Whether you’re buying your first home or purchasing your forever home, real estate transactions can be a stressful process. It’s a process that requires considering multiple elements that can seem daunting. We’ve developed this guide to help you understand how to navigate your purchase including the following:
- Finding, and working with, the right Realtor®
- Understanding the offer process
- Inspecting the home yourself
- Insurance options
Finding the right Realtor®
Sure, you want to find the right home. In the right location and at the right price. And you want to do it quickly, with minimum hassle. The best way to do that is to work with a professional Realtor® who will understand your wants and needs, your time frame and your financial boundaries.
Why work with a Realtor®?
If you’re wondering why you should work with a Realtor®, the following list provides you with a handful of reasons why you should.
- You’ll save time. A Realtor® can pinpoint homes that fit your needs and dismiss those that don’t.
- You benefit from an experienced negotiator. Your Realtor® will manage your offers and counter-offers, ensuring that you get the best possible price for your home.
- You’ll get the right information. A professional Realtor® knows the neighbourhood and can give you accurate information on local real estate values, taxes, utility costs, services and amenities.
- You can always count on great advice. Because your Realtor® is familiar with the entire home purchasing process, he or she can advise you of your legal and financial options, and recommend appraisal, home inspection and contracting services.
Choosing a Realtor® that understands your needs
When determining of the realtor you’re considering is right for you there are some questions to ask. Remember, the Realtor® works for you so be sure these needs are met:
- Will you be representing my interests
- Do you have access to MLS information?
- Will you provide market evidence to support the price?
- Will you look after closing and possession details?
- Can you be contacted at any time?
How to work with your Realtor®
Let your Realtor® do the searching for you. The best buys aren’t in the newspaper ads. Most great opportunities are on “hot sheets” that are available every morning to salespeople with access to MLS information.
A Realtors® job is to:
- Provide information on the property and the area
- Negotiate a price and terms that are agreeable to both buyer and seller
- Help arrange a source of financing
As a homebuyer, you must work with your Realtor® to find the home that’s the best fit for you. Communication is key – tell your Realtor® what you want, and be specific. Here’s a list of starting points for communicating with your Realtor®.
- Offer a detailed description of your property needs and wants. If you will absolutely not consider a house without a hardwood floor, say so. And if air conditioning is a “nice to have” rather than a “must have” communicate that, too.
- Be specific about where you want to live. If you don’t want to live in a certain area, it might take longer to find you a home, but your Realtor® will know not to waste your time with anything not in your preferred neighbourhood.
- Tell your Realtor® what you can afford. He or she can help you get a pre-approved mortgage to help you stay within your financial comfort zone.
- Communicate your likes and dislikes for each property you see. It will help your Realtor® narrow down the possibilities.
- Commit to one Realtor®.
- Respect and perform the terms of the purchase agreement.
- Have an open mind. Realtor’s® know about those charming little areas that you’ve never even heard of. You might find your dreamhome in a completely unexpected place.
Submitting an Offer
Here’s a quick reference to everything you need to know about making an offer on a property.
1. Price – Depending on market scenarios and the buyers, but generally, the price offered is different from the asking price.
2. Deposit – Shows the buyer’s good faith and will be applied towards down payment of purchase of the home when the sale closes. Your Realtor® can advise you on a suitable amount to offer.
3. Terms – Includes the total price the buyer is offering as well as the financing details. The buyer may be arranging his/her own financing or may ask to assume your existing mortgage if you have an attractive rate.
4. Conditions – These might include “subject to satisfactory inspection,” “subject to the buyer obtaining financing,” or “subject to the sale of the purchaser’s property.”
5. Inclusions and exclusions – These may include appliances and certain fixtures or decorative items, such as window coverings or light fixtures.
6. Closing or possession date – Generally, the day the title of the property is transferred to the buyer and funds are received by the seller, unless otherwise specified (except in Manitoba and Quebec).
7. Things to look for when you buy – Think Long term when buying a home. What kind of home do you need now? What will you need in 5 to 10 year. Consider the following:
- the location and neighbourhood
- the size of the property and home
- the type of home — for example, detached, duplex, row house or condominium
- the travel distance to work, recreation and services
- any special features you want or need — for example, accessibility or efficiency upgrades
- your lifestyle needs and possible changes in the future
- your preference for a new, resale or custom-built home
The Home Inspection
When you fall in love with a home, the things you like about it can blind you to its problems. Next time you go to an open house or tour a property with a Realtor®, keep your eyes open with these top tips:
- Take a look at the general upkeep. Is it clean? Are lawns left uncut? Do walls need paint? If the small stuff hasn’t been taken care of, there’s a good chance that bigger issues have been ignored as well.
- When visiting homes on your short list, inspect with a more critical eye.
- Check for water damage. Look at ceilings and drywall for stains and bulges. Water that works its way in through a leaky roof or a cracked foundation can rot wood, create mildew and destroy possessions.
- Watch for “spongy” floors. Take note of soft, springy sections, squeaky or uneven areas – these can be a sign that costly floor repairs are needed.
- Check doors and windows. Make sure they fit snugly in their jambs and operate smoothly. Feel for drafts. Look for flaked paint and loose caulking – if wood isn’t protected from moisture, it will rot.
- Look at the foundation. If you see deep cracks or loose mortar and bricks, there may be a significant structural problem. Soggy areas near the foundation are also a warning sign.
- Make sure there’s enough storage space. If you are moving from a home with large closets and a shed, make sure your new house is able to store an equivalent amount of belongings.
- Measure. Make sure your furniture will fit into your new house.
- Hire a home inspector when you’ve agreed on a purchase price.
These tips are for your own first (or second) look at a home. For true peace of mind, you should always hire a certified home inspector before you buy.
Protect your home with insurance
When you purchase a home, you have several insurance options that will protect your investment in different ways.
Most mortgage lenders insist on fire insurance coverage that is at least equal to the loan amount or the building value, whichever is less. You should also consider a homeowner’s policy that combines fire insurance on the building and its contents with personal liability coverage. Consult your general insurance Realtor® for professional advice.
Mortgage Life Insurance
When lenders refer to mortgage insurance, they’re referring to coverage that’s provided by CHMC or MICC for a high ratio mortgage. Mortgage Life Insurance (MLI) is optional, inexpensive coverage on your life, which protects your beneficiaries by paying off your outstanding mortgage in the event of your death. MLI premiums are based on your age and mortgage amount. The premium is added to your mortgage payment so there’s no extra paperwork, and it remains the same until your mortgage is paid off.
Disability Insurance provides replacement income if an accident or illness prevents you from working.
Job Loss Mortgage Insurance
Job Loss Mortgage insurance covers the mortgage payments in the event that you involuntarily lose your job.