The spring real estate season is just around the corner and clients may already be asking your advice about financing. Whether a fixer-upper or a new build, cost is the biggest consideration among Canadians looking to buy a home, says TD Canada Trust releases 2011 Home Buyers Report.

This may be obvious to most advisors, but what is not is whether their clients understand the costs of the upgrades and are realistic in deciding on the price range for a home. If your client buys a money-pit, their net worth could take a massive hit.

“If you are willing to do the renovations or upgrades, buying a home that needs some work can give you the ability to transform the space into your dream home,” says Farhaneh Haque, regional manager, mobile mortgage specialists, TD Canada Trust. “However, if you decide to go the renovation route, it’s important to understand the costs of the upgrades you intend to make and factor those in when deciding on the price range for a home that is realistic for you.”

The study found men and women were divided on the topic of buying a home in need of renovation: men are more likely than women to prefer a fixer-upper because it is more affordable (14% versus 8%) and because they can renovate to their taste (37% versus 29%).

Half of Canadians would prefer a new home because they believe everything will work perfectly (25%) and it hasn’t been lived in before (24%), while the other half prefer older homes, which they feel offer better quality (34%) or have more character (17%).

Whether new or old, Canadians say the most important consideration when buying a home is cost (97%) followed by features of the home (94%), size (93%), security and safety (92%) and location (91%).

“When house-hunting there are some factors, like the features of the home, which can be adjusted once you’ve made your purchase,” says Haque. “Other factors, like the location, cannot be changed; finding the right home is about getting the right balance, at a price you can afford.”

Haque says a home is a major purchase and people need to be comfortable that they are making the right decision – both with the home they buy and the mortgage option they select.

She offers Canadian house-hunters following steps to consider before they start looking at homes:

Know the process: From pre-approval to signing final paperwork, there are a number of steps involved with getting a mortgage. Homebuyers must make sure they understand each of these steps before they start looking for a house. House-hunting can be unpredictable, but getting a mortgage should not be.

Learn about your options: When shopping for homes, look for places that will suit individual needs and lifestyle. The same consideration applies to mortgage selection. Buyers must understand the differences between fixed and variable rate mortgages, the pros and cons of a shorter or longer amortization period, etc. Payment flexibility is also important when deciding on a mortgage, to know what you can prepay as well as options to pay less at a later date if something unexpected comes up. By understanding the options, you can make an informed decision about what mortgage is best for you.

Calculate your mortgage numbers: Before you start looking, run the numbers and settle on a price range that you can afford. There are convenient online mortgage calculators that can help you know what you can afford.

Get pre-approved: The home-buying process can happen very quickly and it may be important to move fast when you find a home that you want. Getting pre-approved for a mortgage before you start shopping puts you in a good position to make an offer when you find the right home. There is no cost or obligation to get pre-approved for a mortgage and it is a good opportunity to come in and talk to a mortgage expert to clarify any questions you may have.