WANT TO BUY OR SELL A PROPERTY?
Break Down: Home Buying Process
Let’s be honest — buying a house can feel overwhelming & daunting… even if you’ve done it before!
Here’s a simplified breakdown of the steps involved from start to finish.
Should You Own A Home?
Home ownership is no joke & is definitely not for everyone (and that’s totally O.K.!). There is a lot more to owning your own home beyond saving a downpayment & getting a mortgage. There are monthly expenses, maintenance, saving for future repairs, etc. Here is a readiness checklist we provide our buyers to see if they are ready to take the leap!
Establish What You Can Afford/Mortgage Approval
Once you are serious about buying a home & know that it is the right fit for you, you’ll need to speak with a Mortgage Broker or Specialist to determine what you can afford. Once you know the maximum you can spend, we suggest trying to stay well below that mark — living house poor can take much of the joy out of owning a home & won’t leave you much in the budget to set aside for renovations or an emergency fund.
Why is this step so vital this early in the process?
- Gives you a chance to understand the different types of mortgages & shop around for the best interest rate
- Helps you avoid falling in love with a home you can’t afford or building unrealistic expectations
- Lets a REALTOR® known you are serious & capable of buying a home
- Allows a strong case to be made on your behalf in negotiations
Decide What You Can’t Live Without
A list of “must-haves” is a great starting place when you are searching for a home, but being flexible is essential. Unless you have unlimited funds, odds are you’re going to need to compromise & be realistic on what you can afford. Talk to your REALTOR® about what you can expect in your budget & let them help educate you on your specific market.
Start The Search
Using a REALTOR® to help you in these initial searches can help keep the process from being overwhelming — use their expertise to keep you on track & isolated to what you are truly looking for.
If you are feeling adventurous, you can always head over to www.Realtor.ca & wade around in the listings pool
Choose A REALTOR(r)
It is generally in your best interest to choose a real estate agent to represent your best interests — this means signing a Buyer Representation Agreement & establishes a formal relationship.
There are many models in real estate & we often hear of the strategy where buyers want to work with the listing agent to save money. I’m not going to take a side & say it’s either a good idea or a bad idea… but it is essential you educate yourself on the pros & cons of this approach — Find out more about Dual Agency.
Get Out & Look At Homes
Whether you see something with your REALTOR® or go through open houses that interest you, this is the part where you physically step foot into homes & get to envision yourself living there. Keep a mental note of your wants vs. needs (this is where those REALTORS® come in handy!) & really get a feeling for the home while you are there.
Making The Offer
Once you have found “the one” your REALTOR® will go over comparable homes with you to help determine fair market value. After you have agreed to the many different terms within the offer, your agent will draft the paperwork & you will need to sign. Your agent then “registers” the offer so it is formally submitted & you wait for the offer presentation.
Negotiations
The offer presentation is where REALTORS® work hard for you… getting you the home you love for the terms you are comfortable with. Communication is key here & your agent will either have you be present or require you to be available during the negotiations.
Your Offer Is Accepted
If negotiations are successful, you will most likely have conditions to fulfill to “Firm Up” your offer. Things like Financing Approval or Home Inspection are usually conditions of the offer, meaning you have a certain number of days to finalize financing or to have a home inspection done before you are fully committed to buying the home.
These would be found on the Schedule A,B,C,etc. attached to the offer & will usually begin with “This offer is conditional upon …”.
You will also be required to provide a Deposit to the Listing Brokerage as soon as there is an accepted offer. This deposit is held “In Trust” (cannot be accessed without consent from all parties involved) & is a good faith measure from you to the Seller saying “See, I really do want to buy your house!”
Once you are satisfied with the results of your conditions (if there are any), your REALTOR® will have you sign another document & assuming you aren’t looking to make any additional changes (say a stipulation that the Seller repair something found on the home inspection), you will have a firm offer & have officially purchased that home!
If for whatever reason you decide not the remove the conditions or you can’t come to an agreement with the Seller on the inspection results, you (and all other parties) will sign a mutual release & your deposit will be returned in full.
Choose A Lawyer
Finding a lawyer to handle the registration of title & transfer funds on closing (among other things) is paramount… we strongly suggest you enlist the service of a Real Estate Lawyer, someone who has experience with these exact scenarios.
If you don’t have someone you would like to use, your REALTOR® should provide you with a list of reputable & trusted Real Estate Lawyers in the area or feel free to ask friends & family for recommendations.
Once you have chosen someone, your REALTOR® will get them all of the necessary documentation from the deal & you will meet with them close to closing to sign paperwork. Your keys to the new house will also be picked up from the lawyer on the day of closing.
Finalize Mortgage
At some point after the offer is accepted, whether it’s before you remove a financing condition or after there is a firm deal, you will have to meet with your mortgage broker or specialist to finalize the paperwork for your mortgage loan.
There may be stipulations in place from your lender requiring a survey, ESA Certificate or appraisal before they will finalize the loan. Your REALTOR® should take care of sending them all of the paperwork required from the deal & will help facilitate any of these additional requests from the lender.
Final Walkthrough
A day or two before closing it is essential that you make time to revisit the property & make sure everything is how it should be… The sellers are packing up (or packed up), the appliances look like they are in the same condition as when you made the offer, there are no damages or substantial changes to the home & contents that will be remaining with the home.
Should you or your REALTOR® notice anything that could result in an issue with the home closing, your lawyer will be notified & they will try to remedy the situation so it will close on time. Sometimes lawyers are unable to reach an agreement & a closing is delayed. Just in case there are any issues, doing this final walkthrough with enough time for lawyers to work their magic is imperative.
Closing Day!
The day has finally come & you’ve got the keys to your new home! This is the day you take ownership of the home & are free to move in. Even if you are delaying when you bring your personal belongings in, we suggest you do another walkthrough & some basic checks to ensure everything is as it should be.
Hopefully this guide will give you a better understanding of the buying process & what to expect along the way. Having a team of trusted professionals around you will certainly help make the buying process more enjoyable & smooth.
As always, Real Estate is very localized & while your process will be similar to this, we cannot guarantee that transactions progress exactly as written here. Feel free to reach out & ask us any questions you may have. If we aren’t your local REALTORS(r) we are connected to a vast network of real estate agents across the country & are always glad to help you connect with someone in your market.
Keeping it Genuine,
The Edwards Team
The Genuine Blog
