Buying a house should be an exciting time! Finding your home usually means the realization of a dream at least a few years in the making.
First-time buyers in particular, though, sometimes find themselves overwhelmed with the process involved in finding, financing, and taking possession of a property. Instead of enjoying the experience, they lose sleep and spend as much time worrying and stressing as they do shopping.
We would like to help by breaking down the process, step-by-step, so that you can know what to expect, and do as much of the preliminary work ahead of time so that you can focus on finding the right home for your needs.
First things first:
Evaluate your situation.
If you own, will you be selling first?
Where do you want to live?
Is this meant to be a ‘forever’ home, or is this a starter that you plan to sell in a few years? (Statistics say that the average Canadian family moves every 3-5 years!)
Do you want a house that is fully move-in ready, or would you prefer to have room to renovate to your taste? (Remember, a “fixer-upper” isn’t always the best deal.)
Figure out how much you can afford.
This is something that must be done before you even consider going out shopping for a home. Lenders use formulas along with your credit history, income statements, and savings to determine how much you qualify for – and what interest rate you will pay.
Get your financing in place.
This single step will save you more headaches than you can even imagine, especially in a super heated market. When placing an offer (especially in multiple offer situations), sellers want to know that the buyer whose offer they select will be able to afford to follow through. You will almost certainly be eliminated from the pool of potential buyers for your dream home if you cannot prove that you are fully approved for the mortgage you will require.
If you have a good relationship with your bank, and think you would like to keep your mortgage business there, speak to them first. Afterward, if you would like to compare available mortgage products, an experienced mortgage broker can often find loans that are available with features that could be important to you, such as low penalties (if you think you may not hold the mortgage for its full term), or extra insurances.
One of the major advantages to you in getting pre-approved is that you can lock in the lowest interest rate available while you shop around. If the rates go up after you get your approval, it doesn’t affect YOUR rate, but if the rates drop, your financing will be adjusted to reflect a lower interest rate. You really can’t lose here!
[We are always happy to provide names of financing professionals who have a proven track record with our clients.]
Make a must-have/wish list.
This is not as “hokey” as it may sound.
To state the obvious, buying a house is a huge decision. It is crucial that you know what your absolute must-have items are, and what you are willing to compromise on.
Do you need three bedrooms? Two bathrooms? A finished basement? A garage? Space for a home office?
Defining your needs will save you time by eliminating properties that don’t suit your lifestyle.
Start house hunting.
With the help of a qualified Sales Representative, you can be among the first to see hot new listings every day. A search will be set up for you, and you will receive these via email. Once you have selected the properties you wish to tour, your agent will set up the appointments and take you through them. Try to see houses in the daylight, and ask as many questions as you can think of.
Negotiate for the house you want to buy.
The subtleties of negotiation separate the professionals from the rest of the pack. Strategy and skill, along with a knowledge of the industry, combine to create an effective negotiation process.
“Money is an emotional issue and representing your own financial interests is like performing surgery on yourself.”
Once you know how much you are willing to spend and what terms you need to agree upon, your agent will approach the seller’s agent to represent your best interests. Having full knowledge of the legal and ethical issues involved in real estate transactions, an experienced sales representative is in the best position to arrange an acceptable contract that is fair to both the seller and to you as the buyer.
Close the deal.
Did you know that every transaction has up to 100 pages and requires at least 43 signatures? There are 100-150 phone calls to be made and approximately 43 people from 14 different related industries who get involved in your transaction. Sounds a little like a full-time job, right?
While you are preparing to move and carrying on with your regular daily activities, this is something that your agent is happy to take care of.
Closing day and beyond.
In the week prior to your closing date, you will have an appointment to see your lawyer. He will take a cheque to cover your downpayment, the land transfer tax*, his fees, and any adjustments made to utilities and taxes.
The day of closing, they will call you to let you know when you can come pick up your keys….and that is the sign that you finally own your new home! This is the point at which it is perfectly acceptable to do your happy dance – time to enjoy the results of your hard work.
Still have questions? Drop a line here. We will do our best to direct you to the information you need!
*To calculate your Land Transfer Tax click here: