Purchasing a home can be challenging for even the most experienced investor. For first time home buyers, navigating the Alberta residential real estate market can raise even more questions. As lenders become more conservative and the market becomes increasingly competitive, there are a few things purchasers should know before buying their first home.
Many new home buyers are getting loans or gifts from family for a down payment. This money can be put in an RRSP pending the purchase of a home. While an RRSP is often considered a nest egg for retirement, first time home buyers can borrow from this account for their first home. People choosing this option must wait 90 days after depositing the money in an RRSP before buying a home in order to claim the tax benefit. Those who are earlier in their careers may also want to delay claiming this tax benefit until a year where they are in a higher income bracket.
In order to safely and securely manage a deposit on a home, home buyers should submit it to their residential real estate lawyer to hold in trust rather than the seller's Realtor. This insures the buyer against funds being held if the seller backs out from the transaction. Those who are interested in another Alberta property may miss out if their down payment is being held by a real estate agent after a deal that did not work out.
There are many things first-time home buyers in Alberta should be aware of, including how best to handle taxation issues and how to avoid fraud or real estate disputes. Those purchasing residential real estate can benefit from the council of an experienced lawyer. A lawyer can help with a variety of steps including holding funds in trust, notarizing documents and helping answer questions related to the purchase of a home.
Source: bnn.ca, "Tips for first-time homebuyers", Pattie Lovett-Reid, Sept. 15, 2017