The Home Buyer's Guide:
9 Steps to Buying Your Home
Why Buy? Buying a home is a very big decision, and one that needs to be thought out very carefully. It's not only a progression in your life; it's also an investment that, if handled carefully, can give you and your family financial security. Deciding to move is often an exciting time, but can also be stressful, so take some time to think things through.
Make A List, Check It Twice Buying a home is very much like buying any other commodity: finding the right one will depend on your budget, needs, lifestyle, and preferences. Determine, based on this criteria, what type and style of home you'd like. Do a preliminary research into the neighbourhoods that interest you, and see if they offer the type of housing that you're looking for, and if it is within your budget.
Get Pre-Qualified Getting pre-qualified before you've even started looking seems premature, but it will prevent disappointment and hassle in the long run. It is always a good idea to know what your budget is, and getting pre-qualified will give you the security that you are able to get a mortgage. If you're a first-time homebuyer, finding out what kind of mortgage you can afford is critical. Leaving the mortgage details to the very end can force you to scramble for financing, and may cause you to lose the home you wanted.
Get the Down Payment The minimum down payment amount may vary, but it's a good rule of thumb to remember that the home buying process involves other costs, including emergency funding, that arise as you go through the purchase. With this in mind, all that you have saved isn't necessarily all that you want to use as a down payment.
Find the Right Lender and Get Pre-Approved After you've considered how much you want to put down as a down payment, the next step is to contact a bank or mortgage broker to get qualified. Your income, debt and asset amounts, and other factors such as credit rating, will determine if you can receive a pre-approved mortgage. This includes a set interest rate commitment for a predetermined amount of time. There are several mortgage options that suit different type of lifestyles, so it's important to ensure that your lender understands your needs to get the best mortgage plan for you.
Find the Right Agent and Start Looking Location. That's the first thing you need to consider when you decide to hire an agent. A good agent should be knowledgeable about the location(s) that you've optioned. These include sales, current listings, and house prices. As with any job position, you should interview several agents before deciding on one. Ask friends and family for referrals. Because this is such an important and extensive process, choose someone who you feel at ease with. Visit several homes with the agent to make sure that the agent knows exactly what you like. This way, the agent won't waste your time recommending homes that don't match your criteria. Remember: hiring an agent costs you nothing, they are paid by the seller.
Make An Offer Before making an offer, you and your real estate agent should do some research. Find out how long the property has been on the market, how much the other homes in the area have sold for, and why the vendor is selling. Sometimes the vendor needs to sell his/her property before their new home closes, or it's a job-related relocation issue. In these situations, the vendor is often looking for quick and neat closing, and you can use that to your advantage.
A good agent is also an experienced negotiator, and will usually be able to read how flexible the seller is to get you the best deal possible.
In many cases, once a bid is accepted, you will be required to make a deposit and sign a conditional offer. Conditional offers vary depending on the unique situations of the buyer or seller. For instance, the sale may be conditional upon the buyer getting adequate financing or on buyer closing the sale of his/her existing home. Before closing a deal, it is recommended that you conduct a proper home inspection by a licensed professional to look for any major problems in the house.
Once these conditions are satisfactorily met, the offer is firm and binding. If they are not met, the deal is off and your deposit is returned.
Find the Right Lawyer The search for the right lawyer should begin before any deals are struck so that you have some expert advice on the offer before committing to anything. The right lawyer will be a real estate specialist who can walk you through the legalities of the home buying process. As with real estate agents, referrals are a good indication of professionalism and expertise. Ask friends and family for any exceptional recommendations.
Close the Transaction Closing the transaction will undoubtedly bring about some extra expenses. These can include legal fees, land transfer taxes, title insurance, disbursements, adjustments, and insurance policies, just to name a few. For resale homes, these expenses can easily add up to 1.5 to 2% of the basic purchase price; for brand new homes, these figures can easily reach 2.5%. A good real estate agent will warn you about these fees, and others that may arise, ahead of time so that you are prepared for a smooth and worry-free closing.
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Copyright 2003. Michael A. Reis, Coldwell Banker Platinum Realty Services, Canada. All Coldwell Banker offices are independently owned and operated. Powered by Look Communications Inc. and compiled by The Corporate Ninja.
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Buying a home is very much like buying any other commodity: finding the right one will depend on your budget, needs, lifestyle, and preferences. Determine, based on this criteria, what type and style of home you'd like. Do a preliminary research into the neighbourhoods that interest you, and see if they offer the type of housing that you're looking for, and if it is within your budget.
Location. That's the first thing you need to consider when you decide to hire an agent. A good agent should be knowledgeable about the location(s) that you've optioned. These include sales, current listings, and house prices. As with any job position, you should interview several agents before deciding on one. Ask friends and family for referrals. Because this is such an important and extensive process, choose someone who you feel at ease with. Visit several homes with the agent to make sure that the agent knows exactly what you like. This way, the agent won't waste your time recommending homes that don't match your criteria. Remember: hiring an agent costs you nothing, they are paid by the seller.
Closing the transaction will undoubtedly bring about some extra expenses. These can include legal fees, land transfer taxes, title insurance, disbursements, adjustments, and insurance policies, just to name a few. For resale homes, these expenses can easily add up to 1.5 to 2% of the basic purchase price; for brand new homes, these figures can easily reach 2.5%. A good real estate agent will warn you about these fees, and others that may arise, ahead of time so that you are prepared for a smooth and worry-free closing.