A Step By Step Buyers Guide

Step One - Are you Financially Ready to Buy a Home?

Down payments: A down payment is the part of the purchase price the buyer pays in cash rather than financing with a mortgage. Buyers usually need a minimum 5% of the purchase price as a down payment, though some lenders now have mortgage options that will allow you to borrow your down payment, and/or a relative can provide you with a gift of a down payment.

Do you have deposit funds? You will need to provide a deposit with your offer to purchase. Your deposit funds are typically part of your down payment.

Budget for closing: Closing costs are separate from a deposit and down payments, they are typically due on date of possession, which is the date when the real estate transaction is complete. Closing costs include property tax adjustments, lawyer fees, title insurance (if applicable), etc. It is always a good idea to budget a couple thousand dollars, on top of the purchase price, for the closing costs.

Step Two - Working with a Mortgage Broker.

Most buyers need “to a certain extent” some financing (a mortgage) to purchase a home. The two most common sources of a mortgage are directly through a mortgage broker or a bank. Typically, banks only offer their own mortgage products while mortgage brokers can source mortgage products from varying lenders.

Common interview questions for a mortgage broker:

  • are you a licensed mortgage broker?

  • do you represent the borrower, the lender or both?

  • how many lenders do you work with?

  • what services do you provide and how will you help me?

  • do you charge borrowers a fee?

  • how do you receive compensation for your services?

Step Three - Secure Financing.

Mortgage Pre-qualification

Before you go house shopping, you want to know how much of a mortgage your income can support, and what effect your current debt load will have on a possible mortgage amount. You can find this out by getting pre approved for a mortgage.

  • A mortgage prequalification is a tentative approval from a lender for a mortgage based on your qualifications (i.e. income, down payment amount), given in advance of a real estate purchase. Prequalification will provide you with all of the information you need to know about how much of a mortgage you will likely be approved for.

After choosing either a bank financial specialist or a mortgage broker, get your paperwork in order. You will need to have certain documents available when you look for mortgage prequalification, and you will definitely need them when you apply for the mortgage, some of these documents include:

  • proof of employment (for example, a letter from your employer)

  • most recent Canada Revenue Agency Notice of Assessment

  • confirmation of income (for example, pay stubs or a T4)

  • gift letter (if you’re using a gift as your down payment)

Step Four - Talk to me!

(a REALTOR®)

Allow me the honor of taking you out for a coffee/tea. I would love to sit down and have a conversation with you about your real estate goals. I have a “live chat” button on the bottom right of your screen and my phone number is located at the bottom of the page so feel free to contact me anytime. During talks we will go over the RECA Consumer Relationships Guide. This document outlines yours and my duties and responsibilities in a customer / client relationship as well as the 3 types of relationships with a real estate agent. This guide is NOT a contract but highlights that you as the customer / client understand the options presented to you. We can then have an open and honest conversation about your needs, expectations, where you are in the process, how I can best serve you as your agent and also discuss the required fees. Of course this will all be mixed in between any and all questions you may have and casual conversations like how bad the pot holes on deerfoot trail are.

Step Five - Finding your new property!

Now comes the fun part! Here are a few features to consider when you are looking for a property.

  • home style — apartment, townhouse, single family home.

  • number of bedrooms.

  • number of bathrooms.

  • features — yard, garage, deck, basement suite.

  • inclusions — appliances.

  • price.

  • size.

  • location.

Step Six - Offers, Negotiations, Waving conditions.

Congratulations, you’ve found the property you’d like to purchase, what’s the next step? Writing an offer! Lean on me, you’re real estate agent, to discuss potential terms and conditions when submitting an offer to purchase. If your offer is accepted, congratulations! If your offer is declined we will find out why before either resubmitting or moving on to the next property. If your offer is countered, we will go over the offer together before you make a decision whether to move forward or not.

Your offer was accepted! Now it’s time to wave “if applicable” the conditions of your offer. Most common types of conditions in a purchase contract are, Financing, Home inspection and Condominium Document Review. Once conditions are met, a waiver will be signed and the process will move forward.

Step Seven - Prepare for Possession and Possession day!

You will now need to find and meet with a real estate lawyer. This lawyer will go through all legal documents with you, these include the RPR and the title. They will also highlight any possible caveats or restrictions registered against the property, as well as closing costs and disbursements, and have you sign the documents to transfer the property’s title to you after your lawyer advances the purchase funds to the seller. You will need to bring photo ID to your meeting with your lawyer. Some lawyers require two pieces of identification. Ask your lawyer specifically what forms of ID they accept.

Congratulations the property is yours! If the property is not in a substantially same condition as viewed prior, please contact your lawyer. I can attempt to contact the selling agent and work through disagreements that way, but if a seller doesn’t cooperate the matter will become a legal issue between you “your lawyer” and the seller.