Once you’ve decided to buy a home, there are a few things you need to organize before you start the process.
The more you have carefully considered what you want from your home and neighbourhood, and how much you are able to comfortably afford, the more quickly you will be able to decide which property you want to make an offer on.
Here are a few things to keep in mind when you begin to house-hunt:
1. Be informed. There is a lot of information available about buying a home. To help you organize the information on each property you view, Genworth has designed a useful house hunting checklist.
2. Determine what you can afford. One of the first things to consider is how much can you afford to pay each month. Before approaching your bank or other mortgage lending institution, there are several websites that can help you determine approximately how much you can afford. These websites use online mortgage calculators that will help you immediately calculate some approximate numbers to tell you the cost of the home you can probably afford, and how much your monthly payments will be. These calculators are for your information only, however, and do not guarantee that you will automatically get a loan (mortgage) for the amount you want.
3. Get a pre-approved mortgage. You can talk to your lender about getting a pre-approved mortgage certificate. The lender will assess your financial situation and determine exactly how much they are willing to commit to lend to you to buy your property. This will give you confidence when choosing which homes to consider buying. It will also help when you make an offer on a property because the buyer knows you are serious and able to make the purchase.
4. Get a realtor. This is a person who is trained and licensed to help you find and purchase a resale property. There are many different real estate companies in Canada and many agents to choose from. You may decide to choose an agent who has sold other properties in the areas you are considering. Many people choose a realtor who is recommended by a friend or family member. You do not pay for the services of a realtor. They earn their money by keeping a commission on the selling price of the house that they help to sell. The commission is paid by the seller, not by you the buyer.
5. Research your builder. If you are buying a new home and using a builder, be sure to research it carefully. Find out if they are reputable, talk to others who have purchased homes from the builder to find out if they were satisfied with the level of service.
6. Get a lawyer (or notary in Quebec) who deals in real estate. That individual will look over your purchase agreement contract when you are serious about a particular property. The wording in these contracts is very important and your lawyer or notary will make sure everything is done properly in terms of the law. Your real estate agent, friend or family member can recommend a lawyer or notary, but they are also listed in telephone directories and on websites. Professional fees vary, but you should budget for $500-$1,000.
7. Prepare a budget. Write up a budget for your home “closing costs,” or the costs associated with the date on which you actually take possession of your home. This often includes the legal fees, insurance, moving costs, land transfer taxes, other taxes, pre-paid utilities (see Closing Costs in this section). You may even choose, as many people do, to hire a locksmith to change the locks whether you are purchasing a new or resale home, or have an alarm system installed when you move in. It is important to factor these costs into your overall budget plan, including how much you will put forward as a down-payment