How to BUY Your Home Book

A great tool to help the purchaser through the home buying process. This book is a step-by-step guide for someone who is about to buy a home. It describes in detail the many steps in purchasing a home such as making an offer, arranging financing and working with a REALTOR®.

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BUYING YOUR HOME

Why Use a Real Estate Salesperson?
When you have decided to buy a home, the services of a qualified real estate professional are of the utmost importance. The ideal salesperson will have a good working knowledge of local real estate market conditions, be prepared to deliver a high standard of service to customers, and have the support of a large real estate company. Most importantly, a good salesperson will save you time and money. Here are the advantages of working with a salesperson when buying a home:

Salespeople are experienced negotiators who will manage your offers and counter-offers.

A salesperson is familiar with the neighborhood and can give you information on local real estate values, taxes, utility costs, services and amenities.

A salesperson is familiar with the entire home purchasing process and can advise you of your legal and financial options as well as recommend appraisal, home inspection and contracting services.

A salesperson can pinpoint homes that fit your needs and dismiss those that do not, saving you time.

A salesperson knows the potential problem areas in a home and can guide you away from "lemons."

Determine What you Can Afford
Purchasing a home involves one-time costs and monthly expenses.
The largest one-time cost is the down payment. It usually represents between 5-25% of the total price of the property.

In addition to the actual purchase price, there are a number of other expenses that you might be expected to pay for. These are listed below.

Typical One-Time Expenses

Other costs may include landscaping, redecorating, furnishings, appliances and repairs. Typical monthly costs incurred with home ownership are mortgage payments, maintenance, insurance, condo fees, property taxes and utilities.

Obtain a Pre-Approved Mortgage
Having a pre-approved mortgage will give you the confidence of knowing exactly what you can spend on a home before you start looking. You will also be protected against interest rate increases while you look for your new home. Your Mortgage Specialist will answer your questions and help you determine which financing terms and options are right for you. Your Mortgage Specialist and Real Estate Professional work as a team to help you find the right home and select the best financing.

Finalizing Your Mortgage
Once you've found the home you want to purchase, there are some documents you'll probably be asked for in order to finalize your financing. They will include:

1. A copy of the real estate listing of the property. If the home is still to be built, the mortgage lender will need to see the architect's or builder's plans and details on lot size and location.

2. A copy of the offer to purchase or the building contract, if this document has been prepared.

3. Documents to confirm employment, income and source of pre-approval.

If you have a pre-approved mortgage, it's a simple matter of finalizing a few details which your Mortgage Specialist will explain to you.

Choosing a Neighborhood
It is important that the neighborhood you choose to live in is well suited to you and your family. The following is a list of considerations and possible problem areas.

Environment - The quality of air, water and soil is a top concern as a polluted neighborhood can be detrimental to both your health and property value. Ask your real estate salesperson, neighbors and local media about any known environmental issues in the area.

Appearance - The home you are considering may be tidy and attractive inside and out, but how does it compare to the surrounding area? Explore the neighborhood, keeping an eye open for signs of neglect (overgrown lawns, houses in need of paint, trash and junked appliances littering yards). No matter how diligent you are in the upkeep of your property, a run-down neighborhood can drive your property value down.

Crime rate - Check with the local police department to find out if the home you are considering is in a safe neighborhood. Police may be able to provide statistics regarding break-ins and other crimes.

Schools - If you have children, the proximity and quality of schools is an important consideration. Talking to neighbors with school age children can be helpful. In some areas schools will provide data (such as average test scores) that can aid you in determining a school's quality.

Transportation - Convenient access to public transportation and/or major highways can mean the difference between a pleasurable and not-so-pleasurable commute to work.

Amenities - Amenities like a grocery store, parks, recreational facilities, post office, dry cleaner and a doctor's office can make life easier if they are located nearby.

Property Values - By researching the selling prices of homes in over the past decade or so, you may be able to predict future trends. Your real estate salesperson may be able to provide helpful data.

Utilities - Avoid unpleasant surprises by finding out what utility costs are before you decide to purchase. Fees for water, electric, cable TV, phone and gas vary greatly by region.

Noise and Nuisances - It can be hard to get an accurate impression of a neighborhood in just one visit. Be sure to return to the neighborhood at different times of the day and night. Listen for traffic noise, barking dogs, low-flying airplanes and any other noises that could bother you as a resident.

The Major Elements of an Offer
Price - Depends on the market and the buyers, but generally, the price offered is different from the asking price.

Deposit - The deposit shows the buyer's good faith and will be applied against the purchase price of the home when the sale closes. I can advise you on the suitability of the amount of the deposit being offered.

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.

Conditions - These might include "subject to home inspection", "subject to the buyer obtaining financing", or "subject to the sale of the purchaser's property."

Inclusions & Exclusions - These might include appliances and certain fixtures or decorative items, such as window coverings or mirrors.
Closing or Posession 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).

How to Make an Offer
When it comes time to make an offer, I can provide current market information and will assist you in drafting your offer. I will communicate the offer, sometimes known as an Offer to Purchase* to the seller, or the seller's representative, on your behalf. Sometimes there may be more than one offer on a property coming in at the same time. I will guide you through this process. *Offer to Purchase: a legal document which specifies the terms and conditions of your offer to purchase the home. The offer can be firm or conditional. Firm Offer to Purchase: usually preferable to the seller, because it means that you are prepared to purchase the home without any conditions. If the offer is accepted, the home is yours. Conditional Offer to Purchase: means that you have placed one or more conditions on the purchase, such as "subject to home inspection", "subject to financing" or "subject to sale of buyer's existing home". The home is not sold until all the conditions have been met. *In the province of Quebec, this is referred to as a "Promise to Purchase".

Acceptance of the Offer
Your Offer to Purchase will be presented as soon as possible. The seller may accept the offer, reject it, or submit a counter-offer. The counter-offer may be in reference to the price, the closing date, or any number of variables. The offers can go back and forth until both parties have agreed or one of you ends the negotiations.

Hire a Legal Professional
A legal professional is there to represent your interests and to process the legal documentation required. I can provide you with the names of legal professionals who specialize in real estate. The legal process differs from province to province. Your legal professional will advise you on the steps to be taken before the keys to your new home are presented to you.

Have the Home Inspected
Buying a home is one of the most important investment decisions you will make in your lifetime. As such, it makes sound financial sense to enlist the services of a qualified home inspection company to ensure your home is as solid and secure on the inside as it is on the outside. A home inspection will determine the structural and mechanical soundness of your home. Your home inspector will identify existing and potential problem areas, suggest practical low-cost solutions, and provide estimates regarding costs for any work required. Shortly after the inspection has taken place, a report summarizing the findings is generally provided to the potential purchaser. By commissioning a home inspection prior to purchase, you're protecting both yourself and your investment, as well as buying a little peace-of-mind. Home inspection costs often range according to size, age, and location of the home. I can recommend a reputable home inspection service or arrange for a home inspector to visit your property.

Closing the Deal
Closing day is the day you become the official owner of your home. However, the closing process usually takes a few days.

Typically, you visit your lawyer's office to review and sign documents relating to the mortgage, the property you are buying, the ownership of the property and the conditions of the purchase. Your lawyer will also ask you to bring a certified cheque to cover the closing costs and any other outstanding costs. Once your mortgage and the deed for the property are officially recorded, you become the official owner of the property and your lawyer will call you to pick up the keys to your new home. Congratulations! You've just bought a home!