7 Steps of the Home Buying Process
Saturday Apr 29th, 2017
A home is a pool of memories built everyday with friends, family and neighbors. It also helps build a financial foundation of your future. Buying a home sounds exciting but it is not an easy decision. It comes with its own share of challenges and confusion. Toronto Condo Team is here to help you understand the home buying process.
Let us have a look at the various Steps of the Home Buying Process
Step 1: Are you ready to own a home?
The first step in buying a home is your readiness to buy. This is the biggest question you should ask yourself before starting the home buying process. Ask yourself if the homeownership right for you? Are you financially stable? Will you be able to manage all aspects of this huge financial purchase? Are you aware of all the costs involved including the upfront cost, ongoing cost and the maintenance cost of owning a home? What is your current financial situation? Are you ready to devote the time to regular home maintenance? What type of home do you need? Do you have any location preference? What type of ownership are you looking for, freehold, condo or co-op? Buying a home is one of the biggest decisions you’ll ever make, ensure it is well-thought.
STEP 2: Build a Budget
There is a famous proverb that says, “Cut your coat according to your cloth” which implies, only buy what you have enough money to pay for! Build a budget as per your financial position and plan your home purchase idea accordingly. Set aside some part of it for the down payment and additional costs. This will help you ascertain your affordability to buy a house.
STEP 3: Financing your Home
Meet with your mortgage lender or financial advisor to discuss the available finance options and confirm your financial readiness to buy a home. Discuss with them the mortgage terms and interest rates and the procedure to get an approval for mortgage after find an appropriate home. There are various types of mortgages. The conventional mortgage asks for a 20 percent down payment but in case you don’t have that much ready with you, you can even go for a high ratio mortgage with a mortgage default insurance.
Before searching for a home, getting your mortgage pre-approved is a good idea. A pre-approved mortgage helps you ascertain your affordability, the applicable interest rate and the approximate monthly mortgage payments. You can narrow your home search on the basis of the estimate. However, it is to be noted that getting a mortgage pre-approved is no guarantee of final approval for a mortgage.
STEP 4: Hire an Agent
Your real estate agent is a perfect mix of a consultant, advisor and negotiator. He shows you homes that match your buying criterion and plays an important role in the home buying process. However, finding the right agent is not an easy task. The Toronto market is flooded with real estate agents, all claiming to give you the best deal. The key is to pick carefully! Choose someone understanding and trustworthy. Ask for references and recommendations from friends and family. Select one with a great reputation and having a local office in your area. Don’t be afraid to ask questions. Ask as many questions as you have because an agent is the one who will help you accomplish your house buying goal.
STEP 5: Find Your Home
Now that you have a clear idea of your budget, finances and mortgage, it’s time to actually find your home. Search for a home not from the perspective of today but for the next 5 or even 10 years down the line. Prepare a checklist of your requirements and preferences for a home. Search for a house in different neighborhoods, newspaper listings and websites. Now browse the various listings using the smart listings search at Toronto Condo Team.
STEP 6: Make an Offer
Once you have found the home you desire, its time to make an offer to the seller. An offer is a legal document that should be carefully prepared. This is where the expertise of a real estate agent is required. A real estate agent will help you lay the various specific terms and conditions in the offer. If the offer contains something not acceptable to the buyer, counter offer or negotiation is presented to reach the terms accepted by both the parties.
A typical offer contains the legal name of the buyer and seller, the offered price for the property, the amount of deposit, any other items to be included in the purchase, the closing date, request for a current land survey, offer expiry date and any other additional condition that needs to be fulfilled. The contract is finalized only when all the terms and conditions mentioned in the offer are met.
STEP 7: Close the Sale
Closing the sale refers to the payment of all the closing costs related with the sale of the house on or before the closing date. Once that is done, you are all set to move in to your new home.
Congratulations, your new home welcomes you!