Buying a house is one of the largest financial decisions of your life; but how do you know when you’re ready to buy a home? We can help you find that out. Armed with the right information, you can shop for a house, apply for a mortgage, and close the deal with confidence.

Step 1: Make Sure You’re Ready to Buy.

If you’re thinking of buying a home, this 12-step plan will help to guide you in the right direction. But before we jump right in, you have to make sure three things are ready: you, your bank account, and the real estate market.

Are you ready? Be sure.

Owning the roof over your head will bring you great pride, but with that pride comes accountability and effort.

There’s the obvious financial responsibility, but your home will also require constant care and upkeep. That’s where ownership comes up.

Is your bank account ready? Check it twice.

Your first home will be the biggest financial obligation you’ve ever faced. You should already be an experienced saver, and good at managing debt like student loans or credit cards. Ideally, you’ve also saved up some money for a nice down payment. Talk to your financial institution about the Home Buyers Plan too. Our next step will give you a crystal clear picture about how much you can afford.

Is now a good time to buy? Here’s the quick market tip you’ll ever get.

Markets go up, markets go down and even the smartest experts can’t accurately predict when a market will peak or bottom out. The good news is, if you’re buying a home as a long-term investment (and for long-term enjoyment), you’re protected from short-term changes in the market. Over time, real estate has almost always increased in value.

Pick a home that meets the needs of you and your family. Then you’ll enjoy living in your investment as it grows in value. A home is one of the best financial decisions you can make, so make sure you think things through.

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Step 2: Figure Out How Much You Can Afford.

Before you start looking for your dream home, let’s find out how big you can dream. Knowing your true budget is the first and most important step in buying a home. Why?

A home is a big purchase.

It’s probably the most expensive thing you’ll ever buy, and there are lots of expenses you might not even know about. Everybody’s total costs are different, but it’s almost guaranteed you won’t have that much money saved up. Hopefully you have enough for a nice down payment. Here’s the reality in detail:

Cost of buying a home =    One time costs (down payment, legal fees, inspection fees, taxes)   

Monthly costs (mortgage, utilities, maintenance, insurance, property taxes)

Step 3: Decide What You Want to Buy.

First, decide which area you want to live in-. Urban, Suburban ,Smaller Cities and Towns or Rural side

Next, decide what type of home you want.

By now, you probably have a good idea of what type of home is right for you based on the size of your family. Ranging from a Single -family detached,  linked, duplex or triplex, townhouse or Condo. 

New or Resale?

Nothing can match the charm of an older home. As a bonus, the previous owner may have made improvements and upgrades However, some may have a little too much ‘character ’ like a leaky roof. Know what you’re getting yourself into. Always work with a knowledgeable REALTOR®, and never buy a resale home without a Home Inspection.

If you choose to get a new house for yourself instead, you will obviously be the very first person to live in that home. You have the luxury of building and customizing your home to your décor tastes. But you always have to be prepared for constant touch-ups.

Before you commit to anything, carefully examine the property, and take a tour of homes built by the same building company. Check if you like the craftsmanship and quality of their work. Have your REALTOR® and lawyer review everything before you sign. While your home is being built, stay active and remember, you have a legal right to make a full inspection of the house before you accept it as complete. 

Your strategy should be to find a home within your price range that meets both your “needs”, and “wants”

Step 4: Find a Realtor® that is Right for You.

You know how much money you have, and you have a good idea of what you want. Now you need to make your search a success. Real estate agents are important partners when you’re buying or selling a home. The  helpful information about the home buying process, negotiating skills, and familiarity with the area you want to live in can be extremely valuable. REALTORS®. Highly trained, and continually training.

In Canada, licensed REALTORS® are members of their local real estate board, a provincial association and The Canadian Real Estate Association. This system of membership ensures the highest level of service and that you are always treated with honesty and integrity. This is backed by the REALTOR® Code of Ethics. Take a look at ‘The REALTOR® Commitment’ to learn more.

The Three REALTOR® Relationships

The relationship between a real estate brokerage and a client is called “Agency” and there are three major kinds:

1.Seller (Vendor) Agency

The real estate brokerage and all its REALTORS® represent the seller exclusively and it’s their job to get the best offer on the home. They are legally obliged to tell the seller anything known about a buyer. For instance, if a seller’s REALTOR® knows a buyer will pay more for a property, they must tell the seller.

2. Buyer (Purchaser) Agency

The real estate brokerage and all its REALTORS® represent the buyer exclusively. They seek out homes that meet the buyer’s needs and help assess potential homes. They keep the buyer’s information confidential and never disclose information like the maximum amount their buyer is willing to pay. You may be asked by your REALTOR® to sign a buyer agency agreement. It ensures that the REALTOR® and the brokerage can look after your best interests.

3. Dual Agency

Sometimes, a brokerage may have an agency relationship with the buyer and the seller. Both the seller and the buyer must give their informed consent, and the REALTOR® must always provide full and timely disclosure of all pertinent information to both parties.

SELL AND BUY WITH THE SAME REALTOR®?

Absolutely! Especially if you’re remaining in the same community. Your REALTOR® is already an expert on your needs, so it can save you a lot of time and energy.

Step 5: Researching

The hunt is on! Time for you and your REALTOR® to find that perfect home.

Read all about it.

As soon as you can, start checking Websites, newspapers, and magazines that have real estate ads. Make a note of particular homes you are interested in and see how long they stay on the market. Also, note any changes in asking prices. This will give you a sense of the housing trends in specific areas. Let your REALTOR® know what you like. Visit areas you are considering and get a feel for them. Make note of the surrounding schools, shopping and recreational areas. Keep an eye out for not-so-great things like large industrial areas, railway tracks, high-voltage power lines and airports. Visit during the day and at night.

Open House, come on in.

‘Open houses’ are a great way to see inside the homes of your potential neighborhood.

Walking through a potential home is a thrill, but try not to lose your head. Make sure you choose a home that meets all your needs and fits your budget. That’s why we’re arming you with this long Checklist. Happy hunting!

Step 6: Sell Your Current Home.

Not many people can hold on to two homes, so you’ll probably need to sell the home you have now. If you’re selling one home and buying another, you don’t really have to worry about playing the market. If you sell your existing home for a ‘low’ price, you’re probably also buying at a low price. If you are upgrading to a larger home, this actually works to your advantage. Imagine when your bigger home is on the upswing.

Buy first or sell first? The eternal question.

Many people are able to time their sale and purchase so they happen on the same “closing date”. Buyers can make their offer “conditional” on the sale of their existing home, to make sure they’re not left paying for the upkeep of two homes. When selling, you can try to extend the “closing period” to give yourself more time to find your next home. REALTORS® are very skilled at this sort of negotiation, and can make your transition a lot easier.

Sell with a REALTOR ®, or go it alone?

It’s wise to seek a professional when selling your most valuable asset. Real estate transactions are complex, time consuming and involve a lot of legal documentation. Finding your new home and changing your life is hard enough! Your REALTOR® is expertly trained and highly motivated to get you the most for your home.

Step 7: Add a Lawyer to Your Team.

Buying a home involves piles of legal documents. You need someone to translate the ‘legalities’ and ensure your best interests are protected.

REALTORS® will happily give you the names of several good lawyers. They can’t legally recommend just one, but they’ll only refer lawyers experienced in real estate. Be sure you ask how they structure their fees, and get an estimate of the other legal costs you can expect.

How your lawyer will help.

There are many, many legal steps to transferring ownership of land from one person to another. Pitfalls like fraud, government legislation, zoning issues or unpaid taxes may come up. If not, a lawyer will surely earn their pay by making the legal transfer of the home a smooth process

Step 8: Make an Offer.

You’ve found a home? Congratulations! Now, if you actually want to make it yours, you have to make a successful offer, one that the seller will accept.

Preparing the offer.

REALTORS® are expertly trained and will prepare the offer for you. Here are some terms you’ll see in the offer:

Buyer or Purchaser – That’s you.

Seller or Vendor – The present owner(s).

Purchase Price – The most important number.

Deposit – A cheque you write to the seller’s broker, who deposits it in a trust account. The size of the deposit is up to you.

Apart from that, Clauses particular to this agreement ,Chattels included and fixtures excluded, Irrevocability of the offer ,Completion date etc.

When it comes to the type of offer you make, it really depends on your individual situation. Discuss your options with your REALTOR® to see which of these offers is right for you. Firm Offer to Purchase or ,Conditional Offer to Purchase

Acceptance of Offer

An Offer to Purchase is presented to a seller who may choose to accept the offer, reject it, or submit a counter-offer. The counter-offer may be in regards to the price, closing date, or any number of other variables. Offers can go back and forth until both parties have arrived at an agreement or either side ends the negotiations.

Finally Submitting the offer

Step 9: Arrange a Mortgage.

Money makes the world go round, and a mortgage gives you the power to buy a home. This isn’t the most fun step in buying a home, but it’s vital.

Who do you talk to?

There are hundreds of banks, credit unions and other lenders out there who would love your monthly mortgage payments. REALTORS® are very knowledgeable about Mortgages and have lots of good advice.

Call a Mortgage Broker.

Mortgage brokers are another great resource. They find low rates for a living, and they usually don’t get paid unless you sign a mortgage through them, so they’re highly motivated to get you the best deal.

Your best mortgage might be the seller’s mortgage.

You can sometimes take over or ‘assume’ the seller’s mortgage. This is a great idea if the seller is locked into a lower interest rate than you can get right now. Your REALTOR® can help you.

 How big a down payment?

You want as small a mortgage as possible, which means making the biggest down payment possible. Just remember to set money aside for all the fees associated with buying a home. Not to mention moving, repairs, renovations, new furniture…think ahead.

What you need to apply for a mortgage.

Letter of employment confirmation – Ask your employer for a letter that confirms your position, your pay and how many years you’ve been with the company.

List your assets – Your car, stocks, bonds, GICs. Show which assets will be used for your down payment.

List your liabilities – Car payments, student loans, credit card debt. List all the money you owe, and note how you’re paying it off.

Social Insurance Number – And your chequing account number, and your lawyer’s contact information

Information about the house you want to buy-The home is your security on the mortgage, so the lender wants to know all about it.

 Step 10: Find a Home Inspector.

Home inspections rarely cost too much  more than a few hundred dollars, and their service can save you from trouble when you move in.Your offer to buy may be conditional upon a satisfactory home inspection. If the seller doesn’t want you closely examining the home before you take possession, you have to wonder why.

Go with a qualified professional.

Make sure your inspector is a member of a provincial association of home inspectors. It’s your guarantee they have the training and experience for the job. Your REALTOR® can recommend several home inspection companies to choose from.

What will they check during the inspection?

Lots of stuff. All the small and big things. Plumbing and electrical systems, the roof, visible insulation, walls, ceilings, floors, windows and the integrity of the foundation. They check for nasty stuff like lead paint, asbestos, mould, problems with wiring, evidence of pests like mice or termites. A good inspector should make you feel like you’re watching a CSI detective.

Join the inspection.

There’s no better way to get familiar with your new home than being part of this checkup. If any problems are detected, you’ll see them firsthand, and you’ll also learn some maintenance tips from a genuine pro.

You’ll get it in writing.

Their report will summarize the condition of your home. If there’s anything that needs work, the home inspector will provide an estimated cost for the repairs.

Home inspection for a new home?

New does not equal perfect, and construction quality can vary greatly from builder to builder.

Repairs and corrections will probably be covered by a provincial new home warranty program like Tarion, so bad news doesn’t necessarily mean it will cost you.

Step 11: Close the Deal.

Your offer has been accepted and you can’t wait to move in.But You have to close the deal first. Your REALTOR® and lawyer will do most of the closing work, but here’s your checklist.

Closing checklist

Immediately begin satisfying any conditions of the agreement that require action on your part. Your REALTOR® will fill out the documents stating that the conditions have been satisfied.

Have your lawyer begin searching title to the property. This can take a while, so make sure you give ample time.

We recommend a home inspection to avoid any unpleasant surprises on move-in day.

Well before closing, get your homeowner’s insurance. Your insurance broker will give you a ‘binder’ letter certifying that you’re covered. You can’t get a mortgage without this letter!

Contact your lender and have them finalize your mortgage documents. Have your lawyer review them before you sign.

Your lawyer will transfer essential utilities like hydro and water, but you’ll have to make sure telephone and cable companies switch their services to your name.

If you rent, you must give notice to your landlord, or sublease your apartment.

Begin planning your big move! Where are those cardboard boxes? Book your moving service early to avoid scheduling problems.

Send out your change of address information and fill out a card at the post office.

Contact the Ministry of Transportation about changing your driver’s licenses.

A day or two before closing, you’ll meet with your lawyer to sign the closing documents.

Your lawyer will tell you in advance what certified cheques you’ll need to seal the deal.

The big day arrives

Before you know it, you’ll be handed the keys your new home.

Congratulations!

Moving day will come sooner than you think, so get planning now.. Verify with your lawyer and schedule your moving times accordingly.