How To Buy A Home
For most Canadians, owning their own home is a lifelong dream. It brings with it security, pride of ownership, and control over which improvements are made and how much they cost. With the right planning your home is more likely to increase in value, making it a sound financial investment as well.
Buying a home can be one of the most exciting and rewarding things you ever do, or it can be one of your biggest nightmares. Your experience depends entirely on how well prepared you are and how knowledgeable your real estate consultants are.
This section is designed to help you plan and organize the purchase of your next home and to remove some of the mystery and anxiety from the process.
Select a Real Estate Consultant
This is probably the most important step in the process. You will need to find a professional that you like and trust. You will be confiding in him or her on both a business level and a personal level, and the REALTOR® can make the process pleasant and rewarding, or frustrating and disappointing. Remember that they are key to finding what you want in the right area at the right price.
Be selective! Look for someone you feel comfortable with and who is experienced and knowledgeable. Don't be afraid to ask for references. Once you find someone you feel confident with, sign them up as a Buyer's Agent. It's important that the person you're working with represents your interests exclusively. (To view Shannon and Glenda's references, see our client testimonials or contact us directly.)
See What You Can Afford
For every service or product we buy, the advice in consumer reports is to "shop around" in order to get the best deal. Millions of Canadians don't shop around for their mortgage, and therefore pay thousands of extra dollars in unnecessary interest. Bank loans officers represent only their own company — they have no legal obligation to get you the best product or rate.
The best way to shop around is to choose a mortgage broker that will do the shopping for you. Most brokers are paid by the lender that your mortgage is placed with, and there are no fees if you have a traditional mortgage (broker or lender fees only apply to non-traditional mortgages). Using their lender database, a mortgage broker can instantly comparison shop among all of the available lenders in Canada. With an experienced broker, you can have your mortgage application "packaged" in order to sell all your strong points, ensuring you get the best rates and terms.
Analyze What You Want
The next important step in the process is meeting with your REALTOR® to get prepared for what to expect along the way. During this meeting, make sure the following is covered and fully understood:
- Your needs and expectations. What accommodations are you looking for (bedrooms, baths, etc.)? In what areas? What price range? In what time frame? Bring a checklist of items to go over.
- How often you are available to look at houses, and what you expect from your agent in terms of availability (daily, weekly) and communication (e-mail, phone).
- Your agent should give you copies of all the paperwork you will be expected to sign throughout the process, and should give you a brief explanation of each, including why you should sign a Buyer's Agency Agreement.
Look at Properties
This is the fun part! It is important to limit the number of homes you visit in a day. If you tour too many, they begin to run together and you won't be able to remember one from another.
Record notes about each property on an information sheet, and immediately eliminate ones that don't suit your needs. Remember, feedback to your REALTOR® is crucial. It's important to let your REALTOR® know which houses you like and which houses you don't like, as well as why. Open communication will allow your REALTOR® to choose only properties that will be of interest you.
Select Your Home
Once you have located a home that you really like, your REALTOR® will do whatever research is necessary to help you reach your final buying decision. This will include a Comparative Market Analysis, which determines "fair market value" by reporting on recent sales of similar properties in the chosen neighbourhood or area.
Offer and Negotiate
When making an offer on your selected property, you and your REALTOR® together will decide:
- What price to offer
- How much deposit you will offer
- What conditions (financing, home inspection etc.) you wish to include
- What chattels (personal property) you wish to include (appliances, window coverings etc.)
- When you wish to close (move)
When negotiating with a seller, it's best to remember not to take anything personally. Also, try to put yourself in the seller's shoes. Decide what's not negotiable to you, and be willing to give a little on the things that are. A good REALTOR® will be able to give you plenty of advice as to how to structure your offer.
Once your offer has been presented, the seller will accept it, reject it, or make a counter offer. It is important for all parties to focus on their real goals through this process.
If you asked for time to arrange certain things as part of your offer, you have what is called a conditional agreement. Offers can be conditional due to a request for mortgage approval, inspections, acceptable homeowners or condo association documentation, the sale of property, and many other things.
It is important that all deadlines be met and that all conditions are removed exactly the way the agreement specifies. Your REALTOR® is responsible for ensuring that these procedures are done correctly and in a timely manner.
Select a Lawyer
Your lawyer will take care of all necessary legal procedures to implement your Contract of Purchase and Sale. The lawyer conducts a title search and prepares all of the documentation (certificate of title, charges, discharges registrations etc.) necessary to complete the sale.
Close Your Purchase
Several days prior to closing day, meet with your lawyer to sign the documentation required to complete the sale. Your lawyer should explain every document to you in a satisfactory manner. Do not ever feel intimidated. If you don't understand something, ask! You should understand everything about the legal aspects of home ownership. Make sure you know how many funds to provide for whatever down payment and closing costs that you are expected to pay, and be ready to certify your cheque.
Move to Your New Home
This is the last and probably the hardest step in the home buying process! A little bit of planning and forethought will make for a much smoother move:
- Be sure to change your address with the post office, your banks, and any other correspondents at least 30 days in advance.
- It's a good idea to call and verify receipt of the address change whenever possible to avoid late payments.
- Call to order your utility hook ups 2-3 weeks prior to your move.