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Are you a first-time homebuyer in Edmonton? Edmonton, Alberta, can be a great place to put down roots and buy a home. But for those who are new to the process, it can be scary. Many of my clients have so many concerns about how the process will work, what it will cost and what the process will look like. Don’t worry – I’ve been through it thousands of times! Here I’ll walk you through everything you need to know as a first-time homebuyer in Edmonton. And if you do decide to buy, I hope you’ll reach out with more support and advice.
Why Buy a House in Edmonton
Well, I love Edmonton, I’ve lived here my whole life. It has a beautiful river valley, great schools and neighborhoods, and an awesome community. Edmonton is also one the most affordable cities in Canada for housing. According to March 2024 statistics from the Realtors Association of Edmonton, the average price of a home in Edmonton is $407,458, with detached homes averaging $508,411 and semi-detached units averaging $385,163. It is still possible to buy a townhouse in Edmonton for less than $300,000 and condominium average prices sit at $181,347. Edmonton’s residential neighborhoods are also beautiful, diverse and offer a range of amenities.
If you already live in Edmonton, well, you’re probably already an insider. If you are considering moving to Edmonton, definitely learn more about what the city has to offer.
Benefits and Incentives for First-Time Buyers in Edmonton
If you’re looking to buy your first home, money is likely a factor. Fortunately, there are some programs in place to help first-time homebuyers buy a property in Edmonton.
First-Time Home Buyer’s Tax Credit (HBTC)
If you’re a first-time homebuyer, you may be eligible to receive a non-refundable tax credit of up to $1,500 under HBTC.
This is nice and all, but it won’t be changing anyone’s bottom line by more than a few hundred bucks. Remember a deduction is worth your tax rate times the amount. To put that in perspective, it might cover about half your lawyer fees. Is it worth applying for? Sure. But it’s a make-or-break program when it comes to buying a home.
GST/HST New Housing Rebates
You may be eligible for a rebate for some of the tax you pay when buying your home. But … this one is complicated, because GST is complicated. From my experience, this rebate is almost always assigned back to the builder, so you’re not going to claim it on most new home purchases. And this is for new homes only, so it won’t apply if you’re buying anything but a brand-new build.
The Home Buyers’ Plan (HBP)
The Home Buyer’s Plan allows first-time homebuyers to withdraw up to $35,000 from a registered retirement savings plan (RRSP) tax-free to buy your first home.
This is a program I see people use all the time. A lot of first-time buyers have RRSPs and this can be a way to get a down payment for a house together more quickly. There is a tax advantage to doing it this way, but there are still financial consequences.
Besides the fact that your RRSPs are diminished by up to $35,000, you’ll also have to pay this back within 15 years or that tax advantage goes “poof.” Fifteen years is a long time, but remember that you’ll be paying your mortgage now too, along with all the other costs associated with homeownership,so it might not be as easy to save that up as it once was. There will be a schedule that shows how much you have to return to that RRSP and when. There’s a lot to think about with this option, so read over everything before you decide to do this.
And one more thing: You can’t just dump your down payment into your RRSP and then buy a house and keep your tax benefit. That money has to have been in your RRSP account for at least 90 days before you can claim this perk.
The First-Time Home Buyer Incentive
This incentive provided a 5% or 10% of your home’s purchase price for a down payment – but it was cancelled just a week before I wrote this article. No huge loss to my mind. It was a terribly complicated and messy idea and I doubt almost anyone took advantage of it.
But if you feel like it, you can click the link above to read about a bizarre idea the government had at one point to get people into their own houses. Commendable goal, silly execution.
The First Home Savings Account (FHSA)
With the first-time home savings account, first-time homebuyers in Edmonton may be eligible to save up to $40,000 tax-free to buy a home with an annual contribution limit of $8,000. These are bank account designations that allow someone to save money for their first home but contributions are tax-deductible and withdrawals are not taxable. Your provincial or territorial government may also offer other home buying programs and incentives. You can contact your provincial or territorial government to learn more about their programs.
This is not something I have had any clients mention they’ve been using, but it is rather new and maybe no one has had time to take advantage of it. As a concept, I think this is a good idea and you may as well use it. If you can earmark some funds for a home purchase, this is where you should put that money. You will be able to deduct it from your taxes, which is like an RRSP, but then when you withdraw it, it acts like a TFSA and there is no tax on the way out.
This is the opposite of withdrawing from an RRSP, in which case your money may be taxed on the way out (if you don’t pay it back.) Your contribution limit will be $8000 per year up to $40,000 over your lifetime. This might not be enough for a down payment in the future, but right now that is a lot of money to save up with tax benefits. This is something parents might want to contribute to for their kids as well.
City of Edmonton First Place Program
The City of Edmonton has a program for first time home-buyers for townhouse sites built on surplus land around schools. At time of writing, there were 20 school sites around Edmonton that were designated for this program, but a lot of them have been completed already. There are two sites currently available at the time of writing with two more potential sites to come. There is an income limit to qualify for the program, but it could provide homeownership opportunities for some.
How to Buy a House in Edmonton, Step-by-Step
OK, so now you know some of the programs that can (possibly, if you qualify) help you realize your goal of becoming a homeowner in Edmonton. Now what? Actually, people tend to be pretty anxious about this process, so I often end up going through it step by step before they even start shopping for a home.
Step 1: Choose a Realtor
The first thing I would recommend when house shopping is either choosing an agent or choosing a mortgage broker. The order is not so important as they will almost be at the same time. Choosing a real estate agent is very easy. It would be almost unheard of for one to reject you! (We know what rejection feels like, so we take on anyone!)
But seriously. Just pick me. That’s the easiest. You’re already here. Just kidding. Actually, I think I’m serious. Anyway, choose an agent who you think fits your needs. You can work with any agent in your area. It might be helpful to ask a friend or colleague who they have used and whether the experience was a good one. You can also check reviews online, of course. (You can see what my clients say about me here.) All agents are different, with different experiences and styles, helping ensure you’ll find one you feel you can trust. Or, you can read my post on how to find the best Edmonton realtor.
Step 2: Get Pre-Qualified or Pre-Approved for a Mortgage
I can’t tell you how many people start shopping for a home before they know what they can afford. The problem is, they are often wrong about that, which can leave them pretty disappointed if they have been viewing homes that end up being way out of their price range.
If you are serious about buying a home, you should get a mortgage broker right away. This is because you do not know what kind of mortgage you can have and for how much you will be approved for. Almost all home buyers need a mortgage and unless you have hundreds of thousands of dollars kicking around, you will need one as well.
As an agent, I don’t recommend that buyers visit a bank to get a mortgage. This is because banks do not have your interests in mind. They have no legal obligation to protect you from making poor financial choices. You are free to talk to the bank first or just go in and ask for a mortgage, but I cannot recommend it. A mortgage broker will make sure you know what you can and cannot do and they will be required to get you the best deal possible for your circumstances.
Step 3: Decide What You Can Afford
After a mortgage broker tells you how much you’re allowed to borrow, you have to decide how much you actually want to spend. The mortgage broker will tell you the maximum amount of money they can lend you, but you might not want to spend that much. I think it’s wise to keep this amount lower than the max. It just gives you more wiggle room if your financial situation changes.
That being said, sometimes adding a little to your budget will make a big difference in what’s available to you. There are price points where almost everything changes and it might actually be less expensive in the long run to spend more (and mortgage more) than to move sooner or have to renovate to fit your requirements.
The way most house searches go is that you decide on what you can afford before you start touring homes. This way, you know for sure you are looking at houses you can actually buy. This is why it is crucial to talk to a professional before getting a price range in mind. Looking at houses that are out of your budget will just lead to disappointment when you find out what your limits really are.
Step 4: Start Your Search for a Home in Edmonton
Now you can start looking. This is often the most enjoyable part. It is for me too! This is where you find out what you can get for your money, and also where you really find out what you want in a house. If you’re buying with a partner or spouse, this is also where each of you start learning about what’s important to the other in a house and where you might have to compromise. This can be a long process. I have had people find a great property that they buy on day one, and I have had people search for a house for years. I often get asked how long this process will take and, honestly, I can’t answer that. People are complicated and real estate is complicated. You’re probably going to be in the range of looking at a few dozen houses. I’m patient and prepared to search for a while to ensure my clients get the right house.
Step 5: Put in an Offer
Making an offer is just one step towards buying a property. There are all kinds of ways to make an offer and I have seen a lot of things work and a lot of methods fail. I am often quite surprised how sellers and buyers react to each other’s offers and counter-offers. Making an offer means you sign a legal document that describes on what terms you would buy this home. Some of the details you’ll need to decide on with the help of your agent are:
- Offer price
- Possession date
- Conditions needed (the most typical ones are financing and inspection)
- Deposit amount
- Additional terms
There are all sorts of other things you can request or demand of a seller, but these are the big ones. A lot of decisions are based on things like “how much” and “when.” When will you want to own this place? How long will you have to check things out like your financing or inspection or, if you’re buying a condo, reviewing the condominium documents?
Step 6: Negotiate
Negotiations are not easy, but they’re part of the offer process. The first step, though, is to get an idea of the actual value of a property and decide if you’re willing to pay below that price or more than that price. That gives you an endpoint. Then all you have to do is decide on how to go about getting there.
Do you put in a lower offer and go back and forth with counter offers until you arrive there? Or do you just offer your final price up front and skip negotiations altogether? Every situation will dictate a different response.
For more information on negotiations see: How Will Negotiations Go When Buying A House?
Step 6: Satisfy Your Conditions
Conditions are things that need to happen before you actually have a firm deal. For a house or duplex, this is most often an inspection and getting approval on financing. For condos, you might inspect a condo or just review condo documents. It depends on the situation.
Step 7: Secure Financing
If you are paying all cash for a property, you do not need a financing condition, but that is pretty rare these days. Chances are that you will need to borrow some money for this purchase. This is the condition where you send details of your potential purchase to your mortgage broker and they work on approving your mortgage. The broker will work with a lender to secure your financing and keep you informed as to how the request is progressing. If your financing is not approved, your financing condition allows you a way out of your purchase offer.
Step 8: Get an Inspection and/or Review Condo Docs
A home inspection must be done by a licensed home inspector. There are many to choose from, but your agent might suggest a few you could try. I have a list of inspectors I like to work with that provide to homebuyers. A home inspector will check over the entire house from top to bottom and provide you with a report of any issues they found. And I think in most cases, you should get one.
If you are purchasing a condo, you will want to review the documents related to the operation of the condominium building or complex. This is a lot of paperwork to look over and I recommend not just reviewing it yourself with your agent, but also having a condominium documents review company look over the information as well. There is a lot to understand about condominium documents and there are many red flags to look out for. More people checking them out is a good thing.
Step 9: Satisfy Any Additional Conditions
Any number of conditions can be added to a purchase offer, but the more there are, the less likely the offer is to be accepted. Some pretty regular ones are other types of inspections, lawyer review of the contract or requesting and reviewing more documentation about the property. One condition that was more common in the past was a “subject to the sale of buyer’s home” condition. This one is very rare now. Things move too quickly to wait for another house down the line to sell.
Step 10: Get a Lawyer
After you’ve bought a house, you’ll need a lawyer. Your lawyer DOES NOT want to hear from you until you have actually purchased the house. Unless you need specific advice and you are willing to pay for it, do not bother a lawyer before you have removed all conditions. Before you have removed conditions, you have not bought a house!
After you have actually bought your house, you just need to call a lawyer and ask if they’ll take you on. If they do real estate, they will almost always take you on as a client, but you still need to ask. You don’t necessarily need to give them much more than your contact info. Documents will typically be sent by the seller’s brokerage to the lawyers with letters of instruction on what they will need to do.
Step 11: Wait for Your Possession Date
This part is fun. Now you get to wait for your house. Depending on what you and the seller agreed to as a possession date, you could be waiting anywhere from 10 days to months for this house. I don’t usually see my buyers pick a possession date longer than three months, but anything can be agreed upon.
Step 12: Call About Utilities Hookups
While there isn’t much you can do while you wait for your possession day, you can arrange for your utilities to be hooked up. Your home will, after all, be much more comfortable with heat, water and electricity. You can do this any time, but it’s nice to give enough notice to the utility companies for them to arrange things – a week is typically reasonable. Utilities will be hooked up in your name on the possession date. If the seller has them turned off at a different time, you’ll need to know. The utilities should not be turned off in between. This can make for expensive connection charges.
Utilities to call about:
- Power
- Water
- Gas
- Phone
- Internet
Do not call for internet and phone services to be dealt with on possession day. Possession day is a half day (keys are typically delivered around noon) to begin with. And you might get keys late. If you have an appointment to have a technician arrive that day and you aren’t there, it’s not helpful. Wait a few days to deal with internet (and phone service if have a landline).
I know what you’re thinking: How can I live without internet for a few days?! Well, you’ll be busy moving your futon and Grandma’s heirloom doilies into the house, so you’ll have to live in the real world for a bit.
Step 13: Get Home Insurance Insurance
Another thing you can do while waiting for possession day is get home insurance. You need insurance in place before you can own a property. If it’s a condo, you’ll need “contents and improvements” insurance and deductible insurance. If it’s an attached or detached house, you will need all kinds of insurance, especially fire insurance.
This MUST be in place before you can sign paperwork and your lawyer will ask you to bring a “binder letter” with you to prove it.
If you purchased a home with cash, you could technically not get insurance, but this is a terrible idea, so don’t do it. Ever heard of someone whose house burned down and they had to start a GoFundMe campaign because they didn’t have it insured? It happens. It’s bad. Don’t be that person.
Step 14: Sign the Paperwork
At some point before possession, you should get a call from your lawyer to come do the final signing of the paperwork. The lawyer will tell you what to bring, but it will include the down payment, so you’ll need to go to the bank and get a big ol’ money order or bank draft. Bring this with your IDs and your insurance letter to the lawyer.
They’ll explain what you are signing and why, but basically this is what finalizes your ownership. It will take some time to get Alberta Land Titles to register you as the new owner, but you still are the owner, even if you aren’t officially recorded as such yet.
Step 15: Get the Keys
I love possession day. Key time is fun time. Who isn’t excited to get keys to their new home?
That said, when I have a buyer client I always remind them that we don’t always get keys right at noon, which our contracts specify as the time to change things over. The lawyers might not receive funds at the right time, or a lender might not send paperwork early enough or there could be a hangup somewhere. Plus, once your keys are released, your agent will have to go get the keys and they could be anywhere in town. In other words, getting those keys to you can take a while. Once you meet your real estate agent to get them, though, it’s your home and you can do whatever you like.
Step 16: Move in and Enjoy
This is almost the fun part. Actually, I don’t know if you know this, but moving sucks. Hire someone, do it yourself or ask your friends to do it while you make the spaghetti. Whatever you choose, it will be more painful and take longer than you thought.
But, if you’ve chosen the right home, you won’t have to do it again any time soon, and that’s the best part.
