If you’re here, that means you’re thinking about buying a house. Whether you’re a first time home buyer or a seasoned veteran of the housing market, chances are you’ll be going through a similar process. Don’t worry- we’re here to help you understand and properly navigate the buyer’s journey! Understanding the steps that you will take in this journey is one of the best ways to prepare yourself to buy a new home. Read on to discover more about the home buying process!
In this article…
- Mortgage pre-approval
- What a buyer agent will do for you
- To consider when viewing a property
- After your offer is accepted
- Closing costs
Before you start the search for your new home, it’s important to get mortgage pre-approval. Most sellers will expect you to have pre-approval: it distinguishes you as a serious buyer. In fact, they may not want to negotiate with a buyer who has no proof that they can obtain the necessary financing.
In order to be pre-approved, you will go through a formal process with your lender. You will need to fill out a mortgage application, and provide necessary documentation so that the lender can thoroughly evaluate your financial situation. Remember that you shouldn’t just go with the first lender you find- many people choose to shop around for a mortgage with the rates that work for them!
The pre-approval process will typically take a few days, at which point your lender will provide you with a conditional commitment for how much they are willing to lend you. Often, they will also let you know what interest rate they would charge you. Getting pre-approval is an important first step, and allows you to start looking for a home that is within your price range.
What a Buyer Agent will do for You
Having a good buyer agent on your side will make buying a house easy. A good buyer agent will help you by:
- Working closely with you to determine exactly what kind of property you are looking for
- Conducting extensive market research to locate all properties that match your criteria
- Arranging showings to fit conveniently into your schedule
- Accompanying you to showings to provide expert advice and assistance
- Evaluating the need to obtain the assistance of other professionals (ex: lawyers, home inspectors, etc)
- Working to protect your interests at the time of buying, and providing advice on matters that may help protect your interests down the road (such as neighbourhood influences and build quality)
- Assisting you in evaluating housing market conditions in order to determine your best negotiating position
- Drafting offers following your instructions, carefully including any terms necessary for protecting your best interests
- Handling the submission of any necessary documents to your lawyer in order to close in a timely fashion
- Providing any and all additional assistance that may be required to help your home buying process go smoothly, and to ensure you are completely satisfied with your home purchase
To Consider When Viewing a Property
There are a lot of things you should keep in mind when you are viewing a new property! Most of the time when you are viewing a home, it will be perfectly “show ready.” This list will help you keep track of important priorities, so that you don’t make a decision based off how beautifully the home is staged.
- Does this home have all of the features that you need? Does it have all or some of the features that you want?
- Is there enough space? Do you anticipate having more children, or older relatives that may need to move in with you in the near future?
- What neighbourhood is the property in? Is it a good fit for you and your family?
- What are the local schools, and are you satisfied with them? Would it be necessary for you to change school boards? (Waterloo Region School Finder)
- Are there any repairs you would need to do within the first year? Other repairs that are necessary within the next 5 years? How much might they cost?
- What is the commute like? How long is it and will you be taking particularly busy roads?
- Does this property have any of the features that you disliked about your past home? If so, can they be fixed or improved?
- What are the nearby amenities? Groceries, parks, etc?
After your Offer is Accepted
Once your offer is accepted, it’s time to start working on the conditions. Chances are, you will have several conditions to satisfy before the Agreement of Purchase and Sale can be considered “firm and binding.“
Firstly, your agreement of Purchase and Sale can be forwarded to your mortgage lender/broker so that they can begin finalizing the details of your mortgage. Once this process has been completed and they have approved the deal, you can remove the financing condition from the agreement.
Your offer may also be conditional on the sale of your current home. If this is the case, you may need to keep the “Sale of Buyer’s Property” clause in until the sale of your home has firmed up. Once all conditions have been removed from your own home sale, you can remove this clause.
Getting a home inspection is another common condition of home buying agreements. Once you book an inspection with the company of your choice, your buyer agent will accompany you to ensure nothing is overlooked, and answer any questions you may have overlooked. Once the inspection is complete, you will have valuable information regarding the condition of the home you are purchasing.
If you have any other conditions on your offer for a particular home, your buyer agent will help you satisfy them. Once all of these conditions have been removed, your Agreement of Purchase and Sale can be considered “firm and binding.”
While closing costs will always vary, it’s good to be aware that there will be additional costs associated with buying a home. Here are a few to keep in mind:
- Legal fees & disbursements
- Home inspection
- Title insurance
- Property tax adjustments
- Ontario land transfer tax
- Moving costs
Final Tips on Buying a House
Buying a new home can seem like a daunting task. With the help of a good REALTOR, it doesn’t have to be! Real estate professionals can help you find properties that meet your criteria, ensure that you pay a reasonable market price, and keep the home buying journal as smooth as possible. If you have any other questions related to buying a house, we would love to help you! Get in touch with us today to learn more about the process of buying a house.