Where do you start?
There's nothing more exciting than buying your first home, but exactly where do you start?
The latest numbers show that 80% of all buyers start their home search online. There's no doubt that having a search platform like realtor.ca will really help you get an idea of what's currently on the market, however, we want to share a secret with you: for a variety of reasons, not all Realtors® submit their listings to the Canadian Real Estate Association (CREA) for distribution on realtor.ca. According to CREA, about 50-60% of listings are displayed on their site.
How the MLS® system works in Canada.
MLS® is a trademark of CREA and to use the MLS service, a Realtor® must be a member of a local Realtor® Association. Each Association has their own MLS® system along with rules for their members when it comes to using that specific MLS® system. ie) The Toronto Regional Real Estate Board (TRREB) requires metric measurements on their listings-Realtors® Association of Hamilton-Burlington requires imperial measurements. Some Boards/Associations have restrictions on the number and type of pictures that can be displayed. Each Board/Association has a data feed for it's "active" listings to the CREA data distribution facility and listings that are permitted to be displayed end up on realtor.ca. Once the listing is sold, the data disappears.
Realtors® also have the ability to share listing information with other members to use on their individual websites by using an Internet Data Exchange aka IDX. Once again, this requires a "permission to share".
Your local Realtor®
There is definitely one place where you can find almost 100% of the homes that are the market and that's your local Realtor®. We say "almost" 100% because there are always properties that are listed exclusively or privately and on occasion, you'll come across a listing that's listed solely thru another Association. Even if the listing isn't appearing on the local MLS®, a trained Realtor® usually knows exactly where to look for it by it's unique MLS® number. ie) RAHB listings always start with an "H". TRREB listings have an X or C and many other Associations are just a number ie) 337873. A "local" Realtor® will not only be able to provide you with the most up to date listing information and activity, they also know the City and/or area that you're buying in. Just as Provincial Associations like the Ontario Real Estate Association keep all Realtors® in Ontario up to date with Provincial regulations, each Association works hard keeping their individual Realtors® up to date with changes to Municipal Regulations that have an impact on local property owners.
Comprehensive & detailed local searches
MLS® systems are complex by nature, after all, they're designed to collect and dispurse listing data. They're programmed to deal with not only the Realtor® but the Realtors® clients usually by way of a Client Portal.
There are many MLS® platforms worldwide. In the Southern Ontario area you'll come across two- STRATUS (used by TRREB) and MATRIX (used by all the other local Associations/Boards)
Regardless of the system, the Realtor® determines a search criteria based on the parameters their client needs and then sets up the program to forward the results of the search to their Client asap (as soon as it's listed) or by daily/weekly digests. On the MATRIX system, if a Client "likes" a certain listing they'll receive updates including the price it sold for once it's "Sold" on the system.
Deciding how much you can afford
The first thing you need to do is get "fully" preapproved for a mortgage. This is not a simple process and a lot of Bankers and Mortgage Broker's stop short of a full approval.
A full pre-approval will involve supplying the Mortgage Broker with your Notice of Assessments, T4's, Letter of Employment and authorization for a credit check. If you're going to be receiving funds as a "gift" from parents, you'll need to make sure that the funds are in your account for the required length of time. There might also be time constraints if you're using funds from your RRSP or if you're applying for the Federal Homebuyers program.
Once your Mortgage advisor has told you exactly how much you are approved for and for how long they can lock your approved interest rate in for, it's time to start shopping!
Selecting a Realtor®
If you look around, you'll find there's no shortage of people who have an active real estate license that's why referrals from friends and family are always a great place to start. There's absolutely nothing wrong with choosing a Realtor® who's just started in the business as long as you're satisfied with the service they can provide. A new Realtor® might be able to provide you with more attention than one who's juggling many buyers and sellers. Even though a person may be relatively new in the business they might have indepth real estate knowlege for your geographical area that will benefit you. Just because a Realtor® is high profile or ultra busy doens't mean they're going to be a good fit with you.
Regardless who you decide to work with, it's important that you feel comfortable with them and never feel rushed in the home buying process. You need to feel fully confident in their knowledge level and abilities to protect your interests. Buying a home is usually the largest purchase you will make in your lifetime, so make sure you use the services of a Realtor® who is selling you a "Home"...and not just viewing you as "another" sale.
Time to start shopping!
Once you have your mortgage pre-approval in hand and selected a Realtor® it's time to get serious about find a home. First time homebuyers often find themselves with champaign taste on a beer budget. To ease this shock, it's not a bad idea to select what the 3 most important things are for you.
||# of Bedrooms
|# of Bathrooms
||Type of house- detached/semi detached/townhouse/apartment/trailer
||Type of ownership- Freehold or Condominium
||Needs some TLC
||Needs alot of TLC
Don't hesitate to re-examine your list. Many first time homebuyers quickly decide that they need to adjust their home buying expectations. The key is to find a house that you can not only afford, but one that you can feel happy calling "home"!
Time to Buy!
Once you've found a home, it's time submit an offer. Your Realtor® will guide you through all the necesary paperwork with ease. Even though you're already pre-approved for your mortgage, your Realtor may still advise that you make the offer conditional of Financing to allow enough time for the Bank to appraise the property.