Make Your Dream Home A Reality With Smart Home Buying!
From the start of your home search to your move-in date, buying a home is an exciting time! But the home buying process can also be an overwhelming and complicated process. Buying your dream home is an important decision, one of the biggest many people will ever make, so it’s important to get it right. Follow this step by step home buying guide and you’ll be well on your way!
Step One: Setting Yourself Up For Home Buying Success
Define Your Wants and Needs
Start the home buying process by making lists of the features that describe your ideal home. Start with the “Must Haves” – the things you can’t live without. Then, make a list of “Nice-to Haves”, perhaps a pool, deck or finished basement. Finish by listing features that are “Never Haves” – features you are indifferent to or definitely do not want in your new home. Take these lists with you as you tour homes and constantly refer back to them throughout your home buying search.
Understand Market Conditions
A Buyer’s Market and a Seller’s Market create different advantages or disadvantages for the home buyer. Knowing which market you are buying into will make you aware of what to expect, the challenges that may lie ahead or the advantages you can benefit from.
Buyer’s Market
In a buyer’s market, there are more homes listed for sale than there are buyers looking to purchase. It goes without saying that when the supply of homes is greater than the demand, home buyer’s benefit greatly and their negotiating leverage increases significantly. Competition for the same home and multiple offer scenarios greatly diminish, leveling the playing field between buyers and sellers.
Secondly, there’ll be a larger and better selection of homes to choose from, giving you the opportunity to find the perfect home for you and your family versus purchasing a less than adequate home under pressure to complete the transaction.
Lastly, there can also be significant financial benefits. In a buyer’s market, homes generally sit on the market longer and may go through several downward price adjustments, allowing you to purchase your home substantially below the original list price.
Seller’s Market
In a seller’s market, the demand for homes is greater than the number of homes available for sale. Buyer competition is fierce as they all compete for the small inventory of homes. In this market, your negotiating power is greatly reduced.
Not only will you have a diminished selection of homes to choose from and a very short period time to make your decision, you may find yourself in a competitive bidding situation where you will have to pay more for the home. You may also feel pressured to reduce the conditions on your Offer to Purchase as seller’s tend to favour buyers with the least or no conditions.
Step Two: Understanding Financing In The Home Buying Process
Planning ahead from a financial perspective is key to your success in the home buying process. Before you start shopping for a home, you need to determine the price range that best suits your current financial situation.
Determine Your Down Payment
Down payment requirements vary based on the selling price of the home you choose. The bigger the down payment you make, the more you save in the long-run in monthly principal, interest rates and the overall interest paid during the lifetime of the mortgage.
Determine How Much You Can Afford
Based on your down payment, income, existing debt and regular expenditures, determine how much you can afford to pay every month and the price range that works within that budget.
Seek Professional Mortgage Advice
Speaking to a qualified Mortgage Broker will help you navigate through the mortgage process and find the solution that best fits your situation.
Getting Pre-Approved
Mortgage pre-approval is a critical step needed before the house hunting process begins. Getting pre-approved for a mortgage confirms how much financing you are approved for to buy your new home, allowing you to start the house hunting process focusing on properties within your price range and budget. Then, when you find that perfect dream home, you can proceed knowing that you have already met the necessary financing conditions.
Step Three: Teaming Up With a Real Estate Agent
Purchasing a home is a complicated transaction that requires professional knowledge and guidance that only an experienced real estate sales representative can provide.
They will guide you through the entire home buying process, from showing you homes that match your criteria, guiding you through the home buying process, and negotiating the best possible price for your home. They’ll also draft the contract of purchase and oversee the contract to completion. They understand local market conditions better than you do and are experts in their field. They’re best positioned to negotiate with the sellers representative and act as your advisor, consultant and negotiator until the deal is closed.
Step Four: Finding Your Home
Now it’s time to get out there and find your dream home. Here are some considerations as you set out on the house hunt.
Choosing the Right Neighbourhood
Think “big picture” and consider not only your current lifestyle requirements but your future needs as well. Do you need to be close to schools, public transit, highways or your place of employment? Consider proximity to other amenities like parks, recreational facilities, grocery stores and doctor and dentist offices. Determine if this is a neighbourhood that fulfils all your lifestyle needs.
View All Properties With A Critical Eye
Consider such things as the age of the home, how the property has been maintained over the years and obvious signs of problems, such as a damp basement, aged windows and doors, water damage, squeaky floors, damaged or missing shingles etc. This will help you in determining your final offer price for each home and assess upfront if this properly is right for you!
Step Five: Making an Offer
Once you’ve found the perfect home, your real estate agent will help you draw up an Offer of Purchase and Sale to present to the sellers. This legal document specifies the price, the closing date, and the conditions of sale.
The Deposit. The deposit shows the seller that you are serious and committed to buying the home. It is held in trust until the closing of the sale and will be applied against the purchase of the home.
Step Six: Doing Your Homework
At this stage in the home buying process, you’ll need to bring in your team of experts to help you get to the finish line and ensure the investment you are about to make is sound. Here are the key people you should be talking to:
A Home Inspector
Before purchasing a home, it is very important to know the true condition of the home. If the home is free of needed repairs, you can move forward confidently with your purchase price. If repairs to the home are needed, you can negotiate with the seller either to complete the repairs prior to taking possession of the property; negotiate a reduced asking price or withdraw your conditional offer.
A Mortgage Specialist
Once your offer has been accepted, completing your mortgage approval is the next critical step in securing your home. With a copy of the Offer to Purchase and the necessary financial information, your application will be submitted to the mortgage lender that you have selected. The lender will qualify the application and complete a valuation on the property you have purchased.
A Real Estate Lawyer
With the deal finalized, and the financing in place, your real estate lawyer will review the Agreement of Purchase and Sale, do a property title search, check that your home complies with current building and zoning codes, ensure utilities and property taxes are paid, review the mortgage agreement and get all of the paperwork ready for closing. Your lawyer will also arrange for a survey to be completed, if necessary.
Step Seven: Closing the Sale
On closing day, your lawyer and the seller’s lawyer will exchange documents and cheques. Your lawyer will also register your new home in your name. When these tasks are complete, you’ll get the keys to your new home, allowing you to move in.
Make Your Way Home….
Your dream home is out there! Let us help you find it. Our dedicated team will help you make the best decision.
Why go it alone? Give us a call today!
