So you decided you want to explore your home buying options but aren’t sure where to get started? We all need a roof over our head and buying a home can be overwhelming if you aren’t sure what to expect. Not to worry, help is on the way!
You will need some cash on hand for a downpayment, deposit to put down with the offer, property inspection, lawyer and closing/moving costs. Call around, get quotes from lawyers and home inspection companies so you know how much you’ll need. Make a budget and add 10% for any unexpected costs.
The first step in home buying and before you start looking, it’s a good idea to see if you can qualify for a mortgage. This is called a pre-approval. What that means is a mortgage agent will look at your financials and determine what you can afford. This does not necessarily mean you have been approved for a mortgage. That will come after you put an offer down. You will also need a minimum of 5% of the purchase price as a downpayment. If you don’t have this, there are options such as Project Build to qualify for free non-repayable grants. For help with this step, contact John Antle, TD Canada Trust at 250-212-8512.
Once you know what you can afford, now it’s time to shop! At this point, you can hire a real estate agent. They get paid commission from the seller of the house you buy so it doesn’t cost you-the buyer anything to hire them. Find a Realtor you like and make them work for their money! Tell them what you are looking for and they will compile a list of homes to show you that will meet that criteria. Make sure you know what your getting into. If they tell you that front landscaping is included, that probably means there’s strata fees you have to pay monthly. Your Realtor will ensure you have all the information you require to make an educated decision.
When you find something that suits your lifestyle, you will be ready to make an offer. Your Realtor will have all the paperwork needed. The purchase contract will need to be accompanied by a deposit usually in the form of a cheque. This is usually a small amount $500-$1000. You will have conditions to write into the contract such as “subject the the buyer being approved for a mortgage by no later than Dec 15th, 2011.” or “washer and dryer to be included” and “subject to a house inspection by Dec 15th, 2011″. These conditions will have a date and you will need to either waive or meet the conditions on or before the date. Make sure your Realtor writes down all the conditions in the contract. This is very important! If it’s not in writing it didn’t happen! At this point, there may be some negotiating back and forth between you and the seller. Your Realtor will act on your behalf to get you the best price. You will also decide on a closing date (the day you want to take possession of the property and move in!). You will need a lawyer at this time so your Realtor can fax them the purchase contract.
Once you have an offer that has been accepted by both you and the seller, you now have an accepted offer. This is not a solid contract until all the conditions are removed. Now it’s time to firm up the sale by removing the conditions. If you can’t get approved for your mortgage, not to worry, you can let the condition date lapse and the contract is then dead. You will get your deposit cheque back. It’s not until all the conditions have been met or waived, that it is a firm deal. A firm deal means you have a legal binding contract and can’t back out or you lose your deposit money and there could be other remedies for the seller.
You now have a firm deal! Your lawyer will take care of the rest. Keep in mind, you will need money to pay the lawyer when you go to the lawyer’s office and sign the paperwork. You will also have moving costs and need to set up your utilities who also may want a deposit. Now all you need to do is pack your stuff!
