Like most people, buying a home is the biggest purchase you'll ever make. Regardless if you're a First Time Homebuyer or a seasoned Homeowner looking to make a move, a bit of planning can go a long way to reduce the stress and anxiety associated with buying a home. Once you're mentally prepared to move, your moving blueprint will go a long way to make everything from securing financing, finding a home, getting an offer accepted and finally getting your keys a breeze.
Everything starts with a plan. As a wise person once said, "fail to plan, and you plan to fail".
The big question is, where do you start?
Follow these 10 Steps, and you'll use your time effectively and efficiently; you'll be well ahead of any hidden surprises or hurdles that can crop up along the way.
1. Financial Resources
The biggest question you have to ask yourself is, "what can you afford?" How much money do you currently have for a downpayment, and how much money a month can you comfortably spend on your mortgage payments and property taxes going forward. You will also want to budget for annual home maintenance and repairs. Then, before you put your pencil down, make sure you set aside ample money for closing and moving costs. Always make sure you establish a realistic budget and work diligently to stay within it.
2. Research Financing & Mortgage options
Before you start to view homes, research your mortgage options and determine how much of a mortgage you can obtain. If the amount that you feel comfortable paying out in Step 1 is less than the payments on the maximum mortgage you qualify for, you'll need to ask your mortgage broker to tell you how much of a mortgage, given current rates, that this payment amount will service. Your mortgage professional will tell you the maximum price for a house you can afford to pay. A mortgage pre-approval from your lender will not only give you piece-of-mind, but it will also allow you to be more competitive around the offer table should you find yourself in a competing situation.
3. Choose a Realtor®
Once you've got your finances sorted out, it's time to start looking at homes. Select a Realtor that you feel comfortable with; you'll be working with this person closely. Your Realtor will be helping you select properties to view, negotiating on your behalf and ensuring that all of your documentation is complete. They will be with you from start to finish of your homebuying endeavour.
4. Get a Lawyer
Make sure you select a lawyer who specializes in real estate. A real estate lawyer will handle all of the legalities surrounding your home purchase, making sure you have clear title to your property, prepare your mortgage documents, and finally, handle the exchange of money on closing day.
5. House Hunting
Make a wish list of all the qualities your perfect home would have. Consider your current lifestyle, personal needs and long term plans. Is location important? Do you prefer a particular style of home? Do you need to be near to transit or highway corridors?
6. Making the Offer
When you find a home that fits your budget, one that you can see yourself living in, it's time to make an offer! Your Realtor will prepare all the necessary documentation and review any conditions you might need. The offer will contain the purchase price, deposit amount, closing date and the terms and conditions; in most circumstances, you'll have to submit a "deposit' within 24 hours of acceptance of your offer. Make sure you have these funds in a bank account that you can easily access. Check with your Realtor to find out how much of a deposit is being required by the Sellers. Don't forget to ask your Realtor to include a clause allowing you to view the home additional times prior to closing. For your benefit, make sure this is in writing at the time the offer is accepted.
7. Removing Conditions
A buyer's offer can be conditional on a home inspection, finance approval, appraisal, status certificate, lawyers' approval or anything else that they need to be sure of to proceed forward with purchasing the property. These conditions are usually for the "benefit of the buyer"; however, sometimes, a seller needs to insert conditions and additional terms to the Agreement of Purchase and Sale. An Estate sale may require a probate clause. If the home is sold "conditional on the sale of another buyers property", the Seller will need a condition on being released from a previously accepted Agreement.
The dates and terms of conditions must be respected. Before you submit an offer with any condition in it, make sure you have enough time to fulfil it. Sometimes it's not as easy as it might appear to have a condition date extended. Consult with your Realtor.
8. Finalizing the Deal
Once you've fulfilled any conditions, your Realtor, Mortgage Broker and Lawyer work in sync towards your closing date. Many times your Realtor will forward all the necessary documentation to your Lawyers office and Mortgage Broker. By law, you must also have a "true copy" of all your signed documents.
9. Moving Preparations
There are a lot of things you'll need to do from the time the "Sold" sign goes up on your new home to the time you're picking up the keys. Arranging for movers or a moving truck might be the quickest! If you don't have to be out of your current residence on closing day, resist the urge to move on that day. This exercise in patience can reduce unnecessary expense, stress, and frustration if the Sellers take longer than expected on closing day to vacate the premises. If you must move on the day of closing, arrange for a late afternoon, early evening move in time.
If you rent, you'll need to give your landlord notice. You'll want to contact the utility companies that service the property and arrange your accounts.
Contact your insurance company to arrange for home and contents insurance for your new home. The mortgage company will require your lawyer to provide "Proof of Insurance" on the closing day.
Many Government agencies will need to receive your new mailing address: Drivers License, Vehicle Ownership, Health Card, Social Insurance, Income Tax, Canada Pension. Don't forget to notify your bank and auto insurance company.
10. Closing Day
The closing day is the day you take legal possession of your new home. Your lawyer will finalize your purchase by sending the Sellers lawyer the money, registering your mortgage and transferring title to the property into your name. Once completed, you get the Deed and keys! Congratulations on the purchase of your new home!