Dec. 23, 2019
Buying a home is one of the biggest purchases of your life, and it's so important to have all of your bases covered! I've put together this fool-proof list of what to consider when buying a house. Whether it's your first or fifth home, this list will help you to think critically and make the correct choices.
Step 1: Priorities First
Neighbourhood | Lifestyle | House Considerations:
Before you begin putting pen to paper in building your list of dream homes, stop and
consider your motivations and lifestyle needs. Here are a few key considerations to
incorporate into your home search:
○ Schools in the area
○ Nearby amenities
○ Style of house
○ Proximity to recreation
○ Identify what your home needs to fit your lifestyle
○ What are your current needs and will the house grow with you?
○ What is your buying intention? Long term real estate plan, income property, flip?
○ Daily commute
○ Neighbourhood demographic. Are you looking for an adult or family-oriented community?
Identify your needs vs. wants:
It’s easy to get caught up in the excitement of house hunting. Identifying your needs from
your wants will give you a greater sense of clarity and help with staying on budget,
limiting house hunting frustration and disappointment.
A NEED is something you must have when purchasing a home.
A WANT is something you can easily add or change to the home in the future.
Get clear on your financial health:
Create a savings plan and budget to save up a down payment. I highly recommend that you download Mint app as a tracker tool to help with budgeting/saving. The minimum downpayment in Canada is 5%;
however, anything under 20% requires mortgage default insurance. You should also take into consideration the additional costs that come with buying a house.
Before you start shopping around for a lender, order a copy of your credit score. Knowing your credit score in advance will help you better prepare, whether that is saving up a larger down payment or taking measures to improve or build your credit before going through the application process.
To get an accurate credit report order it through Equifax Canada or TransUnion
Canada, they both offer different information to help you on your way to financial peace
Talk to a financial planner and get pre-approved:
Get your mortgage pre approval from your bank or mortgage broker. This can be a long process so the earlier you start, the better prepared you will be. What is the difference between a mortgage broker and a bank? A bank can only apply for a mortgage with the bank they are associated with. Whereas a
mortgage broker works with multiple lenders to ensure you are getting the best rate.
If receiving money from family, make sure you have a paper trail or money has been in
your account for 3 months minimum. Tip: within 3 months of planning to purchase, do
not make large purchases, keep your bank statements looking clean. If you are
self-employed, make sure you have consistent earnings and two years notice of
Picking the right real estate agent:
Pick a realtor that you feel understands your needs and wants. Have a buyer
consultation with 3 agents and pick the one you feel is right for you.
Step 2: Starting the Search
Have your private client search set up so you receive all new listings. The search is
specific to your criteria and can be changed at any time
Once you have established a list of potential homes, take a drive by the house and get a
feel for the neighbourhood. Pictures and listing descriptions don't always tell the full story.
You may fall in love with the first home you view or it might take twenty; however, when
you find the right home you will know.
Writing an offer:
Once you have found the right home, it is time to write an offer.
After you have an accepted offer, it is now time to make sure the terms and conditions of
the contract are met before subject removal. Depending on the contract, your deposit
may be due shortly after acceptance or after subject removal. This step includes booking
an inspection if needed, sending your bank a copy of the accepted offer for financing
and reviewing title and any other documents to ensure you have done your due diligence.
*(Typical terms include: Financing, Inspection, Title, PDS, Due Diligence, Deposit, Insurance).
Once you are satisfied with the terms of the contract and have financing approved, we
can remove subjects! With subjects removed, the property you have purchased in now
considered sold and the deal is firm and legally binding. If you are renting this is the time
to give notice of your move. Book movers and a cleaner.
With the contract now firm it is time to prepare for completion. Approximately 3-5 business days
before completion meet with your lawyer or notary to sign documents. Prepare bank
draft for amount to be provided by notary/lawyer. Make sure utilities are transferred and
set up in your name for the day of completion on your new home.
Possession day is the day you get the keys and can take physical ownership of the
property. Possession may be the same day as completion of the following day,
depending on what is written in the contract.
Step 3: Relax and enjoy your new home
Time to celebrate, invite your friends and family and unpack and relax.