If you have bought a house before you are most likely aware of the steps required to get pre-approved, approved, compile a deposit and the many other steps that fall into buying a home. However, if this is the first time you are buying a home you might not know where to start.
Rest Assured, I am here to help! I want to ease you through the guess work of home ownership and take off the stress of the unknown.
Let me help you get ready to buy your first home. All of the times suggested are of course dependent upon the market, time of year etc. so don't use them as a hard and fast rule.
Step One – Getting started
Timeline = 1 - 3 weeks
Sounds easy enough but there are a few steps that are required from you before you can walk into your financial institution and ask for pre-approval. To get pre-approved for a mortgage you will need the following information:
– Letters of employment stating the amount of gross income per month.
– List of any other income; e.g. investments, stocks, bonds, RRSP’s, GIC’s, revenues, etc.
– List of any debts; e.g. car payment, bank loans, furniture loans, consolidation loans, etc.
– Balance on credit cards; e.g. Visa, Master Card, Zellers, Bay, Sears, etc.
– List of any writs outstanding or claims against you; e.g. bankruptcy, divorce, etc.
Before you head down to your local financial institution to see if you are pre-approved always ask me for advice.
I can also suggest a number of lending institutions or brokers that might be able to match financing to any of your special needs.
Next, you will need to arrange the down payment.
The more you understand about down payments and the more you have saved for your down payment, the easier this is going to be on you (financially and mentally).
Establish the following when calculating a down-payment amount:
– How much total down-payment is required? How much is required for the deposit with the Offer to Purchase? CMHC?
– Where will these funds come from (RRSP, Savings Account, gift, etc.)?
– How quickly can you access funds?
Step Two – Get a great Realtor
Timeline = 1 week
Interview some local Realtors.
During this period make sure you have a great Realtor that you are comfortable with and trust. Check for testimonials and have a list of questions ready to ask. As a first time buyer having someone on your side that understands all the legalities and is working for you is a huge advantage. You are going to be doing a lot of negotiating so pick someone who you feel can get YOU the best deal
Local knowledge is essential to you finding your first home so make sure you get a connection with your Realtor. See our article on how to interview a Realtor here.
Step Three – Look For Your Home
Timeline = About 1 to 12 weeks (maybe more)
This is an exciting time. You will probably want to start looking at communities ion your own perhaps by driving around but I would recommend that you ask your Realtor about the various areas and the market values in them (resale etc.) Before you get started it might be wise to sit down and make a list of your needs and then put down your wants. SEE OUR HOME CHECKLIST HERE
Let your Realtor know what things are important to you (show your checklist) and then you wont be wasting time on houses that are not suitable or out of your price range. Another advantage of using a Realtor is the Personal Client Services MLS data tool, I can sign you up on the PCS system to have new and relevant listings delivered to your email before they hit the MLS giving you an advantage in finding your ideal home. You can also try open houses which are a good way of checking out property in the area you like.
Once you have a good knowledge of the community you like and the type of house you want lets arrange showings and go and see the houses.
So you find a home that fits your needs and includes your wants then it’s time to make an offer!
Step Four – Making An Offer:
Timeline = 1 to 2 hours
There are not a lot of steps to tackle here, but there may be a lot of writing. The offer contains the conditions in which you are comfortable moving forward and buying the house. This includes addressing all of your concerns and ensuring you protect yourself and your investment moving forward. Your Realtor will advise you on this step in great detail. You need to ensure that you have subjects in your offer in case your financial status has changed since you were pre-approved (subject to finance) or you want to ensure the home is inspected.
This step will involve pricing the home, you need to make sure that the offer is not over the market value of the house and the value offered will be accepted by the bank when it lends you the money to buy it. Make sure your Realtor has given you all the information on recent sales in the community so you are able to justify the offer price dont let emotions get in the way and be tempted to overpay because it seems the perfect home. Make sure you have included the items in the house that you want to include in the sale (washer, dryer, hot-tub etc.)
Also in the offer will be your dates that you want to get possession of the house, this may be something that differs to the sellers so again negotiation is key. Make sure if you are renting that the dates cover your monthly rental period and it gives you enough time to give notice.
Step Five – The Subjects:
At this stage, the seller has accepted your offer.
Subjects that you may have in the offer may include
– Financing – get mortgage approval
– Inspections, etc.
– PDS (property disclosure statement)
– Title docs
So you have your finance, the inspection was good and you have removed the subjects, looks like you are buying a home!!
Step Six – Sold!
Timeline = Approximately 2 to 12 weeks
Congratulations! You have secured your home! However, it is not time to open the bubbly just yet. There still a few tasks you need to complete in order to secure your investment and protect yourself.
– Arrange Insurance
– Meet with lawyer to sign papers
– Meet with mortgage broker to sign papers
– Arrange for movers
– Arrange for utility hook-up
– Change of address notices
Step Seven – Possession
Timeline = As previously agreed upon in the offer
Now it’s time to pack up your old home, unpack the boxes in the new home and it is also the perfect time to pop that bubbly!!!!!!
On the day of possession, we will most likely call you around noon and then you will enter your new home.
Congratulations on the purchase of your new home!