okay, so you’re ready to buy.
now what?
getting everything in order.
The first step in your home buying journey, maybe even the most important step, is to your pre-approved for financing. This will let you know how much you can afford, based on factors like your income & credit.
Keep in mind, getting a pre-approval does not guarantee financing once you’ve found the perfect space. Talk to your REALTOR® about the best options for getting prepared and how to protect yourself when you submit an offer.
determine your budget.
Once you’ve received your pre-approval for financing, now you can set your budget. It’s important to consider not only the price of the home, but also associated closing costs which can take up 5-25% of your total budget.
Here’s a quick overview of potential closing costs to expect:
Home and Property Insurance
Mortgage Application and Appraisal Fee
Appraisal Fee
Property Inspection
Land Transfer, Deed Tax or Property Purchase Tax
Legal Fees
Legal Disbursements
Moving Expenses
Deed and/or Mortgage Registration
Property Survey
Mortgage Interest Adjustment & Take Over Fee
Adjustments for Taxes, etc.
Mortgage Insurance
Connection Charges for Utilities such as Gas, Water & Electricity
understand the marketplace
Day to day, week to week, month to month - the Real Estate market is always changing, and understanding market conditions can help you create your strategy. Recently sold comparable properties & local area statistics will help you understand how you stand up against the competition, and lead the hunt.
knowledge is power.
flexibility is key.
Buyer’s Market
When there are more homes on the market than there are buyers looking, this is described as a Buyer’s Market. It might take longer to sell a home, and buyer’s will have more opportunities & potentially more time to negotiate during the purchase process.
Seller’s Market
There is not a lot of supply, but a whole lot of buyers looking for their new home. When supply is low, buyers will experience more competition when putting in their offer, and seller’s have a bit more negotiating power. Often homes sell over asking in a Seller’s Market.
A Balanced Market
The number of buyers looking for their next home and the number of homes on the market are equal. Prices are stable and homes sell in a reasonable amount of time. Buyers have time to think about their options & sellers feel confident their home will sell.
So, you’ve found the one.
before making an offer
In the excitement of finding the potential ‘one,’ there’s a few steps you can take to make sure you’re as confident as possible when submitting an offer.
Send the full listing to your mortgage agent. They will look at the property & its history, and reconfirm your pre-approval based on the specific property.
See if the sellers had an inspection done in advance of selling. Sometimes when sellers are preparing their home, they will have a property inspection done in advance. If there is one available, you’ll have a better idea of any potential issues you could run into down the line.
If you’re looking at a condo, ask if they have the Status Certificate available to review. The Status Certificate will let you know how much the Condo Corporation has set aside for repairs or if the Condo Corp has any liens, loans, or lawsuits waiting to be resolved.
Your REALTOR will be able to help find out as much information about the property as possible to help you feel confident & secure in your decision when submitting an offer.
An offer is made up of six key components;
the price
Maybe the most important part, the price is the amount you are offering to purchase the house. To help pick the magic number, we will review similar properties that recently sold.
the deposit
Your deposit can help communicate how serious you are about your purchase. We can help determine how much to offer as a deposit.
closing & possession dates
This is when title changes ownership and you get the keys. Congratulations, you’re about to step into your new home.
conditions
To ensure you can get all the right information & details in order, you can include conditions in your offer that can give you an out if something doesn’t work out. These might include a home inspection condition, a financing condition or make the purchase conditional to you selling your existing property.
chattels & fixtures
As part of the offer, as a buyer you can request certain items be included in the purchase, and the seller can request certain items are left out of the deal so they can take them with them.
terms
The terms may include the total price offered, if you want to offer additional deposits, or if you are open to assuming the seller’s mortgage.
making your offer
We will help you draft up your offer by providing advice based on our experience, the current market conditions & information provided by the seller.
When you’re ready to submit, we will take care of delivering the offer to the listing agent & communicating with them on your behalf. Throughout the offer process, we keep you informed and guide you through negotiations.
Sellers have three choices when they receive an offer: accept it, decline it or counter offer. It’s important to note that the listing agent is obligated to present every offer that is submitted, and once an offer has been selected, they can only negotiate with one potential buyer. If the seller submits a counteroffer, the negotiation process begins until an agreement is made.
There are two different kinds of offers:
a conditional offer
A conditional offer is exactly what it sounds like - your offer is conditional upon an event that must happen so you can move forward. Whether that means your financing needs to be confirmed, you want a home inspection or you want to review the Status Certificate, a conditional offer will give you time to do your due diligence.
a firm offer
This is an offer without conditions and is generally preferred by sellers as the new buyers won’t be able to back out of the deal if a condition is not fulfilled.
Unless you are completely confident that you will be able to close on the property, a firm offer can be a risky move.
your offer was accepted.
now what?
If your offer was conditional, now's the time to get to work. Depending on which conditions you included, you may need to arrange insurance, financing or a home inspection, and you will have a deadline to make a decision. Once the condition has been fulfilled, we will work with you to prepare & submit a Notice of Fulfillment for each condition.
A copy of the agreement should be sent to your Lawyer & Mortgage Agents so they can begin their tasks to get you to closing.
buyer beware!
Once an offer has been accepted, now is the time to hunker down and avoid big expenses. Avoid costly purchases, like cars, furniture or appliances and try not to change jobs until you’ve gotten across the finish line & to closing day. Big purchases could risk your chances of getting the financing you were approved for, which may mean you won’t be able to close on the house and forfeit your deposit.