Are you ready to buy a home?
Buying a home is a daunting task, especially for the first-time home buyers. There is usually a long list of items to consider before possession of the house can be taken. However, home buying process can be a stress free experience if you have the right professional by your side. The one who is sincerely working with you to find your dream home. As a buyer, there is no reason for you to be not represented, since in most of the cases, commission for the buyer agent is paid by the seller.
The Simplified Real Estate Process
Figure out how much you can afford. How much cash you need and how much mortgage is the lender willing to advance you. Once you have solid numbers to work with, start the step No. 2.
Determine Your Needs & Wants
What do you want in a house or the neighbourhood? Bedrooms, Bathrooms, Parking, Schools, Transportation, Parking etc. You need a place to start.
Find the Right Home & Make an Offer
There is no perfect home but there is definitely a right home out there for you! Your job is to pick a home you like and my job is to tell you the pros and cons of buying such a home and then it is up to you to make the decision.
Negotiate and Satisfy Conditions
Negotiating is a skill and practice makes it perfect! I have had lot of practice and let's get you a deal! Once we have an accepted offer, let's finalize the financing and/or the home inspection. The house is almost yours.
Wait for Possession Day
Things to do before possession day - get home insurance, open accounts with hydro and the city, mail-forward set-up, change addresses, book a moving company and get ready to move into your dream home!
Buyer Tip #1
Have cash on hand for closing costs, almost 2% of purchase price. Closing costs to consider: land transfer tax, pst on CMHC insurance, lawyer fees, title insurance, home inspection fees, appraisal fees, adjustment for property taxes and utilities etc.
Buyer Tip #2
Pre-approval refers to determining the maximum amount you can afford and at what interest rate. Instead of going to the bank, go to a mortgage broker who have access to many lenders and can help you get the lowest rate possible with one credit search.
Buyer Tip #3
Define What You Need
Make sure you make a list of criteria that you cannot compromise with, known as "must haves". For ex. bedrooms, bathrooms, parking type, proximity to schools etc. Looking at houses that you won't potentially buy will only lead to disappointment and burn out.
Buyer Tip #4
Lenders require certain documents to get pre-approval process started - some of the documents they will need include: notice of assessments for the last two years, employment letter from the current employer, pay stubs for the last two months, downpayment confirmation etc.
Buyer Tip #5
Start Your Search Early
If you plan to buy a home, make sure you start your search early, at least 5-6 months early. On average, it takes about 2-3 months to find a perfect home and another month for closing. Most sellers will however need 2-3 months for possession unless the house is vacant.
Buyer Tip #6
First-Time Home Buyers (FTHB) Credit
The FTHB tax credit offers a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009. For an eligible individual, the credit will provide up to $750 in federal tax relief.
Buyer Tip #7
Take Care of Utilities
Before the possession date, make sure you open new utility accounts for your new property. On possession day, take the pictures of hydro, gas and water meters and call in the reading to Hydro and the city respectively.
Buyer Tip #8
First-time home buyers can withdraw up to $35,000 from a Registered Retirement Savings Plan (RRSP) to purchase or build a home. Generally, the withdrawal must be paid back into RRSP within 15 years.
Buyer Tip #9
Joint Tenants - each person owns the property equally and if one of the owner dies, the property transfers to the existing owner. Tenants in Common - each owner's share could be different. When one of the owner dies, his or her interest is transferred to his or her estate.
Buyer Tip #10
Buyer Beware applies to real estate as much as it applies to anything else. Ask the right questions and do your due diligence before you buy any property.
Buyer Tip #11
Buyer Don't Pay Realtors
Home buyers do not compensate realtors, sellers do. Therefore, work with a real estate agent you can trust to represent your best interest in negotiations.
Buyer Tip #12
Be Open Minded
Be open minded in the search of your home and look at all the available options within your budget in different areas. This will open up your mind to possibilities and help solidify your must haves further.
Buyer Tip #13
Most buyers don't know what their budget can get in the beginning. However, as you see more of what your budget can get, be reasonable with your expectations. There is no perfect home but mostly everything can be changed.
Buyer Tip #14
Buyer Can Withdraw Offer
An offer may generally be withdrawn by the buyer at any time before the seller's acceptance of the offer has been communicated to the buyer.
Buyer Tip #15
Buyers most likely include conditions in the offer that must be met before the offer becomes binding. The most common conditions include financing and home inspection conditions. If the conditions are not met, buyers can terminate the contract and get the deposit back.
Buyer Tip #16
Say Yes On Your Own
When you start you home search, everyone close to you will have an opinion as to what and where you should buy. Nobody knows your needs as well as you do, so consider everyone's opinion but make your own decisions.
Buyer Tip #17
Many buyers are paying over asking for houses in a bidding war on offers date. Buyers must understand the long term consequences of over paying especially if they have to sell the house within 5 years.
Buyer Tip #18
You Know The One
I have seen buyers make a huge list of must haves, however when it comes to buying a home, most buyers just know when they walk in to the right home. It is hard to describe the feeling but goes something like, "You'll just know!". It is so true!