The Home Buying Process
Step 1: Getting Pre-approved for a Mortgage
Once you have decided to purchase a property, you need to speak to a mortgage professional and get pre-approved for a mortgage. Preapproval is a tentative approval from a lender for a mortgage based on your qualifications (i.e. income, amount of down payment, debts) made in advance of your purchase. It does not guarantee you will qualify for a mortgage, as circumstances may change prior to finalizing a mortgage. It is crucial to know how much you qualify for before you begin shopping, so you can focus your time on the properties you can afford. Your mortgage professional will advise you of the documents you need for final approval and may be able to hold the interest rate for you for a period of time. This means if the interest rate goes up, you get the rate that is held. If it goes down, you get the lower rate.
Once you have been pre-approved, have them send a confirmation email to you and your agent.
Step 2: The House Hunt
This is the fun part! We will discuss what you are looking for – we will look at your budget, preferred location, features in the home, size, and any special requirements you may have. I will work with you to find homes that match your budget and wish list, and we will start shopping. It is important to remember that you will not likely find everything on your wish list. This is normal! If you can find a home with 80% of the items on your wish list, that is success for most home buyers.
Your home search criteria may also change during the process – this is normal! Be sure to be flexible and don’t be afraid to pivot.
Step 3: Making an Offer to Purchase
When you find the home that is right for you, it is time to draw up an offer to purchase. This is a contract that that includes:
- Purchase price
- Financing condition
- Property inspection condition
- Condo document review condition (in the event purchasing a condo)
- Possession date (typically 30-60 days away)
- Amount of deposit and possibly the amount of downpayment
- Other relevant terms that are specific to that property
Step 4: A completed Offer to Purchase
If you and the seller come to an agreement and sign the Offer to Purchase, you are now under contract! You then send that contract to your mortgage advisor, and they will get started on the mortgage. You will be required to pay a deposit – generally this is in the form of a bank deposit or some kind of electronic funds transfer. The amount varies, but most times it is between $5,000 and $20,000. It is held in trust by the seller’s brokerage.
Financing Condition - it is now time to go back to your mortgage professional to begin the process of finalizing your mortgage. This is another reason why it’s important to have a pre-approval done, so your mortgage professional has the documents they need to proceed efficiently.
Property inspection - you will need to book a time for a home inspector as well. A home inspection can take up to 3 hours, and the cost is paid by the buyer.
Condo document review - if you are purchasing a condo, I will get the required documentation from the seller’s REALTOR® so you can review the material, or have the material reviewed by a third party specializing in condo document reviews.
You will need to choose a lawyer to handle the closing of your property.
There may be other terms and conditions that have been written into the purchase contract that will need to be addressed during this time as well.
If everything meets your satisfaction and you wish to proceed with the purchase of the property, you will waive conditions, and the sale is firm. If something does not meet with your approval, you can choose to not waive your conditions, and the contract will be cancelled, and your deposit returned.
This is a lot – but don’t worry, I will be helping you the entire way to make sure everything goes smoothly!
Step 5: Planning the Move
With your possession date in mind, it is a good time to start planning your move. Utilities will have to be updated and you may need to book a mover. Your lender may require you to show you have purchased insurance for your new home. Planning these items in advance will reduce stress associated with moving (and make sure you get a date and time that will work for you!)
Step 6: Signing with your Lawyer
Before your possession day you will meet with the lawyer to sign the mortgage documents and review title documents.
Step 7: Possession Day
This is the day you receive keys to your new home! I will arrange to meet you to hand over your keys. Keep in mind that although the time on the purchase contract states possession at noon, sometimes there are delays. If you are arranging a mover or locksmith, you may wish to have them arrive a few hours later in the day.
Step 8: I Have my Keys: Now What?
As a new homeowner things may come up that you are uncertain about. You may always contact myself for help – if I can’t help you, I will know someone that can. Home ownership is a big step, and I am here to help you every step of the way.