Purchasing your first property can seem daunting. pssssssst… it’s not as complicated as it’s made out to be…
10 steps for the typical buying process
- Start with the end in mind – Why do you want to purchase a property?
— Do you want to live there, do you want an income property, or is it some combination of the two? This will obviously impact your search criteria, but also directly reflect in your team selection.
- Pick a great coach – Choose the right Realtor.
— Your Realtor should know more than you. Maybe not about everything, but they should be experts on the neighbourhood, the broader market, negotiating, the relevant asset type (single family, or investment property) and have real experience. They should be able to advise on the entire buying process, and make the necessary introductions (if needed) to help the process along ie. mortgage broker, lawyer, moving company, contractors.
- Figure out what can you afford – Sit down with a mortgage professional.
— There’s no point in hitting the pavement and looking at properties until you know what you can afford. Sit down with a professional (or jump on a quick call!), and get educated on your options.
You’ll need at least these 2 things to qualify :
– lump sum downpayment (at least 5% of the purchase price)
– a regular income (lenders want to know you can pay them back)
Or, you can simply have a briefcase of cash on hand!
- Focus! Narrow your search – Not only to a city, but to a neighbourhood(s).
— The more you can focus, the better chance you will have to find the right property for the best value. If your lens is too wide, you could end up losing out on the property that best suits your needs.
- Make a list – Wants vs. Deal-breakers.
— This will guide you and your Realtor in your search, and ensure that you aren’t wasting any time on properties that don’t fit the bill.
- Get automatic property updates through your Realtor’s brokerage, and Realtor.ca.
— Rather than spending 2hours/day on Realtor.ca to see if any new listings have magically appeared, your Realtor can set up an automatic daily email to send you any new listings that fit the description you established in Step 5. It’s an awesome feature. USE IT! The market is competitive, so the faster you can go look at a property and decide if it’s the right one for you, the better off you will be.
- Ready, Set, Offer — Once you’ve found the right property for you, be ready to make an offer as soon as possible. Until the real estate market slows down and becomes a Buyer’s market (I’ll let ya know…), you have to be prepared to move quickly (FYI – this will be uncomfortable). As long as you have built a team you trust, you can avoid a lot of anxiety and headaches. A great Realtor should advise you based on comparable property sales, income potential, and work to negotiate the best possible price for you.
- Deliver your deposit
— Once you have an accepted offer, you have about 24hrs to submit the deposit cheque to the listing brokerage. The final number is part of the offer negotiation, but it is typically 5% of the purchase price. Be ready to come up with the cash, as any delay can kill your deal.
- Fulfill or waive any conditions — If you had a finance, or home inspection condition built into your offer, you have a specific amount of time to either “fulfill” or “waive” these conditions. If you and your Realtor don’t complete either, the deal will become null and void, and the deposit will be returned to you. If you waive or fulfill all the conditions, then the deal will become “firm” and you are now obligated to close on the property and the seller must follow through.
- Close on the property – Get your keys!
— Your lawyer and mortgage professional will meet with you a few days prior to closing in order to sign off on final documents. You’ll also have to provide your lawyer with the remaining amount of your downpayment, land transfer tax and legal fees. Finally, you’ll get the keys to your awesome new property!