How We Bought Our First Home (and What You Should Know)

Buying a house for the first time can feel like stepping into a maze without a map. Whether you're purchasing through a private sale or working with a real estate agent, here's what I learned from buying my first home on Prince Edward Island — including the exact steps we followed, and some lessons I really wish someone had told me.

Step 1: Get a Real Estate Agent (Seriously)

Even if you're considering a private purchase, my first piece of advice is this: talk to a real estate agent. Ours was someone who had helped other family members, so we knew we could trust him. Agents usually work on commission, so they're motivated to help you buy — and more importantly, to guide you through every step. They'll ask what kind of house you're looking for, take down your info, and set you up in a system that alerts them when a matching property hits the market.

Step 2: Get Pre-Approved for a Mortgage

Before you start seriously house hunting, you’ll need a mortgage pre-approval. You can go through your bank or, better yet, a private mortgage broker. We were referred to Tyler MacLellan at Advisory X, and after asking around, we trusted him and his team to walk us through it all.

Mortgage brokers shop around for the best rates and do the heavy lifting for you. We ended up pre-approved through First National LP at 4.69% — better than anything our bank could offer at the time. Tyler was super helpful, explaining every step and making us feel confident as first-time buyers.

Step 3: Know Your Budget

Once you’re pre-approved, you’ll know what you can afford. We were approved for $415,000, on the condition that we declare common law status when moving in, to be counted as a household income. This protects both people in the event of a breakup since we are just dating and not married — like a prenup, but for mortgages.

Your real estate agent will use your pre-approval amount to filter properties within your budget and preferences.

Bonus: How We Saved for Our Down Payment

We had to come up with $15,400 each — not exactly pocket change. We made it happen by cutting back on extras, setting up automatic savings transfers, and getting a little ruthless with our budgeting. It wasn’t always fun, but having a deadline and a clear goal helped keep us focused.

I'll be writing a full post soon that breaks down exactly how we did it — stay tuned if you're trying to save for your first place too!

Step 4: House Hunting (and Why We Ditched the "Starter Home" Idea)

Now comes the fun part — sort of. A lot of people will tell you to look for a "starter home," but honestly, the idea of a starter home has changed. On PEI, even a modest 3-bed, 1-bath bungalow can cost $400k now, compared to $150k back in our parents’ day.

We toured homes with Corey, our close friend, and found that most of what we saw was overpriced, needed a ton of work, or just wasn’t going to suit us long-term. We didn’t want to grow out of our house in a few years — we wanted to grow into it.

Step 5: How We Found Our Home (By Accident)

Eventually, Rachel’s dad got a call from a client who wanted help painting a home he was planning to sell. He preferred to sell privately to someone he could trust — and that led us to our future home.

It checked every box: 4 bedrooms, 3 bathrooms, 3,000 sq ft, 3 acres on the water, and space to grow into. It was well over our budget at $440,000, but with Tyler’s help, we found a way to make it work.

Step 6: Making an Offer and Getting Legal Help

Once you’ve agreed on a price, it’s time to get lawyers involved. If you’re working with an agent, they’ll guide this part. Otherwise, you’ll need to find a lawyer and sign an official offer of purchase. You’ll also need to submit a deposit — usually $1,000–$5,000 — to show you're serious. If something falls through (bad inspection, financing issues), you usually get it back.

At this stage, your closing date will also be set — the day the house officially becomes yours.

Step 7: Book a Home Inspection (Seriously, Do It)

You’ll want to arrange a home inspection before finalizing anything. It’s your responsibility to pay for it, but it’s well worth the cost. Inspectors will point out things you missed during walk-throughs, like old water heaters, leaky taps, or a weak roof.

In our case, the house was unfinished (just three years old), and the inspector helped us add conditions to our offer, like holding $5,000 until certain work was completed. That saved us a lot of stress — and potentially a lot of money.

Step 8: Final Mortgage Approval

Just because you’re pre-approved doesn’t mean you’re fully approved. Once your offer is accepted and inspection is done, go back to your mortgage broker or bank and finalize your loan. Lenders may reassess the property and decide it’s not worth the loan, so don’t wait on this step.

Step 9: Your Down Payment & Hidden Costs

In Canada, first-time buyers only need 5% down. But in reality, lenders often want 7% to cover legal fees, insurance, and other closing costs. For our $440k home, that meant $30,800 total — $15,400 each between Rachel and me.

If you can put down 20%, you can avoid paying mortgage insurance altogether. Otherwise...

Step 10: Mortgage Insurance vs. Life Insurance

If you don’t hit the 20% down mark, your lender will require mortgage insurance. This protects them, not you — if you default, they’re covered. But there’s another option: term life insurance.

We opted for term life insurance instead. If something happened to one of us, the policy would pay off the mortgage. But if not — and fingers crossed it doesn’t — we get the payout back at the end of the term. It’s a financial safety net and a potential bonus down the road.

Final Thoughts

Buying a home in Canada as a first-time buyer isn’t easy — especially with the current market. But with the right support system (and a good broker), it is possible. I hope this post helps you feel more confident and a little less overwhelmed as you take your first steps toward homeownership.

Got questions? Drop them in the comments — I’m happy to share more of what I learned.

Cheers for reading!

~ Alex