Disclaimer: We are Realtors - This blog is for generic information purposes only and we encourage you to please do your due diligence and seek area appropriate professional advice (eg. Legal, accounting, mortgage, inspections and such)
STEPS TO BECOMING A FIRST TIME HOME BUYER
As a person about to embark and the amazing journey of buying your very first home or first condo, you owe it to yourself to learn as much as you can about the process. There’s a whole list of things that you need to learn. Why? Well, for starters, it could be the first and biggest investment you have ever made, so you can really benefit from all there is to know, and we can help you along the way.
In addition to learning all there is to buying your first home, together with the VIP Home Team you can gain the knowledge to make the good choices. Therefore, making your journey easier. To start with that, we have put together a few things to guide you in your home buying process. Be sure to read through to the bottom, there will be more information on owning your first home.
STEP 1: ENSURE YOU QUALIFY FOR A MORTGAGE
Before you set out to do anything else, find a reputable mortgage agent or contact your bank and ask to speak with their mortgage professional to find out how what price point you will pre-qualify for. If you are pre-qualified for a mortgage ahead of time, the bank will go through your records to check your credit standing, debt score, annual income and down payment.
The bank’s approval will be presented to you in writing and it usually includes the guaranteed interest valid for a period of time, usually 90 days and sometimes longer. Verify this with your mortgage professional. Pre-qualification will ensure you know how much to expect from the bank and the kind of homes you should look at during your search.
STEP 2: CREATE A WISH LIST
As a first time homeowner, there are things you will want or need. So, prepare a list:
- Don’t wants
- How many bedrooms
- Number of bathrooms
- Type of outdoor space desired
- Neighbourhood (location)
- School district etc.
Knowing what you can afford and being realistic within that budget will ensure you find the right place at the right price! You won’t get the best deal for your new home if you haven’t first determined what your ‘must haves’ verses ‘can live without’ are. Searching beyond your means will only lead to heartbreak, frustration and disappointment.
STEP 3: PICK A QUALIFIED TEAM
Finding your new home may be the greatest purchase of your lifetime; but be sure that you don’t do it all alone. Begin by finding a qualified real estate agent who operates within your local area and engage them to help you find the right home.
Also, find a lender who will educate you fully on your financial options and answer all of your questions. .
You are likely to need contacts for a variety of professionals in addition to a Realtor and a mortgage agent. To be safe, consult your family and friends for the right recommendations. Additionally, due diligence on your part will come in handy. Be patient, and don’t be put off by having to spend the time to research and interview the professionals you will come across. Here are a few you may need:
- Mortgage Agent
- Home Inspector
- Real Estate Lawyer
- Duct Cleaning Company
- Moving Company
STEP 4: GO HOUSE HUNTING
Things are getting exciting! Now that you are now fully pre-qualified, there’s a team of professionals on standby and you have a visual picture of the kind of home you want, the next step is to go through listings. Although the realtor.ca website may seem like the right place to kick-start your search, your agent can be very helpful in this process. They can set you up to receive new listings by email, that match your search criteria.
Searching for the right home will involve sorting through listings, previewing potential homes online and then going out to view them physically. This will be your chance to look at and have a feel for the various neighbourhoods, refine your needs and make further inquiries.
Although walking around with a wish list sounds somewhat scientific and is the best tool to help you narrow down your search, most people walk into a property and decide it’s the right one just from having a feel for it. You will agree that it helps a lot when such a home meets all your needs, but it also helps not to underestimate how much having a feel for it may solidify your decision to make the offer.
STEP 5: MAKE YOUR OFFER
You have narrowed down your search to that amazing home. It meets the majority if not all of your needs, the price range is right and the whole place feels perfect. What Next? Make your offer before anyone else grabs it from under your nose!
But here’s what you need to know. The offer process is both nerve-wracking and exciting, so approach it with caution. Let your team of professionals handle the next steps like:
- Advising you on how to formulate the offer and all of the details within
- Know what conditions to include for your protection
- Handle the negotiations with the Seller and their Realtor
- Review and approve all documents with legal expertise
The first step is drafting an agreement of purchase and sale or APS. This is a legal document that has all the details of your purchase, including the price of the home and all chattels such as the appliances that come with it. The APS also contains the closing date and the conditions that must be met for the purchase to go through.
Once you place an offer, the seller reserves the right to accept, reject or place a counter offer. During these negotiations, be prepared to make compromises on tiny issues, but a sensible realtor will go to any length to ensure you have what you are looking for.
STEP 6: GET AN ACCEPTED OFFER, THEN PAY YOUR OFFER DEPOSIT
You will also be required to place a deposit, to bind the offer, usually paid upon the acceptance of your offer. This is paid to the listing brokerage and will be held in trust until you close on the deal. Once all conditions are met, and you submit the necessary documents, the agreement is considered legally firm and is binding. Your next step is to wait for the closing date as you prepare to move into your new home.
STEP 7: FULFILL ALL CONDITIONS
Conditions, in this case, refer to the requirements stipulated within the APS that you must fulfil for your purchase to be successful. In the offer you made, it’s possible that you listed conditions that give your legal team the power to go through legal aspects of the property as well as for the lender to perform an appraisal.
STEP 8: CLOSING DAY
At this point, you are almost a new homeowner. Once you close the deal, the home becomes yours! Closing means that the purchase funds have transferred from your bank to the Seller’s lawyer and then the property’s title is legally transferred to you. That will happen after all financial and legal requirements are fully met.
Closing your deal involves other professionals: your lender and lawyer. However, before you embark on closing the deal, be sure you know what the closing cost might entail
All the steps from the initial spark of an idea about purchasing a home to the pre-qualification for a mortgage to the actual finding your home, making an offer and ultimately moving in are exhilarating and at times like riding a roller coaster. Selecting the right team of professionals to take time in guiding you, answering your questions and displaying the ability to predetermine what issues may come up and are able to prepare you properly will be your greatest asset. They will make the journey as smooth as it can be and set your mind at ease when you need it. Ask questions and select wisely. Now get started…. There’s nothing like the present!!!