BUYING

Buying Real Estate? 14 Steps to Follow to become a Happy Home Owner

It is said that buying real estate is the single biggest purchase a person will make in their lifetime. If you are planning on purchasing a home, then you are at the right place! Use our guide to make your home hunting experience stress-free and enjoyable.

1. Set Your Budget

The first step to buying a home (or buying anything for that matter) is to determine what your budget will be. In other words, how much are you able to have as your maximum budget? Variables such as income, household debt, and credit score will influence what your budget may look like, so it is important to seek professional advice to assist with this step of the process. 

Buyer's Tip: Remember to factor in all recurring expenses such as credit card, utilities and living expenses, and investment allotments such as RRSPs and savings for a rainy day. 

Counting Coins

2. Start searching properties

Based on your established budget, you can now make a list of parameters of what you need and want in a home. You will want to narrow down which locations and neighbourhoods might suit you, the  type of home you would like, and even how soon you want to be moved into your new home. 

Home search tools

Buyer's Tip: Some properties offer a public viewing called an OPEN HOUSE. Open houses are typically held on the WEEKENDS anywhere between 12pm – 5pm. We highly recommend you to visit open houses to become familiarized with the market (seeing "what is out there") before you dive deeper into your home search.

Searching property

3. Contact Your REALTOR®

A common mistake many first time home buyers make is to start searching for a home without consulting with an experienced Realtor. Although a Buyer does not directly pay for the services of a real estate agent, the Seller has a pre-arranged agreement to cover this cost but will definitely factor it into the eventual selling price of the home. This means that the Buyer will indirectly be footing the bill for both sides and if that is the case, then wouldn't it make sense to obtain the services as soon as possible? 

Buying a home involves many variables which an experienced Realtor can help an excited home buyer to keep your wants and needs organized and focused on what really matters in this important chapter of your life. One of your Realtor’s job is to help you filter your search so you only look at properties that fit your needs, budget, and lifestyle, which will save you both time and money.

What is a REALTOR®?

– a person who is a licensed specialist acting as an agent for the sale and purchase of buildings and land; also known as a real estate agent.

Dialing phone

4. View Properties

This is the most exciting and frustrating part of the process. It is usually a good idea to set aside 2-3 hours to view properties, ideally with your Realtor by your side. Your Realtor will guide you through each home, point out pros and cons of the home itself, and the quirks of the neighborhoods. Viewing homes without the experienced eye of a Realtor might cause you to miss some of these key insights. After viewings, it is also a good practice to provide your Realtor with your thoughts on each property. This way, they will be able to better understand your preferences, which will help speed up your search for your future Happy Home.

★ ★ HAPPY HOME HUNTING TOUR ★ ★

A typical tour of homes will require 2-3 hours of your time together. The ideal number of properties is roughly 4-5 Listings in one day. It is not recommended to view anymore than that as it will cause confusion.

Houses with nice view

5. Make an Offer

So you have found a home that suits your needs! Congratulations! The time has come to answer some important questions you may have about the property. You may be asking at this point, how much should you offer and what is the fair market value? To help you answer these questions, your Realtor should review what the industry calls a Comparative Market Analysis (CMA) with you, which compares what similar homes in the area have sold for, not sell for and/or are for sale on the market within a reasonable time frame (usually within 3 months). If at all possible, your Realtor might try and find out the seller’s motivation and/or their selling situation. If satisfied with the CMA, you may proceed with making an offer and have it negotiated through your Realtor. Some examples of what might be negotiated are price, dates (completion, adjustments, possession, due diligence), what is included, amount of time to complete your conditions. When all terms and conditions are agreed to by both the Buyer and the Seller, you may accept the offer and proceed to the next step.

meeting with client

6. Due Diligence

The due diligence period is the time frame in which you will complete all the conditions your Realtor negotiated in your contract of purchase and sale. It may include reviewing documents such as the title search or Strata documents (if you are buying strata), conducting a home inspection or arranging financing as discussed earlier. In some instances, and this is where a Realtor will prove their worth, you may be advised to conduct an oil tank search or further investigations of the title to verify charges/zoning/strata plan.

★  Team work makes the dream work ★ 

The Due Diligence Period is typically 5 – 10 business days. Therefore, cooperation with other experts in each field will be very important. Home Inspectors, Mortgage Brokers or Lawyers, Home Insurance Provider, and in the case of Strata properties, the Strata Management company all need to be on the same page and your REALTOR should be able to lead this team to ensure that the you successfully clear each hurdle.

Working under the table

7. Get Your Mortgage Approved

If your offer includes a clause which allows you time to arrange a mortgage, simply provide your financial institution representative or mortgage broker’s contact information to your Realtor. Your Realtor will provide all the information regarding the property to get your application approved.

Approved Mortgage Application

8. Removing Subjects

Simply put, removing the subjects means that you are happy with the information you received regarding the property and you are agreeing to buy it. In order to “remove the subjects,” you must confirm in writing that all conditions have been deemed to be satisfied or waived and signed and dated within the due diligence period.

checklist

9. Pay Deposit

Technically, the deposit is due 24 hours after acceptance of the contract but you may be granted permission during negotiations to submit the deposit when you remove your subjects. Your deposit forms part of your down payment or purchase price and is non-refundable in most cases after the contract is made binding. Deposit cheques are typically paid to the real estate brokerage or lawyer/notary public trust accounts and held until both parties agree to release the funds to complete the transaction at the completion date. It is common for deposits to be 5% of the purchase price or more.

money

10. Choose Lawyer / Notary Public

To handle the transfer of the title of the property and to register a mortgage, it is advisable to choose and hire a Lawyer or Notary Public as soon as possible and no later than 3 weeks prior to the completion date.

Gavel

11. Finalize Mortgage Agreement

If you are applying for financing, you should meet with your financial institution representative or Mortgage Broker to review the terms and conditions of the mortgage. If satisfied, you will be asked to sign the agreement which will then be sent to your Lawyer/Notary Public for registration on the title of your property.

Agreement

12. Finalize Land Title Transfer

With a minimum of two days prior to the completion date, you will be asked to go to the Lawyer/Notary Public’s office and in the presence of a Lawyer/Notary Public review and approve all documentation, which will be registered on the title at the Land Title Office on the Completion Date.

Signing on the paper

13. Pay Balance of Down Payment + Cost of Purchase

In most cases, you will need to bring with you 2 pieces of identification and a bank draft or certified cheque in the amount, which will be determined your statement of adjustments (approximately balance of down payment + closing costs/credits), to the Lawyer/Notary Public. Your Realtor should give you a rough estimate at the time of writing an offer or when you remove subjects.

Laptop with a hand typing

14. CONGRATULATIONS! You are a Homeowner!

The official date that you add the title of Homeowner to your name is the Possession Date. At this time, you should do a walkthrough inspection of the property with your Realtor to verify the condition of the property and receive instructions on the functions of the home. If there any discrepancies, you must communicate this with the sellers through your Realtor as soon as possible.

Key

【ADDITIONAL COST OF PURCHASING PROPERTY】

  • Property Transfer Tax    The amount of the Property Transfer Tax is 1% on the first $200,000.00 of the property's fair market value, 2% on the amount between $200,000 and $2,000,000, and 3% on the amount between $2,000,000 and $3,000,000, and 5% of the remaining fair market value. ※Exemptions applicable if qualified
  • LEGAL FEE - $1000-1300
  • Property Tax Adjustment - To be paid TO the Seller if purchasing between July – December (To be received FROM  the Seller if purchasing between January - June)
  • Insurance - Subject to property but typically as low as $600 per year for a condo (fire and water damage insurance is paid for via strata fees in a strata titled property) and $3000 for a detached.
  • Inspection Fee - $400-600
  • Appraisal Fee - $300-500
  • 1st Payment of Strata Management Fee - $300-500
    (Strata Properties: Condo, Townhouse, Apartment, etc)

"Sayaka made us feel like we were her top priority.  She educated us about the differences first time home buyers are facing and guided us all the way through to help us find our dream house...You will not only be super satisfied but also receive the feeling of being listened to and a top priority to her."

- Buyer 

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