Preparing to Buy Your Home
Steps to Making Your Home Purchase a Great Experience
Buying a home should be an enjoyable experience if you do it right. The key is to follow a methodical process and proven approach. Below are my suggested sequential steps to buying a home so it’s a great experience for you:
Understand why you are wanting to buy a home.
It may sound odd but make sure you’re happy with your rationale for wanting to buy. Buying a home is, for most people, a big investment.
Figure out what you are comfortable spending on a home.
Assuming you need financing, the first question is how much are banks willing to lend you? The logical place to start is with your banker. To get an idea check out “How Much Can You Afford”. Understanding how much you can comfortably spend drives what home options work best for you.
Talk to at least one independent mortgage broker.
An independent mortgage broker will typically offer you more options and usually more competitive terms/rates than a chartered bank. The savings can be substantial. If you need a few names of some very reputable and quality mortgage brokers I can provide – just contact me.
Make sure you have an up to date and clean credit score.
Many people don’t think twice about their credit rating but it’s a key determinant of the interest rate that’ll be charged. When you are talking with your banker or a mortgage broker ask them to check your credit score and see if it can be optimized. The interest savings can be substantial.
Figure out what you want and need in your home.
There are numerous facets to this exercise. For example:
- Type of home? House, apartment, townhouse, row house, other.
- Size of home? Advice: Err on the side of too big vs too small.
- Age of home? New build versus re-sale home.
- Which communities/neighborhoods do you like?
- Fixer upper vs fully renovated? Do you enjoy home reno projects?
- Big lot vs no lot? Is space/privacy important to you?
- Does condominium ownership fit with your needs/wants?
- What amenities/conveniences are essential to you?
Your purchase budget will, in large part, dictate the options available to you. That said, you should spend some time researching, exploring and flushing out answers to the questions above. This stage is also a great time to talk with a realtor as we deal with these types of questions on a daily basis.
Find a realtor to work with and start building your team.
Your objective is to find a realtor you like, trust and are comfortable working with. This person will be your trusted advisor as you go through the home buying process. A good realtor should be a great resource in terms of guiding you through the buying process and helping you figure what works best for you. As well, good realtors can help you build the team of experts (ie: mortgage specialist, lawyer, property inspector..) that you will need in your purchase journey.
Get pre-qualified (pre-approved) for a mortgage.
Obtaining a mortgage pre-approval is free and does not commit you to a lender. A pre-approval is a commitment “in principle” from a lender that indicates the maximum you can borrow, the associated monthly payment and the applicable interest rate that the lender will hold for 60-120 days. Most importantly, if/when you decide to buy, most of the paper work has already been completed. As a buyer you are in a strong position to compete with any great buying opportunities that come your way.
Start Looking at Properties.
Once you have a good idea about what you want in your next home and what you can comfortably afford, I set you up on a professional search. I email you every listing that fits with what you are looking for as they new homes hit the market. You’ll preview properties online to start with. When you find properties of interest, I will book private viewings for you. Eventually you will find a home that you are really happy with.
Prepare an offer and negotiate the best deal possible.
Once you’ve found your dream home that fits your needs/wants, it’s time to prepare an offer. An offer kicks off the negotiation process. Before submitting an offer it’s imperative to understand the current market value of the property and to come up with an effective negotiating strategy.
You’ve signed a conditional purchase contract.
Most purchase contracts are subject to buyer conditions. The most common conditions include: a) financing, b) home inspection, c) condominium documentation review. The buyer typically has 1-2 weeks to work through all their conditions. If/when conditions have been waived, the purchase contract is “firm” and fully binding.
Prepare for the closing date.
Closing date is also called “Completion Date” or “Possession Date”. This is the day you get the keys to your new home. Leading up to closing date, there are some things that need to be completed:
- Meet with your lawyer to review closing items and adjustments (usually within 1-2 weeks of closing).
- Notify utilities and other providers of your new address (provide lots of notice).
- Start packing down the stuff you want to move.
- Donate, sell or dispose of items you don’t want anymore.
- Have your mail forwarded to your new address.
- If possible, schedule the movers 1-2 days after closing date.
If you follow these steps in your home purchase journey, it should be a fun and exciting experience, not a stressful one.