The 9 step process
Whether it's your first home, second or third, below is the buying process broken down into 9 steps prepared by Royal Lepage Team Realty. Shamil can guide you through this process in person during a scheduled buying consultation.
MORTGAGE PRE APPROVAL
Obtain a mortgage pre approval through a Mortgage Broker or through a Financial Institution. Establish what you can afford before you start house hunting, how much down payment you need and how much you can afford on a monthly basis.
What you need: Notice of Assessment from previous taxation year, Letter of Employment, T4's, Proof of Down Payment. A written pre approval makes you a cash buyer in the eyes of a seller thus giving you "bargaining power" and a clear advantage over other buyers.
EXTRA COSTS WHEN BUYING A HOME
Down Payment: 5-10% for buyers & 20% for investment properties.
Insurance Premium: Through CMHC or Genworth if downpayment less than 25%
Mortgage fees: Appraisal and application fees etc
Building Inspection: $400-$700* (Approx.)
Legal Fees: May vary $650-$950* (Approx.) + disbursements
Land Transfer Tax: Check for first time rebate
Title Insurance: $300 (Approx.)
* Fees and costs are estimates.
THE BUYER CONSULTATION
Before beginning your home search meet with a Realtor to get professional advice regarding preferred locations, styles, prices, trends, financing and handling the unexpected.
A personal "one on one" buyer consultation will help you decide your needs and wants. It's also good for you to know who represents who in a real estate transaction. If the person showing you the home isn't representing you, they are always representing the seller.
There are many ways to start looking for homes; The MLS system, New Builders, Private Sellers, Brokerage and Exclusive Listings. Your Realtor will set up all appointments for you to see re-sale homes and new homes.
Rather then just using an online search, a Realtor can match you with a home that suits your lifestyle. Things like, being close to top rated schools, your favourite, family members, fitness clubs and other activities.
WHAT PRICE SHOULD I PAY?
Make sure you know what the home is worth. Realtors have the information that you need to know. Your Realtor will prepare a Comparative Market Analysis (CMA) so you will be able to determine how much the home is actually worth.
The CMA will determine today's market value for the home. This will be a combination of similar homes that have sold, similar homes for sale and similar homes that did not sell.
An experienced Realtor will even help you avoid multiple offers and competition through proven strategies.
PREPARING AN OFFER
Price: As per the previously prepared CMA
Deposit: Depends on price of home. Higher the deposit stronger your offer is. Held in Trust Account until closing. Given after removal of conditions.
Conditions: Financing, Inspection, Insurance etc.
Terms: Balance of purchase price, chattels in good working order, final visit before closing etc.
Inclusions: Fridge, Stove, Washer/Dryer etc
Irrevocable: Time the Seller has to accept the Buyer's offer.
Closing Date: When the Buyer can take possession of the home.
SATISFYING THE CONDITIONS
Typically the Buyer has 5 business days (excluding weekends and statutory holidays) to remove their conditions and proceed with the sale.
Financing: The Bank or your Broker will need a copy of the purchase agreement and the listing sheet along with any personal documention previously mentioned.
Inspection: A qualified home inspector whom you choose will inspect the home to identify deficiencies or major structural problems. Other inspections can also include septic inspections, environmental inspections etc.
Lawyer Review: Optional (They will need copies of APS)
FULFILLMENT OF CONDITIONS
A final document called the NOF or the Notice Of Fulfillment needs to be signed and delivered to the Seller within the time frame provided for you in your offer.
Once this document has been executed, your Agent will deliver it to the Seller or the Seller's Agent. Once the Seller has acknowledged receipt of the document you will have bought your new home!
From here your Agent will send all required documents to your appointed lawyer who will subsequently finish the purchasing process until closing.
Time to celebrate! You've just bought a home!
Start packing, arrange movers and start planning what you will need for your new home.