For most, buying a property will be one of the most significant financial decisions they will make. It can easily be a very emotional journey, especially considering how much is at stake. It may seem potentially daunting and stressful, but it doesn't have to be! Life is a lot easier with the right Realtor by your side and a proper understanding of the buying process.
1. Meet with a Real Estate Professional
Choosing the right Realtor is an important first step. Schedule an appointment with a Realtor and take some time to discuss your preferences along with the buying process. You may need to talk to several Realtors until you find one that really suits your needs and has your best interests in mind.
When you find that Realtor, you may discuss signing a Buyer Representation Agreement with them, which essentially states that they are now working for you and you are now clients to them for a set period of time.
2. Get Pre-Approved
Getting a mortgage pre-approval is an extremely important step that makes the whole buying process that much easier. You can get pre-approval from a traditional lender such as a bank or credit union, or by working with a mortgage broker who acts as the intermediary between you and the lender. A mortgage brokers fees are paid by the lender when your mortgage is signed.
By getting pre-approved before looking at properties, you are given a realistic expectation of what you can afford. However, beware that pre-approved amounts can overestimate what you can actually afford to pay.
3. Start Searching for Homes
There is such a wide range of properties out there with many different features. It will be up to you to decide what it is you're looking for. Perhaps you'd like to be near community centres, malls, schools and recreation areas. Or, do you prefer a more urban, commercial environment with restaurants and nightlife? Also, you must consider style and type of home. If you are looking for a single family detached home, would you also prefer a finished basement?
The length of the home-searching process may take some time and may be even longer and more difficult depending on what it is you are looking for. Almost all properties out there will require some level of compromise so be prepared differentiate between must-haves and wants.
4. Making an Offer/Negotiations
Once you have found a home you wish to purchase, your Realtor will prepare an Agreement of Purchase and Sale, which is a written offer on your behalf. This legal document that is issued by you, the buyer, will contain the terms and conditions desired for purchasing the property. It also contains the price you are offering for home, as well as the date which you wish to take possession.
Once your Realtor has submitted the offer for you, there are several possibilities. The first, being that your offer is accepted. This means that both you and the buyer will sign the confirmation to agree that both parties are privy to the contact. The second possibility is that your offer is rejected. The third possibility would be a counter-offer, in which the seller makes their desired changes to the offer before it is accepted. It is then up to you as the buyer whether or not to accept the counter or negotiate other changes.
This negotiation process can be long and even longer if there are multiple offers on a property by several buyers. However, that is a subject for another time.
5. Fulfill Conditions, If Any
After your offer is accepted, you will have 24 hours to pay the deposit. This amount will be help in trust and counts towards your total payment of the home. Also, you will have to fulfill and conditions set out in your offer by the date specified. Normally buyers will have to finalize their mortgage financing by sending a copy of the offer to their lender. In addition, there may also be an agreement for the buyer to preform a house inspection.
Once all the conditions are met, the offer will be firm, meaning that you as the buyer are prepared and legally obligated to complete the purchase.
The Final Steps
On closing day your lender will provide the mortgage money to your lawyer and your lawyer will then pay the seller. You will then take over possession of the house, receive any keys to the property, and be able to begin your move-in process. How exciting!