6 Steps to Home Buying
To say the least, there's A LOT involved in the process of home buying. However, that should never intimidate or scare you out of finding your dream home. This step by step guide will provide you with the direction you need, from beginning to close:
1. Find Your Mortgage Specialist
Initially, you'll want to do some research regarding local mortgage specialists or brokers. You'll need to secure a pre-approval from the bank for your future mortgage. You'll also need to prepare to have a minimum down payment of 5% of the purchase price of the home you choose to buy. The Canadian Mortgage & Housing Corporation (CMHC) charges an insurer fee, but this can be waived for a 20% downpayment.
2. Find Your Realtor
Once you are pre-approved you can start looking for a Realtor®. This is the licensed professional who will assist you through the remainder of the home-buying process. More of your own research will be required in order to find the right one for you. Search online, but also ask around locally. When you choose to meet with one, be prepared to have an honest discussion about your wants, needs, and price range. You should have a good rapport with the realtor® you select, and it should be palpable that they genuinely have your best interests in mind. Don't settle. Shop around for the best agent, and be aware that some specialize in certain areas of the industry (relocation, investment properties, etc.). Also note that any agent can show you any home on the market, even if it's not listed with them, and this is of no cost to you.
3. Find Your Home
Your realtor® will use a centralized online system to find ideal listings for you before they hit the market. This is the "House Hunting" step. Expect to visit homes and neighbourhoods over the course of one or several trips, depending on your circumstances. Follow the guidance of your trusted agent, but come to viewings prepared. Have your phone/camera ready to take pictures and recordings. Take the time to investigate the property and note anything that cannot be renovated or altered. Bring an essential checklist and perhaps a notepad. Never be afraid to arrange for a second viewing if you need it.
4. Place Your Offer
Only when you find a property that truly resonates should you then consider purchasing it. If you are confident you have found such a property, prepare to place an offer; the price, closing date, and all terms and conditions of the purchase will be negotiated. If the seller accepts your offer, a home inspection of the property will need to be performed by a licensed inspector. The buyer always covers the cost of the home inspector, approximately $500 to $800 (your agent will help you find one). The offer will always be conditional to the results of the inspection. A water test and/or radon test may be required depending upon the home. Once a thorough inspection has been completed the inspector will notify you of any deficits or failings.
5. Find Your Lawyer
If all conditions have been met you'll need to hire a lawyer to represent you as the buyer of the home, to finalize and legally close the deal. As always, your realtor® should be able to point you in the right direction, but don't forget to complete your own research before making a selection. You'll also need to call all providers to update your place of address. You should expect legal fees, as well as disbursements such as a 'Regristration of Transfer', 'Registration of Mortagage', a 'Land Transfer Fee' (1% of the purchase price), 'Title Insurance', and others during this step.
6. Close the Deal
Please note that you will be visiting the property again with your realtor® one day prior to closing. This is what's known as a 'pre-closing visit'; you'll be doing one final walkthrough of the home to ensure everything has remained the way you agreed to purchase it. Following a successful pre-closing visit, advise your lawyer that you would like to close the deal. Your lawyer will take care of all legal documents and bank matters for you, while your agent can connect you with professional moving services. Do plan to move in after closing day however, to ensure enough time for the deal to close.