Homebuying Process

When you make that choice to buy real estate, whether you are a first-time buyer or looking to move somewhere new, it is always a time of mixed feelings. It is of course exciting, it is the biggest purchase of our lives in all probability and represents a new start, but for most of it is also a little bit frightening, mainly because it is the biggest purchase of our lives! Understanding the buying process can help make things more manageable for new home buyers, and make sure that even those who have purchased before do not forget anything. To help with that we have put together a comprehensive real estate buyers guide that will take you through the steps you need to take, and how to avoid any costly mistakes along the way.

STEP 1 – Build a Budget

An effective budget will map out your plan to set aside money for your down payment and additional costs. It will also help determine the price of home you can afford.

STEP 2 – Investigate Mortgage Options

There are many different types of mortgages. If you don’t have the 20% down payment for a conventional mortgage, you can get a high ratio mortgage, combined with mortgage default insurance, that allows for a smaller down payment. You should be preapproved for a mortgage before you start house hunting.

STEP 3 – Choose a Realtor

Your realtor will play a vital role in your homebuying experience. The best realtor will be a combination of a personal advisor, consultant and negotiator. He/she will show you homes that match your criteria, guide you through the homebuying process, negotiate the best possible price for your home and deliver your closing documentation.

STEP 4 – Get a Lawyer

It’s important to hire a lawyer who specializes in real estate. You could find yourself in a bidding war for the home you want, and it doesn’t hurt to have a lawyer look over any offer to purchase before you submit it. A real estate lawyer will also conduct a title search and check for outstanding taxes and liens on the property.

STEP 5 – House Hunting

Create a wish list
House hunting can be a lengthy process. To save yourself time, know exactly what you want in a home beforehand. Think about your immediate needs, future plans and lifestyle. When you look at homes, you may be tempted to concentrate on the home, but don’t forget to look at the whole property: the lot, the neighbourhood, the surroundings. How close is the home to facilities and services important to you?
Bring your checksheet
When you’re ready to begin shopping for a home – often called “house hunting” You may end up seeing multiple homes in one day. This checksheet will help you compare and keep track of the homes you visit. And help you remember the features you did or didn’t like.

STEP 6 – Make the Offer

Your agent presents the offer to the seller. This document includes the price, conditions, deposit and closing date. The seller either accepts, rejects or counters the offer (also called “signing back” the offer).

STEP 7 – Home Inspection or New Home Warranty

Hiring an inspector is voluntary, but it’s a smart idea for resale homes. You can choose to make your offer to purchase the home conditional on the outcome of your inspection. If your inspection reveals major problems, you can negotiate those repairs with the seller before your deal closes, or legally withdraw your offer. What is a New Home Warranty? New Home Warranties are typically used when you buy a brand new home. The builder provides a New Home Warranty to cover things like deposits and completion dates, along with labour and materials for at least one year after the home was built. It also protects you against structural problems for a minimum of five years.

STEP 8 – Finalizing The Deal

Finalizing the deal will include the final approval of your mortgage, a meeting with your lawyer to finalize details like insurance and conditions, and the results of a title search.

STEP 9 – Moving Preparations

There’s a lot to do before you move. Line up utilities and other services like phone, cable and internet. If you rent, you must give your landlord notice. Also, forward your mail to your new address and hire a moving company. Preparing these things well in advance will help you make a smooth transition to your new home.

STEP 10 – Closing Day

This is the day you legally get possession of the house. Your lawyer completes the paperwork (so the home is in your name), payments are finalized and you receive the deed and the keys. Congratulations on your new home!

Finding Professionals to Work With

If you believe you’re financially ready to buy a home, your likely next step is to find the professionals to assist you. In many cases, this will be a mortgage professional (a bank employee or a licensed mortgage broker) and a licensed real estate professional. You want to find professionals you trust, who can answer your questions, help you secure financing, help you find a property, and help you successfully negotiate a purchase. It’s important to find the professionals that will suit your needs. But how?

Word of mouth referrals

Get recommendations from your friends and neighbours about experiences they’ve had with mortgage brokers and real estate professionals.

Search online

The internet is your friend. Almost all mortgage brokers and real estate professionals have an online presence, whether it’s a personal website or profiles on various social media sites. Do some searching online and find someone that appeals to you.

Find out if they’re licensed

Mortgage brokers and real estate professionals need a licence to operate in our agent. Do a public licence search on RECA’s website to make sure a professional’s licence is current. Visit Bank employees can assist in mortgage financing and do not require a licence through RECA, but mortgage brokers do. Either one can assist you with your mortgage needs.

Check the RECA website

RECA posts disciplinary decisions on its website. Check the Complaints & Discipline tab on the Consumer side of RECA’s website for two years of disciplinary history, to see if RECA disciplined the professional with whom you want to work.

Interview some options

While the above suggestions will help you find professionals to talk to, they won’t tell you exactly which professionals are right for you. Your next step should be to interview those you are considering. Make sure they have the experience, background, and knowledge necessary to assist you in your purchase or sale. You need to feel comfortable with your choice, so it’s a good idea to ask them for references and let them know you’re interviewing multiple professionals.