Buying your first home? Here are the steps to buying a home.
Buying your first home? Here are the steps to buying a home.
I have tried to highlight most of the steps required and involved in purchasing a home. This is intended to prepare and expose first time buyers to most of the things they should be prepared to do when purchasing. The steps however, are not exhaustive, and every situation is different so I would recommend that one has a professional mortgage broker and realtor with you every step of the way to guide and advise. OK, here we go:
- Determine how much you can afford / how much you want to spend each month on housing. Based on income and any existing debt, I will determine how much the banks will allow you to borrow for the purchase of your new home. I will also be able to recommend an appropriate purchase price range that you should be looking in so that your search can be more focused and efficient.
- Enlist a good real estate agent. A good real estate agent that will help you search for your dream home is an important piece in the home buying process. The best real estate agent will be a combination of a personal advisor, consultant, and negotiator. This expert will not only show you homes that match your criteria but will also help guide you through the home buying process.
- Make an offer. When you have found the place that you would like to call your own, your real estate agent will help you draw up an Offer to Purchase to present to the seller. This legal document specifies the price, the subject removal date, the closing date, and any conditions that are important to you and your specific situation.
- Get the mortgage approved. With a copy of the signed Offer to Purchase and the necessary financial information, the process of having the entire deal formally approved can begin. The lender will qualify both you the client as well as the property. The bank and insurance company want to make sure you are purchasing a property that is in good, long term condition. Mortgage insurance provides qualified applicants the ability to buy a home with a down payment as little as 5% of the purchase price.
- Arrange for a home inspection and/or an appraisal. Many buyers consider including a home inspection as one of the conditions in their Offer to Purchase. A professional inspection is a good way to uncover any potential concerns or issues with the home. If the inspection does reveal any problems it may be an opportunity to adjust the offer or potentially withdraw the offer altogether. An appraisal may be required by the bank in the absence of mortgage insurance as the bank requires an independent third party to value the home and property. One may also be interested in an appraisal for their own reference as it lays out the value and condition of the property, in addition to comparing it against recent, similar sales in the area.
- Retain a solicitor (lawyer or notary). It is important to hire a solicitor who specializes in real estate. You could find yourself in a bidding war for the home and may want a solicitor to look over your offer to purchase before you submit.
- Get property insurance. Apart from the mortgage, you will need to purchase property insurance that protects your home against fire and other damages. Once you have a policy in place, forward a copy to your lawyer and your lender.
- Check the legal details. With the deal finalized and the financing in place, your solicitor can now search the title and check whether there are any unpaid property taxes outstanding. Your solicitor can also arrange for a survey or title insurance if necessary.
- Complete the paperwork. A few days before your deal is set to close you will arrange a meeting with your solicitor to review, sign, and get copies of all the documentation. At this time you will also provide the remainder of your down payment, pay legal fees, and any additional costs, such as prepaid utility expenses for which the seller should be reimbursed, that are due on closing.
- Pick up the keys. On the closing day, your solicitor and the seller’s solicitor will exchange documents and funds. Your solicitor will also register your new home in your name. When these tasks are complete, you will get the deed and keys to your new home.
For further information on any of the above steps please feel free to contact me at any time.
(604) 603-2520 | Maury@MauryLum.com | www.MauryLum.com |
