You’ve most likely heard in the news that interest rates are skyrocketing, inflation is at an all-time high, and the price of homes is beginning to slow down.
This might have you thinking about whether or not it’s the right time to buy a home – especially for first-time homebuyers.
Whether you are just thinking of buying, or have started your search, here are some important steps you should take before you buy your home or condo.
Table Of Contents
1. Find A Trusted Real Estate Agent
2. Find A Mortgage Expert & Lawyer
6. Figure Out What You’re Looking For In A Home
9. Negotiating May Need To Happen
1. Find A Trusted Real Estate Agent
Interview three full-time professional realtors who work in the area that you are interested in buying. The best way to find your realtor is through recommendations from friends and family. Being referred to a realtor is always more reliable than selecting realtors through advertising.
Give us a call, and we’d love to sit down with you – check out all our real estate agents and see which are right for you!
2. Find A Mortgage Expert & Lawyer
Once you have selected your realtor, they should make use of assets like a mortgage calculator, mortgage specialist and knowledgeable lawyers. Take your time to make some calls to do an introduction and to discuss fees and the services they provide.
3. Prepare Your Finances
Now that you have your mortgage broker selected, it’s time to get your financing in place. Getting pre-approved for a mortgage will take at least a week.
To get this started, you’ll need to know where you’re getting your down payment from, and how much you’ll be able to put down on your potential purchase. If you are receiving a gift from your parents or grandparents you will need to show this money in your account.
Secondly, ask the mortgage broker for an explanation of locked in mortgage rates vs. variable mortgages. A great mortgage broker will give you the best advice on what type of mortgage will suit you.
4. Figure Out Closing Costs
Your lawyer will advise you on what your closing costs will approximately be. These are generally around 1.5% to 2% of the purchase price, so if you are buying a $500,000 house/condo, make sure you have an extra $7,500 to $10,000 to close on your condo or your new home.
5. Start Looking At Homes
You now have a realtor and have signed a buyer representation agreement with them. You’ve been pre-approved for a mortgage and have your deposit and closing costs in your account. Now, it’s time for the fun part!
As I used to say to my clients, “Now we get to go ‘car’ or ‘dress’ shopping for your new home. Grab a latte, kombucha, or tea and let’s get ready to start shopping!”
6. Figure Out What You’re Looking For In A Home
Make sure you have a specific list of what rooms you will use the most and how you’ll use them in your prospective home.
If you like a large master with an ensuite, gas fireplace, and a main floor family room – and they fit within your budget, try to keep that top of mind when looking for and viewing homes. If you start viewing every home on the market, you’ll only get confused as to what you set out to buy. Being specific is much better than viewing 50 homes.
If schools are important then you may have to buy a lesser house to have a prime location and a great school for your kids.
7. Review Home Comparables
Once you find your dream home/condo, your realtor will provide you with sold comparables and advise you on what price to begin the offer process at. They will also advise you as to what conditions such as financing, inspection, lawyer review, and status conditions may be applicable in your offer.
8. Get Ready To Make An Offer
Your realtor will then draw up the offer with price, conditions, deposit, chattels included and excluded, and rental costs that may be applicable such as assuming alarm monitoring or the hot water tank.
9. Negotiating May Need To Happen
In a balanced or buyer market, your realtor will negotiate with the other agent and the seller. The offer may go back and forth several times until a deal has been struck.
In today’s hot market, most of the offers your buyer agent will present contain ‘no conditions’ with your highest price and biggest deposit and with the closing date the seller has requested. You could be one of many offers and putting your best foot forward may gain you a home.
Make sure you do a pre-inspection on your home, have your financing in place, and ensure that your lawyer has reviewed the contents of your offer. Once you have a clean offer, your realtor will present the offer. Keep your fingers crossed that you are the successful bidder!
10. Begin The Closing Stage
When you’ve won the offer, and are now becoming a new home owner, it’s time to contact your lawyer and mortgage broker and send them over your agreement of purchase and sale so they can arrange the mortgage, and the mortgage broker can send the lawyer mortgage instructions for the money to be sent prior to closing. Make sure they have all of the documents and make an appointment with the lawyer for final signing of the transfer of sale.
11. Get Home Insurance
Don’t forget to arrange your home or condo insurance. Your realtor will assist in recommending some exceptional insurance brokers who will guide you through getting the proper insurance to cover your home and contents.
12. Get The Keys And Move In!
If it helps, make a list of what needs to be done before you move and then get excited to move into your new home or condo!
Congratulations on your new home purchase!
