When you are making one of the most significant personal investments of your life, you want to work with someone you can trust. By using the services of a trained professional, you’ll have an expert who can help guide you through every step of buying or leasing a property. After all, the key to making smart decisions is being informed. Without a real estate advisor, you may be vulnerable to costly mistakes. Naturally you’ll want to maximize your investment, and having a professional Realtor on your side increases the likelihood of purchasing the right property at the best price and with the fewest hassles.
The Buying Process
Why should I use a real estate salesperson?
A real estate salesperson is more than just a “sales person.” They act on your behalf as your agent, providing you with advice and guidance and doing a job – helping you buy or sell a home. While it is true they get paid for what they do, so do other professions that provide advice, guidance, and have a service to sell –such as Certified Public Accountants and Attorneys
The Internet has opened up a world of information that wasn’t previously available to homebuyers and seller. The data on listings available for sale is almost current – but not quite. There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with an agent.
If you’re selling a home, you gain access to the most buyers by being listed in the Multiple Listing Service(MLS). Only a licensed real estate agent who is a member of your local MLS can get you listed there – which then gets you automatically listed on some of the major real estate web sites. If you’re buying or selling a home, the MLS is your agent’s best tool.
However, the role of an agent has changed in the last couple of years. In the past, agents were the only way home buyers and sellers could access information. Now agents are evolving. Because today’s home buyers and sellers are so much better informed than in the past, expertise and ability are becoming more important.
The real estate agent is becoming more of a “guide” than a “salesperson” — your personal representative in buying or selling a home.
Meet with a Realtor
When you’re looking to move, either by selling your home or buying a new one, one of the first steps involves meeting with a Realtor. Your agent will be the person who guides you through the process and acts as your guide throughout the buying or selling process. They will offer advice and work hard to put you in the best financial position possible.
During your first meeting with a Realtor, make sure you come prepared with the right questions to learn about the process. With a little preparation, you can both get off on the right foot and move forward with a clear idea of what the agent will do.
Discuss home requirements
- Do you need several bedrooms, more than one bathroom, space for a home office, a two-car garage?
- Do you want air conditioning, storage or hobby space, a fireplace, a swimming pool? Do you have family members with special needs?
- Do you plan to have children? Downtown or suburbs? Proximity to recreation or work.
- Do you need a substantial backyard? Pets?
- Is there adequate storage space?
- Will any remodeling be required to make the home move-in ready for you?
- What service providers (cable, Internet, telephone, Satellite) are available in the area, and is the house completely wired for each?
- How much are the yearly property taxes?
- How much do utilities run each month? Does the house use gas or electric for the furnace, water heater, and appliances?
- How old are the major appliances, and which are included with the house?
- Have there been any major repairs to the house, and if so, when were they completed? For example, how old is the roof? Has water ever damaged the basement or foundation?
- Ever had problems with insects, such as termites and spiders, or rodents?
- Older homes need to be carefully examined – Windows may need caulking or new sashes, bathroom tiles may need grouting, home may need rewiring (planning on a hot tub or sauna?), a new hot water heater, or a new furnace.
- Where do you want to live? Are there particular neighborhoods or communities that you like?
- Have you determined your price range or consulted a lender to determine the best price range?
Have your Realtor assists you with finding a mortgage company
There are several benefits to going the extra mile and getting a pre-approval letter. First of all, you will know exactly how much real estate you can afford. When you find a property you want to buy, your offer will be in a better positioned than someone less prepared. Finally, being pre-approved is more efficient; it reduces the amount of time it will take your lender to fund your loan. Be prepared to provide comprehensive documentation, which the lender may independently verify, including but not limited to:
- Job and career status
- Monthly debt payments
- Cash available
- Total assets and debts
Obtain pre approval from your mortgage company
If you haven’t already gone through the mortgage pre-qualification process, you will need to meet with a lender or mortgage broker. They will establish how much of a mortgage you will qualify for. Mortgage rates vary considerably and it is paramount that you shop around for the best rate, terms and options. The pre-qualification process can be completed fairly quickly, based on less information than is required for getting pre-approved. While it is fast and it does help, a pre-qualification letter is an opinion from a lender of the maximum amount of real estate you can qualify for. In a competitive seller’s market, an offer from a buyer with a pre-qualification letter could lose out to a person who is pre-approved.
View homes with your Realtor
As a home buyer, you can expect to see an array of different home styles and designs. You’ve got the choice of single-family, condo, townhome, lakefront, acreage, luxury; you can also choose bungalow, multi-storey,
or split-level. In addition, you can choose a pre-existing home or new construction. In other words – you’ve got options. But what’s most important is that you choose a home that complements your lifestyle and your income.
• Determine a desired location.
• Consider how many bedrooms, bathrooms and square feet you need.
• Decide which amenities are must-haves versus like-to-haves.
• Consider your needs for outdoor space, like a yard or balcony.
Write an offer on the home that meets your requirements
Your Realtor will guide you on the best way to work together throughout the search process once he or
she has a solid understanding of what you are looking for. Your Realtor will organize showings for properties that interest you based on neighbourhood and price. It can be invaluable to provide feedback to your Realtor after showings to help them to refine the search parameters. When you’ve found the home you want to buy, it’s time to make an offer to the seller. You should expect to negotiate. While the process can be stressful, it’s all about making the best deal for you and the seller.
When you’ve found the home you want to buy, it’s time to make an offer to the seller. Once you have found a home you would like to purchase, your Realtor will prepare a Contract of Purchase and Sale, which is how a written offer is presented. It is a legal document issued by a buyer containing the terms and conditions desired to purchase a property.
- Standard elements include:
- the date of the offer
- full legal names and addresses of the buyer and seller
- full legal description of the home
- the amount of the deposit
- the sale price
- the date for the completion of the sale
- the date for the possession of the new home
- the list of conditions that must be fulfilled (also called subject clauses)
- the list of inclusions (i.e. fridge, stove, washer, drapes)
- the date and time when the offer expires
- the signature of the buyer and his/her occupation
Agree on terms and conditions
Now that you are seriously looking at the property its time to take a look and review the terms and conditions. This can vary quite a bit so its important to keep a close contact with your agent. The buyer may impose conditions on the offer to purchase. A conditional offer means there is no binding contract until the conditions are met. For example, a condition may be the approval of the buyer’s mortgage or that the buyer sells their home by a specific date. If the condition is not met, and a mortgage is not obtained, or the buyer’s house is not sold within the specified time, the Agreement cannot go ahead. Other standard conditions include the buyer obtaining a satisfactory home inspection by a licensed inspector or repairs completed before the sale. These conditions must be met or waived by the buyer; otherwise, there is no binding Agreement. The requirements should be both reasonable and limited in time. Once all the conditions in the Agreement are met or waived by the buyer, the buyer is bound by the offer to purchase.
Spend 10 -14 days satisfying conditions
It takes time to organize and process these conditions. So take your time and properly fill the necessary paperwork and duties so there is less time for any errors that may come up and less time spent on looking at documents and more time owning your new property.
Realtor will forward all documentation to the lawyers for the transfer of title
Now that the documents are in order the Realtor will forward all documents to all parties for the transfer of property title.
Prepare for possession date
This is the date the buyer can take possession of the property. When negotiating this date, consider if there
are any relevant time frames affecting your choice, such as the date when you must vacate your current
property. Your Realtor will be able to help you align the dates for a smooth transition between relinquishing
your old property and moving to the new one.
Transfer utilities at least 2 weeks prior to possession date
Your new home may have utility services already, so getting an account set up in your name could only take a phone call to the utility company. If you already have electricity and/or gas in your name, you may be able to transfer accounts from one billing address to another. Try to call the utility company at least two weeks before you take possession of your home. New customers will need to provide their full name and contact information (phone number and email), service address, and desired service start date. You may also be asked to provide some type of identification, such as your driver’s license number. If you want to switch to a competitive provider at a future date, you can do this after service is set up with the regulated rate provider.
Establish home insurance at least 2 weeks prior to possession date
Prior to closing on a mortgage, your lender will require you to get a homeowners insurance policy and keep your home insured through the duration of the loan term. Before officially closing on a mortgage for your new home, your lender will provide a list of requirements and tasks that must be completed. Those steps include a title search, obtaining title insurance, and buying a homeowners insurance policy for the home.
- Prior to closing on a home mortgage, your lender will require that you purchase homeowners insurance
- It is generally recommended that you start shopping around for homeowners insurance and comparing policies anywhere from three weeks to a month in advance of the closing date
- Most lenders will require that you provide proof of homeowners insurance a minimum of three business days out from the closing date
- Your lender will likely require that your first year’s homeowners insurance premium be paid up front
Meet with your lawyer to transfer the funds for the purchase 1 week prior to possession
Generally you should contact your lawyer at least two weeks before your closing date. Ensure you have provided them with all of your contract documents, your lender’s information, and your realtor’s information. You will need to bring two pieces of identification and the final cash amount required to close the deal (your lawyer should be able to inform you of the exact amount required). This amount will include the remainder of the purchase price (not covered by deposit or mortgage funds) plus any adjustments for property taxes and legal fees.
Walkthrough morning of possession with your Realtor to ensure condition of property is satisfactory
This is the day you are finally able to enjoy your new property whether it is a move in ready home, a new renovation project, a weekend cottage or a commercial property to locate a business. You’ll obtain the keys to your property including any interior doors, lockboxes or outer buildings. Discuss with your Realtor any other
activities, which may include a walk-through inspection of your property with your Realtor. You can now begin the move-in process.
Review keys on day of possession
On possession day your team of professionals are putting things together behind the scenes to get you your keys. They are working hard for you, and there are a lot of final details that are getting ironed out. Usually home buyers are raring to go by the time the call come from their Realtor. They are packed up and ready to move. It is not uncommon for a buyer to meet their Realtor at their office or at their new home, depending on each other’s schedules. I also want to mention that all of the Seller’s Realtor’s advertising (signs, keysafes, etc.) should be removed before possession day. The Sold sign is not permitted to be on your property once you are rightful owners. Once the owners enter their new home the 1st things they should do is establish that the home is “substantially the same as when the home was sold” as per the purchase contract. If there are any issues in this regard, then both the buyer’s and seller’s Realtor should be notified immediately in order to solve any issues. The best practice is for the Buyers Realtor and the Buyer(s) to do a quick walk through at the home on possession day to make sure that there haven’t been any substantial changes.
Move in to your New Home!
The first thing on your possession day checklist, after you’ve unlocked your doors, is to go through the house and do a thorough walkthrough of the property.
Consider checking the following parts of the home and surrounding property:
- Are all doors, windows, electrical outlets and plumbing fixtures operational?
- Is there any new ceiling or wall stains or damage that wasn’t present at the time of your home inspection? Include the basement and look for any signs of water damage.
- Are all of the home appliances (laundry, central vacuum, stove, air conditioner) operational?
- Test your smoke alarms and carbon monoxide detectors as you do your walkthrough.
Although it may seem like a lot of double-checking, you want to be sure your new home is ready for you to move in and that you don’t accidentally take on any additional costs that are the previous owners’ responsibility.
If you haven’t already done so, the first few days upon moving in is the time to get all of your utility connections set up, including electricity, internet and cable. It’s best to do this before you move in, but sometimes in the business of packing and signing paperwork, we might not get around to them until after we move in – and that’s okay. When you move into a new home, it can take time to become acquainted with all of the areas that may be essential if any emergency were to occur. In the weeks following possession day, take time to prepare for any emergencies by locating your circuit box and breakers, gas shut-off valves and main water shut-off valves. You should also keep all of the mortgage documents that you will receive in the weeks following possession in a safe place like a safety deposit box. It also recommends keeping a ‘sinking fund’ (aka emergency fund) which is savings for housing-specific emergencies, like a flood or broken appliance. An emergency fund for your home can help save you from having to spend money out of pocket when an unexpected expense comes your way.
When you move into a new neighbourhood, it’s always a good idea to introduce yourself and get to know the surrounding area and community members. The first thing you could is to walk around local paths to get comfortable with the location and start to get a feel for the atmosphere you could expect.
The day has arrived! You have signed the documents, turned over your cheque, and received the keys. The home is yours! You’ve placed your belongings, paid the movers, and the new place is starting to feel like home. Congratulations you are now a homeowner!
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