A Guide to Buying Your First Home

1) Choose a REALTOR®

Choose the best real estate sales representative to represent you in finding and purchasing your dream home and sign a Buyer Agency Agreement to work together. It is important to trust your sales representative, as you will be spending a lot of time together and your sales representative will help you with one of the biggest financial commitments you will make.

2) Obtain Financial Pre-Approval

Get pre-approved for a loan before you find the home you want to buy. Benefits include:

▪  You know your price range, Day of Completion costs, and monthly payments up front

▪  You only look at homes within your price range

▪  Your negotiating position with the seller is stronger

▪  Day of Completion on your new home can happen more quickly

3) View Homes and Find “The One!”

After a thorough understanding of your new home needs, you will receive a list of homes that meet most or all of your requirements, and schedule time to visit them. Your real estate sales representative will also help you find homes through:

▪  Online with real estate search sites

▪  For Sale by Owner (FSBO) signs as you drive through neighbourhoods

▪  Open Houses – accompanied by your real estate representative.

▪  New home developments – accompanied by your real estate representative.

4) Make Your Offer

Once you have found your dream home, your Realtor will research market data on the home to help you determine what to offer. You will typically present a written offer to the seller’s sales representative. There may be some negotiation required and the seller may either accept, reject, or counter your offer. When the seller accepts the offer, it becomes a legal contract.

5) Get A Home Inspection and Negotiate Repairs

You will hire a professional home inspector to conduct a thorough inspection of the property and potentially negotiate with the seller to complete any necessary repairs.

6) Final Review of Contract and Close!

The day of completion is the formal process of signing papers, paying fees and day of completion costs, and receiving the keys to your new home!

Funding Your Home Purchase

Three Factors Determining How Much Can You Afford

Qualification for the Mortgage

▪Down Payment

▪Day of Completion Costs

1. Qualification for the Mortgage

Lenders may require that your monthly payments range between 28 – 44% of your monthly income. The percentage will depend on the borrower’s credit rating. Your monthly mortgage payment to the lender will consist of:

▪ Principal on the loan

▪ Interest on the loan

Other monthly costs include: property taxes, homeowner’s insurance and condo fees (if applicable).

2. Down Payment

Most home loans today require an upfront, or down payment. If you are able to pay more upfront, you may be eligible for lower interest rate loans, and shorter loan periods.

3. Day of Completion Costs

Additional fees and costs associated with loan processing and day of completion are required to be paid at the final day of completion, unless you are able to include them in your financing. Typically, day of completion costs amount to between 2 – 5% of the purchase price (not the loan amount).

Making An Offer

Making an Offer

Once you have found the property you want, you and your Realtor will write a purchase agreement. While much of the agreement is standard, there are a few areas that can typically be negotiated:

▪ The Price

What you offer on a property depends on a number of factors including its condition, length of time on the market, buyer activity, and the urgency of the seller. While some buyers want to make a low offer just to see if the seller accepts, this often isn’t a smart choice, because the seller may be insulted and decide not to negotiate at all.

▪ The Move-in Date

If you can be flexible on the possession date, the seller may be more apt to choose your offer over others.

▪ Additional Property

Often, the seller plans on leaving major appliances in the home; however, which items stay or go is often a matter of negotiation. After presenting your offer to the listing sales representative and/or seller, the seller will then do one of the following:

▪ Accept the offer

▪ Reject the offer

▪ Counter the offer with changes

The most common is the counter offer. In these cases, your Realtor’s experience and negotiating skills become powerful in representing your best interests.

When a counter offer is presented, your Realtor will work with you to review each specific area of the offer, making sure that you move forward with your goals in mind and ensuring that the best possible price and terms are negotiated on your behalf.

Day of Completion

▪Closing Day

Closing day is the date set for the completion of your purchase, including the

registration of the deed and/mortgage and the exchange of keys. Day of completion marks the end of your home-buying process and the beginning of your new life!

▪ Own It

A deed is the document that transfers ownership of real estate. Once the funds have been transferred/deposited between you and your lender to the seller (minus any payments and adjustments), the lawyer will register the deed and mortgage on title so that title moves from the seller to you.

▪ What must I do on Closing Day

Not a thing. The lawyers take care of the entire process.

This process can take all day and you should receive your keys in the late afternoon.

Congratulations!

Are you planning on buying or have you already purchased your first home? Let us know in the comments!

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