Thinking about buying a home? First home, or third home; not all buying experiences are the same. This guide will provide you with tips, answer the major questions and give you step-by-step guidance to buying a home. Of course, I’ll be by your side the entire time, but it definitely helps to read a bit and understand the process.
About this Guide
Buying a home is a big thing to start thinking about. Filled with tips and tricks, this guide makes your home buying process easy and stress-free. This guide provides a basic understanding on what to expect when buying a home with me; a local Edmonton REALTOR®. It helps better explain the process and provides a better understanding into the real estate world. I know that at any time, things can change, situations happen, your Wishlist changes, etc. rest assured your realtor will be there every step of the way to help. There’s a page on the back that is provided for you to take notes and write questions so when we get together – I can help ease your mind and guide you through your home buying process.
“Dawn was very helpful and responsive to any questions I had. This was my first time buying and I was impressed by how much knowledge she had, her ability to negotiate prices, and just how much time and effort she gave into helping me find my place. I would definitely recommend Dawn to others!”
– Katelyn O.
“Dawn is a professional, responds on time to questions or calls. Great knowledge of the place. Genuine and always ready to help. Easy to work with. I had a great experience working with her and will recommend her to anyone that wants amazing services.”
– Peter A.
“It was our first time buying our own place and Dawn was a delight to work with. She was very helpful and most importantly she always answered/ returned your phone call or text in a timely manner. Highly recommend her!”
– Ravinder R.
6 Steps to Buying a Home
- Get prepared – a Mortgage pre-approval
- Choosing the right “guide” – How to ensure you’re choosing the right agent
- Things to consider – what are your top 5 must haves, and where do you want to be?
- Making an Offer, Inspections, Condominium Document Reviews and Financing
- Fees to Consider
- Closing and Possession Day
The true first step in any home search is the pre-approval. I have a fantastic network of Mortgage Brokers & Mortgage Advisors who can find you great rates & terms, will work around the clock, and are located nice and close to you. In fact, many of them are mobile and can arrange to meet at your convenience and work with your schedule.
Step One: Getting Pre-approved
There are benefits to getting pre-approved prior to starting your shopping:
Peace of Mind
Having full confidence in what you can afford, and that you can confidently shop within your price range. This will prevent you from wasting time, and potentially letting a great home pass you by. Did you know that Mortgage Advisors can work 100% Virtually? There is no need to make in-person appointments, a bonus that reminds you that your time is more valuable.
Mortgage changes have caused buyers to qualify for significantly less, and therefore have caused many deals to fall apart because of financing. Presenting an offer where a client has a full pre-approval will increase the seller’s chance of accepting, and potentially allow for more flexibility when negotiating a final purchase price.
There is no worse feeling than finding your dream home and failing to get approved on financing.
Pre-Qualification VS Pre-Approval
|Informal and self-reported
|Requires paperwork (proof of employment, T4s, pay cheques etc.)
|Done quickly online or over the phone
|Can take a day or a couple weeks
|Soft credit score inquiry
|Hard inquiry on Credit Score
|Provides a general idea of how much you can afford
|Says exactly how much a lender is willing to loan to a home buyer
|Home sellers don’t typically care about a pre-qualification
|Gives the seller confidence that you’re a serious buyer
Step two: Choosing the right agent
You need to assemble a team of professionals – a group of experienced individuals who will have your back from the time you start to look at homes – your own full-service team. A team that works directly for you and ensures they have your best interests in mind. This includes your realtor, mortgage broker, insurance broker, home inspector, and lawyer.
Questions to ask your Realtor
Of course, there are many real estate agents in Alberta. You want to make sure the agent you choose to work with is the one meant for you. Look for an agent who is experienced and knowledgeable in your market, but not so busy that they can’t give you due attention. These are the top three questions to ask your next realtor!
Do they know their stuff?
Dabbling in real estate is not enough. You need an agent who understands value in a home, considers the market surrounding them, and a fantastic negotiator. Having an agent who “knows their stuff” is a huge benefit.
No doubt that you will be spending lots of time with your realtor and ensuring that you connect with them is extremely important. Make sure you are comfortable with them; you can trust them and that your personalities connect.
Have others benefited from working with them?
Like choosing any other employee, you want to ensure that said person has references. Real life recommendations or google reviews are a great place to start. Seeing what that agent has done for others, will ensure you’re making the right decision when choosing who to work with.
Step three: things to consider
So, you’re ready to start viewing homes, and need to take the time to think about each home individually and decide what is best for you. Here are thirteen things to consider when purchasing your home:
|Location of the House
|Possession Time Frames
|Number of Bedrooms & Bathrooms
|The age, style, and condition of the appliances (or will they be removed?)
|Maintenance of fixing that needs to be done
|Size of the Lot
|Age of the Home
|The curb appeal of your home
|Storage space indoors and out
As well, consider your lifestyle – condominiums offer shared amenities, with little responsibility. Single-family homes offer more space and privacy, but much more exterior and yard maintenance.
Condominiums and Townhouses
Condo Fees – costs that cover the maintenance of the building and typically include some utilities, common area property insurance, professional management, amenities, and the reserve fund. These fees can go up everyone in a while and can also include special assessments or additional fees due throughout the years.
Amenities – some condos offer extras for the residents, such as pools, gyms, hot tubs, and additional meeting rooms. The condo building could potentially include these extras when you purchase, so if that is important to you; just ensure you let your realtor know.
Parking – in a condo, parking can come as an additional expense or be included in your condo fees. Some condos include a garage, stall parking or underground parking. Typically titled but could also be assigned. Edmonton is a very car friendly city, so ensuring adequate parking is important.
Management – condos can be self-managed or managed by a professional company. Either way it’s great to be involved as a part of a condo owner, and it helps make decisions regarding assessments, board decisions and more.
Maintenance – Having a home means having more responsibility. Exterior maintenance, furnace repairs and cleaning, etc. ensuring you’re ready for the responsibility of taking care of regular house maintenance is a decision to not take lightly.
Repairs – A new roof, furnace, hot water tank, windows, insulation – the list goes on, and those things get costly. Not everything has to be done at once, however ensuring that you have an emergency fund ready for repairs is extremely important.
Garage & Parking – garage, street, pad etc. – it’s important to know where you can and can’t park around your home. Also, many people in Edmonton favour garages, knowing the type of garage you’d like will affect your search as well.
Step four: making an offer, conditions, condo doc review and financing
Making an Offer
Once you have chosen the perfect house, it’s time to make an offer. Speak to your realtor about your preferred possession date, along with you preferred purchase price and your maximum purchase price. Your realtor will be able to assist with this by doing a full analysis of the home, and comparables in the area to ensure you’re paying fair market value.
Your offer will have several conditions. These are for your best interest and to allow you, the buyer, to do your homework on the home before the purchase is set in stone. Technically, there are no restrictions on conditions. Depending on the property you may require more or less.
The most typical conditions are:
1. home inspection condition
2. Finance condition
3. Condo document review
4. Sale of existing home
5. Appraisal condition
Generally, your condition period is around 2 weeks/10 business days. Once your offer is accepted, you are now “Pending” on that home purchase, and you will have the duration of the condition period to complete your due diligence.
Usually you will be required to give a deposit on your purchase. This is held in trust by either the listing brokerage or seller’s lawyer. Your deposit is divided up into two parts:
- Initial Deposit – The initial deposit is delivered shortly after offer acceptance. Your initial deposit is fully refundable should you not waive your conditions.
2. Additional Deposit – The additional deposit is delivered after condition removal. At this point the deal is firm and your deposit becomes non-refundable at this point.
Reminder: Deposits are part of your down payment.
No house is perfect.
A home inspection is designed to give buyers a better understanding of the systems and overall condition of the home they’re buying. Make sure your home inspector is an expert, with a background in plumbing, HVAC, electrical work, or general contracting, or is a member of a professional organization such as the National Association of Home Inspectors, Inc. (NAHI). You can always ask your inspector for credentials and certifications too. Depending on the current market conditions, you may be able to include a home inspection contingency as part of your purchase contract, even if it’s just for informational purposes. You may be able to negotiate some repairs to bring items up to code or to repair deficient problems. A few things to keep in mind:
A home inspection will point out questionable conditions, code violations, and/or potential safety related concerns in the home you want to buy. It should cover the exterior, porch, deck, foundation and walls, chimneys and roofs, windows and doors, attics, electrical components, plumbing, appliances, central heating and air conditioning, basement/ crawlspaces, and garage.
You should attend the inspection. The inspector will give you a written report so that you can make informed decisions about what needs repair, and whether you or the seller will be responsible for handling them. When the inspector is finished, walk through the home with the inspector so he or she can point out conditions to you that will go into the written report you will receive. In addition, make your own notes so you can discuss the findings with your real estate agent.
Sometimes, a structural home inspection may not be enough. Depending on what is covered in your home inspection, and what is customary in your area\ you may order several types of inspections – structural, termite, and environmental – so be sure to ask your realtor for the best recommendations.
Condominium Documents Review
If applicable, your realtor will assist you in gathering all the required condo documents for a full and proper review. Deferred maintenance issues, unresolved builder deficiencies, and unskilled management often lead to Special Assessments and higher Condo Fees. Having a full review provides detailed advice in risk mitigation. Buyers must be aware that both new and used Condos can have issues. Most troubling are deferred maintenance issues as a result unskilled Condo Board governance and unskilled property management.
Once you have made an offer on a place, it is your realtors’ job to forward all the required documents to your Mortgage Advisor for the lender to approve your purchase and make a commitment that they will be funding your purchase. This typically takes 2-10 days and is more in depth and ensures from a financial point of view that the house is in good standing condition and worth the offered value.
It is extremely important that once you waive your financing condition, you do not change employment, add debt or make any large purchases. This could affect your sale and cause the lender not to finance your desired home on possession day. Although classified as sold once conditions are waived, the lender is not 100% committed until they have released the purchase funds. If you have any questions, your realtor will be happy to give you the best advice.
Step 5: Fees to consider
When calculating your pre-approval and how much you need to save to be able to purchase your home, there are some added fees to consider. In the real estate world, we call these “Closing Costs”.
These fees typically start at the $500 mark, and can go up depending on your inspection company, what tests you choose to get done, and if there’s any additional warranties that come with the inspection. Although the cost can add up, they are significantly cheaper than finding a major problem down the road.
Lawyer fees are approximately $1500 here in Edmonton. They can range depending on a series of different circumstances that could arise during the process. you meet with your chosen lawyer; you will be asked for a cheque for the remaining “closing costs”. Your lawyer will let you know how much to set aside for closing costs, but include everything such as: the remainder of your down payment, the legal fees, out of pocket expenses, GST, hypothetical interest in case you are late paying, adjustments like property tax/condo fee/HOA fee.
Condominium Document Review Fees
These fees are typically around $500. This cost is only when purchasing a condominium, however, is extremely important when ensuring you’re making an informed decision.
Step six: closing and possession day
Once you have waived conditions and met with your lawyer, it’s a waiting game. You will be busy packing, organizing, changing addresses, and trying to figure out the roles as an upcoming new homeowner.
On the day of Possession, your realtor will be waiting for that magic phone call saying that keys have been released. This means that the lender has released your mortgage funds, your lawyer has transferred those funds to the seller, and you now get your keys to your new home!
Key release can happen anytime during that day, sometimes happening as early as 11am, sometimes not until 2pm. Your realtor will let you know as soon as they know; plus, they are just as excited as you are for you to get your new home!
Once you and your realtor arrive at your home, you will complete a full walk through to ensure everything has been left in good condition, all appliances are remaining, and that the house is in the same condition as when inspected. Any deficiencies will be noted and dealt with by your realtor. After the inspection, your realtor will get out of your hair and let you settle in and enjoy your new home.
It’s important to remember, that all home buying experiences are not the same, and that your realtor will be there every step of the way to help guide you and answer all your questions.
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