The past few years have been crazy in the world of real estate. Now that we’re approaching the spring market of 2023, and everything is back to normal since the COVID-19 pandemic, you will notice a slight change in market conditions. If you’re looking to buy a home in 2023, use this as your guide in terms of what to look out for as you embark on your adventure of becoming a new homeowner.
Know that interest rates are increasing.
We all know that interest rates spiked before 2022 ended. That means it’s more important than ever to work with a professional mortgage broker to get the best pre-approval deals for lower interest rates as you secure a mortgage for your property purchase. Why pay more money when you don’t have to?! A mortgage broker can help you get the best rates and options which the banks just can’t offer you.
And, before signing that dotted line to finalize your mortgage be sure that you have done your research – interest rates are rising, and so are the prices of EVERYTHING else in the world. Even though you are approved for a mortgage of $800,000 make sure you can afford those payments while also living comfortably. 2023 is not the year you want to find out what it feels like to be a mortgage broker.
Realize that buyers have more time for negotiating.
You don’t currently have to worry about spending absolutely every dollar you have or stressing about the fact that you have to skip getting that home inspection. You have time to negotiate your offer now that the market has shifted from a seller’s market to a buyer’s market. With fewer buyers looking to break out their wallets homeowners are much more likely to negotiate on terms, dollars, inclusions, and timelines.
Explore government initiatives for home buyers.
There are many government grants that you can apply for, especially if you are a first-time home buyer in 2023. A couple of them include:
- The Affordable Homeownership Program (AHP). This program is only available in Simcoe County. It aims to assist low-to-moderate income renter households in purchasing an affordable home by providing 10% down payment assistance (to a maximum of $50,000) in the form of a 20-year forgivable loan. The AHP provides rental households with the opportunity to move up into homeownership, which frees up rental units, encourages developers to build affordable homes, and increases demand for housing. A percentage of available funding is designated for applicants currently living in Social Housing or those who self-identify as Aboriginal households.
- The First-Time Home Buyers Incentive. This program is for any first-time home buyer in Canada purchasing a home valued at no more than $480,000. It’s for people with a household income of $120,000 or less; it will help them break into the housing market, reduce their monthly mortgage payments, and boost the new construction of affordable homes as the demand increases.
- The Home Buyers’ Plan. Through this program, you can withdraw up to $35,000 from your registered retirement savings plan (RRSP). Couples can withdraw up to $70,000. The money must be repaid annually over 15 years, otherwise, it’s taxed as income. To qualify, you must be a first-time home buyer and the owner of an RRSP account. This program is unique in that you can use the money to buy a home for someone with a disability. However, you must live in the house for over a year and must be a resident of Canada.
- The Land-Transfer Tax Rebate. The land-transfer tax paid on the first $368,000 of qualifying homes may be eligible for a rebate of up to $4,000 for first-time home buyers. To claim the refund, you must be a legal adult who has never owned a home or had an interest in a home.
For more information on these programs click HERE and know that you can always send me a message, email, or call me with your questions on how to apply.
Check out these Barrie real estate stats:
According to The Barrie & District Association of REALTORS® (MLS®), home sales remain below average as of November 2022 but show signs of stabilizing into the new year. Home sales were 24.8% below the five-year average and 23.5% below the 10-year average for November. The average price of homes sold in November 2022 was $814,838 in the Barrie area; a large decline of 11.1% from November 2021.
We can use this data to predict a trend in the real estate market. Luc Woolsey, President of the Barrie & District Association of REALTORS®, says: “There may still be some trepidation among buyers waiting to come back into the market as we continue adjusting to a highest interest rate environment, but sellers have proven they are not shying away from listing their homes through MLS®.”
Follow these tips while house hunting:
- Learn all about different mortgage options. Variable vs fixed-rate mortgages, private mortgages, and conventional mortgages are all viable mortgage options to look at when buying a home. Develop a plan to help you decide which one makes more sense for your finances and your long-term goals when it comes to your home.
- Work with a reputable real estate agent and an experienced mortgage agent. Buying or selling a home involves a lot of teamwork. Work with a real estate agent who will access their team to find you the best home within your chosen neighbourhood and budget. A good real estate agent might even have an inside scoop for you knowing what will soon be hitting the market before that for sale sign even goes up.
- Budget, budget, and more budgeting! Buying a home is expensive, so pay off any outstanding bills and save up for at least a 20% down payment on a home before you make your offer.
My last bit of advice is — Get pre-approved for a mortgage! A trusted, reputable, mortgage broker, like myself, Darren Robinson, can help you secure the lowest mortgage rate and get you pre-approved for a mortgage swiftly so you will be ready to jump in with both feet as soon as the spring market kicks off. Give me a call at 705-315-0516, or click here to book a free consultation with me on my website, and let’s talk about what we need to do to get you ready to buy your next home or cottage.