This might sound familiar, but it’s not quite that easy! Before you do anything with that hard earned cash, here are a few words of caution. The absolute first thing you need to do is meet with a mortgage broker. Let them guide you, especially with the tightening of the lending rules these days to ensure that your dream home is in line with your budget and obviously in line with what a bank will provide in a mortgage. This first step is crucial when it comes to purchasing a home whether it be your first, third or fifth. It’s always important to ensure you have a solid understanding of where you stand financially before shopping around.
"Yippee I’ve got money in my wallet and I’m going to go shopping for a house!"
So what does the bank need from you to get the ball rolling? A pre-approval means that you have chatted with a mortgage broker and said I’d like to go out and buy a house. They will ask you a few questions but by me no means does this mean that you have been approved. When you have an accepted offer it is at this time they’re going to want to know more detailed information. The bank will likely ask you for your notice of assessment, letters of employment, the application may also ask for any car payments or outstanding student loans – essentially the debt you carry will be taken into consideration. At that time they are then going to be able to ensure that the property is also mortgageable so we really do emphasize that before you go out shopping, you have your ducks in row. There’s nothing worse than the disappointment of buying a property or expecting to buy a property and not be able to get the financing. So now you have your preapproval in hand, what do you do next?
The best thing,first and foremost, is select a realtor in the area of your choice where you would like to live and set up an appointment to meet with that realtor in their office. Interview them just like they will interview you! It is important that you feel comfortable with them and confident that they have your best interest at heart. That realtor should be asking you questions! I.e. ‘Were would you like to live? Why do you want to live there? Do you have children? Will your children be going to public or Catholic school? Do you want to walk downstairs or around the corner and grab a latte? Is the commute important for you? Do you need to be close to the highways? Are you crossing the city? Is time important for you to have access to toll highways? Do you want to be home at 5 o’clock for dinner? There are lots of questions that the realtor should be asking to ensure they have a good feel for your needs, wants and more importantly, who you are!
These are all important questions that a knowledgeable and attentive agent will ask when they sit down and meet with you at their office. Sure you can have a realtor meet you at the end of the driveway open the front door and say do you want to buy it but in my opinion that is an agent looking to line their pockets. We want to be sure that you are in the care of a realtor who is going to take care of you from start all the way through to finish.
So what else do you need to know about buying a house? There are conditions that you should entertain, in the right market of course, to protect you. The first is the financing condition. This condition is usually five days and that would be business days. This is the time for you to meet with your mortgage broker with offer in hand to now get that approval. Remember, banks are conducting appraisals these days. The other most commonly used condition is the home inspection and again, this is a condition that is there to protect you to educate you about the home that you are looking to purchase. Home inspections generally cost $400-800 and represent a contract between you, the buyer, and the home inspector. Knowledge will only help you to make a firm buying decision. Make sure that these conditions are explained to you so you understand how they work and why they are being included in your offer to purchase.
There are a few other important points to go over. The deposit is held in trust account of the listing brokerage and that is there until the final closing. A deposit basically tells the seller how serious you are about buying their home and strength is given when you bring a certified deposit check. You have 24 hours from the acceptance of the offer to produce the deposit cheque. I strongly recommend that it be certified or a bank draft. The other important part of the offer is the closing date. This is the day that you will take possession of your property.
We cannot close Real Estate on weekends or stat holidays so ensure that is a day that will work with your schedule. Next are the items that will remain in the home for your purchase i.e. appliances, window coverings, electric light fixtures, furnace, air conditioner (make sure to know if any are rentals) anything that is movable or removable. You definitely want these items clearly stated on the offer. Any exclusions you want the realtor to ensure they go over with you so there are no surprises when you get your keys and find that what you thought was going to remain in the property isn’t there.You will need a lawyer for the closing. Title insurance is also required. Depending on where you are purchasing there is land transfer tax too. All of these should be duly noted in a realtors booklet to assist you in buying a home.
Remember to ask questions and think of this as a lifelong purchase. After all it’s not groceries you’re buying….it’s a dream come true! Make it a memorable one and choose a realtor who will help make it happen.