When is the right time to buy your first home? When the conditions are right. Here’s how to determine the best time to buy, based on your lifestyle and the real estate trends in your community.
When might be a good time to stop renting?
When it’s cheaper to buy than to rent comparable homes in your community.
Here’s how to do the math:
Start by finding two similar condos or houses online, one for sale and one for rent.
To determine the difference, divide the home’s asking price by 12 months of rent (using the comparable rental unit’s monthly rent). This number is known in industry parlance as the “rent ratio.”
If the rent ratio is 20 or more, sit tight. Once homeowner expenses like the mortgage, property tax, insurance and maintenance are calculated, it costs more to buy in your area than to rent.
If the rent ratio is 19 or less, start house hunting! More likely than not, you’ll save money while building equity through first-time homeownership.
BONUS: Take this quick and easy quiz to find out if you might be ready for homeownership.
When might be the best month to make an offer?
Winter house hunting has many perks – chief among them is the fact that fewer buyers are out there making offers. Fewer buyers means fewer competing offers. Additionally, winter sellers tend to be highly motivated, making conditions ripe for deals.
TAKEAWAY: Make that offer in January, when buyers are cocooning and motivated sellers are eager to unload their property after December credit card bills have come in, and before the spring real estate season.
When might be the best day of the week to make an offer?
Consider Tuesday, when the sellers are stressing out if their home didn’t garner any offers from weekend showings and open houses.
In particular, the first Tuesday of the month: the sellers will have just made yet another mortgage payment they don’t want to repeat.
UPSHOT: A first-Tuesday-of-the-month offer comes at a time when sellers are more receptive to negotiating.
How to make the most of your timing
Consider working with an experienced team consisting of a REALTOR®, a mortgage professional and a home inspector to boost your odds of getting the best deal at the right time to buy.
Learn about Genworth Canada’s mortgage products to help you get started on the road to homeownership.