Are you in the home buying process? Whether you are a first time home buyer, or maybe you’ve bought a home before but it has been a few years… In this video I am going to through the home buying process, give you several home buying tips and a home buying checklist to make sure the process goes as smoothly as possible for you!
If you are seriously looking to buy a home then just follow these steps and you’ll be cruising like Connor McDavid!
STEP 1 – MORTGAGE PRE-APPROVAL!
Why? Because you can’t go shopping without knowing how much money you have to spend, it is simple! And don’t rely on an app or a quick mortgage calculator! Mortgage rules in Canada have changed a few times over the past few years and not that you won’t be approved but the banks might not lend you as much money as you wanted! Contact a mortgage professional to get a full pre-approval and get them the necessary paperwork! Income tax statements, banks statements, letters of employment, Notice of Assessment etc are just a few items you’ll need to collect!
You are buying a home here not a pair of jeans! If you need to watch my video on the difference between Mortgage approval vs pre-qualifying!
STEP 2 – FIND A REAL ESTATE AGENT THAT YOU LIKE AND FULLY TRUST!
Why? This is the largest financial transaction of your life!! Don’t leave it to someone that you don’t think is fully capable of handling all these important details! Not only do they need to help guide you to find the best home that suits your family and lifestyle, there is contract law, A TON of paperwork, real property reports, title review and the negotiating! You need to ensure that you are not overpaying for the home you like and there is nothing worse than not getting your keys on possession day due to something that was missed!
STEP 3 – DETERMINE WHAT YOU WANT IN YOUR HOME AND WHERE YOU WANT TO BE!
Sit down with your agent to determine the type of home you want to be in (house, townhouse, a low or highrise condo), the area you want to live, # of bedrooms, bathrooms and any features that you’d like! Your agent will enter this into Paragon which is our Realtor website where we can enter the criteria you want and come up with a list of homes that are currently for sale! We can really narrow it down based on your specific requirements. Say you wanted to look at only bungalows, or only homes with walk-out basements, or townhomes or duplexes with a double garage for example. Honestly This can save Weeks of looking at the wrong homes and eliminate tons of frustration!
STEP 4 – START LOOKING AT HOMES!
Once you’ve determined how much of a mortgage you can afford and you have a selection of homes based on your search criteria you can begin looking at homes! Now, This is the fun part and can separate good agents from inexperienced agents! As you walk through homes Your agent should be able to give you information on approximate age of the shingles, what type of windows it has whether they are pvc, wood or aluminum sliders, approximate age of the furnace, the type of water lines running through the house whether they are copper, pex or poly-b (which had issues from early 1980’s to 1990’s), whether the electrical panel is 60 or 100 amp service and if that is copper or aluminum wiring, and then do a tour of the outside to determine if the grading outside the home is good or bad. This is an example of something I saw over the weekend with a buyer of what a home owner should not do (evestrough picture). As soon as I saw this I knew I would find this (pic of mould) – that’s mould and there is going to be more moisture & problems behind that wall! Make sure your agent can point out things like this – you don’t want to spend $500 to $600 for a home inspector to tell you the home needs new windows or a new furnace!
I have heard many stories from home inspectors of cases where the buyers walked away from a home because of something that easily could have been pointed out to them by an experienced agent!
Once you’ve found a nice home and are happy with everything on the inside you can move onto…
STEP 5! MAKE AN OFFER!
Your agent should give you the following information
1 The City assessment! It is not a true value of the home, but gives a ballpark of how much the city thinks it is worth and can sometimes be a good gauge on value!
2 Run a few different COMPARATIVE MARKET ANALYSIS ES on the home – you want to know the amount that other homes in that neighbourhood have sold for and the amount that comparable homes in that area or zone sold for. YOU DO NOT WANT TO OVERPAY!! In real estate you don’t make money when you sell a home you make money when you buy a home! Make sure your agent uses everything they can to fight to get you the absolute best price possible!
3 They should show you the current title! Don’t wait until it gets to the lawyer to find out there is an issue and you can’t move in on the possession day you had agreed to!! You want to make sure there are no leins on title, and that you understand any restrictive covenants and easements that are registered on the title!
STEP 6! YOUR DUE DILIGENCE!
ONCE YOUR OFFER HAS BEEN ACCEPTED BY THE SELLER– you’ve reached an agreement on price, possession day, chattels to be included, any terms of the contract, and the amount of initial and additional deposits your agent will forward the purchase contract, and any addendums or schedules and the highlight sheet to your mortgage professional who will work with the lender to get your mortgage approved. Your agent will stay in contact with them to see if they need an appraisal and they will get that co-ordinated with the sellers agent.
If you are buying a condo – you’ll need to review your condominium documents – if you haven’t – watch my video on condo buying tips and 9 mistakes to avoid – you can pause this and check that one out if you like!
ONLY ONCE YOUR FINANCING IS APPROVED or you are given the go ahead from your mortgage professional DO YOU move onto the home inspection. The licensed home inspector will check out the home from top to bottom and do a very cool infra-red scan of the home to ensure there are no moisture issues. They go up on the roof and look at the shingles, flashing, and chimneys, inside they look at attic insulation, electrical panel, all plumbing, test all outlets, look for any potential issues and give the home an extremely thorough objective look!
Once the home inspection is complete you have 3 options you can take!
1st if everything is good you can accept the home at the price you have negotiated and proceed with your purchase.
2nd if there are some issues with the home you can ask for money off the purchase price. I do not ask for work to be completed by a seller because it can just lead to problems. Don’t ask a seller to repair something – how you want it done will not be the way they did it and will be a nightmare to sort out after the fact.
3rdly if the seller is not willing to give you the amount of money that you want off the purchase price, or there are major issues found during the inspection – you can just walk away from the offer. Your deposit is fully protected and you will get that back in full.
If you walk away you start the process over again and hopefully have better luck the second time. If you remove your conditions – then congratulations you have bought a home! You just need to get your mortgage insurance and utilities hooked up before possession day and I will have a video outlining those steps coming up.
Well that’s it!!! I hope you have found this helpful – if I can answer any questions please reach out to me, I am happy to help!!