy and satisfying experience it was meant to be, especially for a first-time home buyer, you need to ensure that you are financially and mentally prepared for the responsibilities that come with it.

11 Questions to Ask When Hiring a REALTOR
10 Questions to Ask About the Cost of Buying Your First Home
5 Questions to Ask When Searching for a Home

Questions to Ask When Hiring a REALTOR®

Hiring a Calgary REALTOR.

1. How do REALTOR® fees work? How much do you get paid?

It's crucial to discuss fees upfront with your REALTOR® so there are no surprises. Some REALTORS® may offer full-service packages, while others provide more limited services at different price points. Make sure to have a clear conversation about what’s included in the fee structure.

2. Is real estate your full time or part time job?

Ideally, your REALTOR® should be a full-time professional. Just like any other expert, you want someone fully immersed in their field. Full-time REALTORS® are actively involved in the market, seeing more properties, staying on top of trends, and having the availability to support you when you need them most. A full-time commitment means they have the experience and market knowledge necessary to guide you confidently through the buying or selling process. Make sure your agent is dedicated and fully invested in real estate.

3. Are you a licensed REALTOR?

Working with a licensed REALTOR® ensures you're dealing with a qualified professional who has completed the necessary education, passed background checks, and meets ongoing requirements. REALTORS® are also held to a high standard by regulatory bodies that enforce specific rules to protect clients. It’s crucial to verify that your agent holds a current license. You can easily do this by checking your province’s real estate governing body’s website, where you can confirm the REALTOR®’s credentials and ensure they are in good standing.

4. What additional professional designations do you have?

In addition to holding a real estate license, many REALTORS® pursue advanced certifications to increase their expertise. For example, if you're buying or selling a condo, it’s ideal to work with a REALTOR® who holds a Certified Condominium Specialist (CCS) designation. Additional designations demonstrate a commitment to professional growth and client service.

Some valuable designations include:

Accredited Buyer's Representative (ABR)
Seller Representative Specialist (SRS)
Certified Condominium Specialist (CCS)
Seniors Real Estate Specialist (SRES)
Canadian Employee Relocation Council (CERC)

5. Do you work independently or as part of a real estate team?

Knowing whether your REALTOR® works independently or with a team is important. A team setup, which often includes support staff like assistants or additional REALTORS®, can be a great asset. The advantage of working with a team is that you benefit from multiple professionals handling different aspects of your home buying or selling process, ensuring no detail is overlooked and providing more consistent support when you need it most.

6. How much of your business is repeat or referral business?

This question will help you determine how many of the REALTOR'S clients enjoyed their experience enough to recommend them to someone and use them again. According to a 2023 National Association of Realtors (NAR) study, 39% of homebuyers were referred by a friend, neighbor, or relative. You can also ask for references from previous clients so that you can check how others felt about using that Realtor.

7. Do you offer a Buyer Consultation to explain the home buying process?

If you’re a first-time homebuyer, the process can feel overwhelming. Before jumping into viewings, ask your REALTOR® if they offer a Buyer Consultation. This meeting is crucial for discussing important topics like costs, finding the right home, writing a purchase contract, and conditions such as home inspections.

In today’s world, this can even be done over Zoom for convenience. A recent Real Estate Council of Ontario (RECO) survey found that 32% of first-time buyers felt unprepared, making this consultation even more valuable. Your REALTOR® is there to guide and educate you.

8. Do I need to be pre-approved or pre-qualified for a mortgage before looking at homes?

Being pre-qualified for a mortgage is the step before being pre-approved.

Pre-qualified Simply means that based on general information you provide a bank or mortgage broker, like annual income, credit and debt, they will suggest the amount of the mortgage you can afford.
Pre-approved. You want to be pre-approved before looking for a home. Pre-approved is a guarantee in writing by a lender to grant you a loan up to a specified amount (subject to receiving full documentation). A pre-approved mortgage is not a guarantee of being approved for the mortgage loan. With a pre-approval you will know exactly what you can afford when looking for a home, and when you find the right home you will be one step closer. Sellers will find any offer you make more attractive if you are pre-approved for a mortgage. In addition, having a pre-approved mortgage will allow you to take advantage of the best interest rates.

9. How will you help me find a home to purchase?

Your REALTOR® will ask the right questions to help you determine your true wants and needs in a home. Do you really need four bedrooms, or would three and a den work better for your family? What about parking—do you need space for multiple cars or specific features like a garage? Consider if your home should accommodate future life stages or multi-generational living. Proximity to public transportation, schools, and whether you prefer a new or previously-owned home are all important factors to discuss as well.

How much space do I need? This includes questions about the number of bedrooms, bathrooms, and overall square footage.
What is my budget? Understanding the total cost, including potential renovations or upgrades, is essential.
Which neighbourhood suits my lifestyle? Consider proximity to work, schools, and amenities.
Do I need a move-in-ready home or am I open to renovations?
What are my must-have features? Think about essentials like a backyard, garage, or home office space.

10. How many homes do you sell each year?

Asking how many homes your REALTOR® sells annually gives you insight into their experience and success. It’s not just about numbers; it's about understanding how active they are in the market and their ability to navigate various situations. For example, a REALTOR® who consistently sells homes year over year demonstrates market knowledge and client trust. Don’t be afraid to ask for specifics—it’s a great way to ensure they have the expertise to meet your home-buying or selling needs.

11. What haven’t I asked that I need to know?

Sometimes there are questions that you don’t know to ask, because well… you just don’t know. This is a great question that allows your REALTOR® to cover any topics that they feel are important for you to know.

Cost of Buying Your First Home Questions

First-time home buyer costs.

12. What will the Down Payment be?

The down payment is the portion of the home's price that you pay upfront from your own savings, and it’s not covered by the mortgage. In Canada, if you’re buying with a mortgage loan insured by CMHC, you can purchase a home with a minimum down payment of 5%. For a conventional mortgage, which doesn’t require mortgage insurance, you’ll need at least 20% down. Your down payment size can also impact your mortgage terms and monthly payments, so it’s an important consideration.

13. How much is the deposit?

The deposit is paid when you make an Offer to Purchase to show that you are a serious buyer. The deposit will form part of your down payment with the remainder owing at time of closing. If for some reason you back out of the deal without having covered yourself with purchase conditions, such as financing, home inspection, etc., your deposit may not be refundable and you may be sued for damages. The size of the deposit will vary depending on the price of the home and market conditions.

Typically, the deposit in Calgary ranges from 3% to 5% of the home's purchase price, though this will vary depending on the property and market conditions.

14. What is Home Loan Insurance?

To purchase a home you must have a minimum 5% down payment. If your down payment is under 20% it is considered a high ratio mortgage and you must account for home loan insurance, provided by the Canadian Mortgage and Housing Company (CMHC) or Genworth Financial.

Insurance fees typically range from 1-3% of the mortgage principal and depend on the borrowing amount and percentage of down payment. Insurance fees can be added to the principal of your mortgage and paid monthly or paid upon closing.

15. What are the Legal Fees?

When you buy a home, you need a lawyer to complete a title search, ensure all the documentation has been accurately completed, register your mortgage and register you as the new owner of the property. Legal fees The amount of these costs will vary, depending on where you live and what kind of home you’re buying.

16. What is the Appraisal Fee?

Your mortgage lender may ask you to pay for a recognized appraisal in order to complete a mortgage loan. An appraisal is an estimate of the value of the home. Appraisal fees vary.

17. What is the Property Inspection Fee?

A home inspection a condition is typically a condition on your Offer to Purchase. A home inspection is done by a qualified home inspector to provide you with information on the condition of the home. The Property Inspection fee will range (approx. $500-$800).

18. What is the cost of Title Insurance?

Your lender or lawyer may suggest that you get title insurance. This will cover loss caused by defects of title to the property. Title Insurance fees varies with properties and price range.

19. What about Prepaid Property Taxes?

Property taxes are charged by the municipality where the home is located. They are based on the value of the home. The seller may have already paid property tax or other expenses that apply to the time after the house passes into your hands. You will need to pay the seller back.

20. What is the cost of Property Insurance?

The mortgage lender requires you to have property insurance because your home is security for the mortgage. Property insurance covers the cost of replacing your home and its contents in case of loss. Property insurance must be in place on closing day.

21. What are other costs to consider when buying a home?

Beyond the down payment and mortgage, purchasing a home comes with additional expenses you’ll need to budget for. Moving costs, any immediate renovations or repairs, and monthly condominium fees (if you're buying a condo) are common considerations. You'll also have to account for setting up utilities like electricity, gas, water, internet, and cable. Don’t forget about one-time costs such as legal fees, home insurance, and property taxes, as well as a potential land transfer tax. Planning ahead for these extra costs ensures a smoother transition into your new home.

Questions to Ask When Searching for a Home

22. Should I think about resale before I purchase my first home?

It’s so exciting buying your first home, sometimes you don’t think of where you will be a few years down the road. The average first-time home buyer only stays in a home for four years, so if you purchase a home that is very specific and not appealing to a general audience it may be hard to sell later on.

23. How should I search for my new home?

While online listings and open houses are a great way to begin your home search, relying solely on these methods may limit your options. When you work with a REALTOR®, you gain access to property information and insights that aren't always visible to the public. A REALTOR® can guide you through the entire process, helping you avoid missing out on homes that meet your needs and ensuring you're well-informed about market trends, potential issues, and the best opportunities. This expertise can make your home search more efficient and successful.

24. What do I want in a neighbourhood?

Start by making a list of all the amenities and features that are important to you. Do you need easy access to public transportation? Are nearby schools, parks, or recreational facilities a priority? Consider whether you prefer a vibrant urban area with restaurants and nightlife, or if a quieter, family-friendly suburban community is more your style. Thinking about these factors will help you narrow down the best neighbourhood for your lifestyle.

10 Questions to Ask Yourself About a Neighbourhood:

How important is proximity to public transportation?
Do I want to be close to schools, daycare, or family-oriented services?
Are nearby shopping centers or grocery stores important to me?
Do I need easy access to parks, gyms, or other recreational facilities?
What is the community vibe—do I prefer a lively urban setting or a quieter suburban feel?
How close do I need to be to my workplace or major roads for commuting?
What is the walkability or bikeability of the neighbourhood?
Is the area growing, and does it have potential for future development?
Do I want a neighbourhood with a strong sense of community or more privacy?
Are safety and low crime rates a top priority for me in choosing a neighbourhood?

Answering these questions will help you pinpoint the neighbourhood that best suits your needs and lifestyle.

25. Should I consider schools before buying?

If you have children or plan to, researching schools in the neighbourhood should be a top priority. Before committing to a home, reach out to the designated schools in the area to check if they have space for your children and whether their programs meet your needs. Consider how far the school is from your potential home—will your kids be able to walk, or will they need to take the bus? Proximity to good schools can also influence your home’s future resale value, so it's worth taking the time to ensure the schools align with your family's needs and plans.

26. As a first-time home buyer, how can I make the buying process easier?

The home buying process will be easier if you can narrow down the type of home you want to see. Remember you are not looking for the perfect home. If you are always looking for the perfect home, the process will be frustrating. The best rule of thumb is to satisfy 85% of what you are looking for. Which means what 15% can you live without?

CONCLUSION

As a first-time homebuyer, asking the right questions is key to avoiding costly mistakes and feeling confident in your decisions. At the Marnie Campbell Real Estate Team, we’re here to guide you every step of the way, making sure you feel informed and empowered throughout the home buying process. Our goal is to help you find a home that fits your needs without the stress or regrets. With our experience and support, you can be sure that your first home purchase will be a positive and rewarding experience.

Your Complete Guide to Buying, Selling, and Relocating in Calgary

Find a Realtor in Calgary to buy or sell a home. Contact Marnie Campbell Real Estate Team.

The Marnie Campbell Real Estate Team can help you avoid costly mistakes, so you have no regrets buying or selling a Calgary home.

Posted by Marnie Campbell on March 12th, 2024

26 Must Ask Questions for First-Time Home Buyers (2024)