The Buying Process

 

 

            Now that you are preapproved for a mortgage, have created your “Wish List” and have selected the Realtor who will represent you (see Helpful Hints Before Buying) it’s time to start looking for your home!

 

 

The Search

 

            One helpful hint when you start looking at homes is to try and place each home you see in one of three categories.  YES , NO    or  MAYBE   .

 

            The home should be placed in the category based on how it compares with your “Wish List”. Initially a lot of buyers place most homes in the MAYBE category. This is a start, but until you can sort through the “Maybes” and make them a YES or NO you may find the process of finding a home very long and frustrating.

 

            I tell my clients, the day we see a home that they say NO to (rather than maybe) that is the day we are heading in the right direction.

 

            Stick to the WANTS and NEEDS of your “Wish List” and you’ll find the home that best suits you and you won’t be afraid to say NO to the rest.

 

 

Reality Checkpoint

 

            Sometimes our “Wish List” meets reality and we need to review our WANTS and NEEDS as they align with real market conditions.

 

            For example, you need a 3 bedroom, detached home in a certain location for under $200,000. The reality of the market may tell you that those styles of homes in that certain location are priced at $250,000 and higher.

 

            You now have to stop and make a decision ;

- do I need 3 bedrooms

- do I need to be in this specific location

- do I need the house to be detached

- do I need the price to be under $200,000

 

            If you find you can’t change any of your NEEDS , you may find that reality says you are not going to find the home you need at this time.

 

            On the other hand if you find some of your NEEDS can be changed to WANTS (for example you may say, as long as the home is in that specific location, I can be happy with a semi-detached home or townhouse versus a detached home) you may then be able to continue your search and find the home that best suits your NEEDS .

 

 

I found a home I like – Now what??

 

            This is a very common question. Assuming you have done your required preliminary work, such as talking to a lender about financing, creating a “Wish List” and see how this home you found meets those WANTS and NEEDS , and then your next step is to put in an offer to buy that home.

 

            But – before the offer is created, here are some things you might want to know and do?

 

- try and see the home a second time (day light visit) if the market conditions allow

- get your Realtor to find out what the current owners paid for the home and when

- have your Realtor show you recent sales of similar homes in that neighbourhood

- have your Realtor compare the pros and cons of those sales to the home you like to help    establish a market value for the home you want to buy

- based on this information ask your Realtor to suggest a starting offer price and have them state why

- find out if you are the only offer or if you are competing with other offers

 

 

The Offer

 

            When you put an offer on a home it must be in writing and signed by you, before it can be presented to the seller of the home.

 

            So you need to discuss with your Realtor what you want the terms and conditions of the offer to be.

 

            Before we highlight parts of the offer, you need to know if you are the only offer being presented, or if there are other offers as well. If you are in a position, where you are competing with other offers (multiple offers), you need to seriously discuss the consequences of this situation and how it affects your offer with your Realtor.

 

Highlights of the Offer –

 

Deposit –

            This is a dollar amount you are willing to put forward if your offer is accepted. It forms part of your overall down payment. The amount varies from region to region and it also depends on the price of the home. (ask your Realtor what the typical deposit should be) The important thing to remember is if your offer is accepted, you need to provide this money almost immediately. So make sure those funds are accessible and in an account you can write a cheque on and not tied up in an investment you cannot access.

 

Conditions –

            There are many conditions that can go in the body of the offer, we will highlight some of the more commonly used ones.

 

Condition on Financing – This allows you a specific time to finalize the details of your mortgage so you can buy the home

 

Condition on Home Inspection – This allows you to have a qualified home inspector (at your expense) go in and examine the home before you finalize buying it

 

Condition to sell your current home first (SPP) – This allows you time (generally 30 days with some conditions) to try and sell your current home (if you are buying and selling) before finalizing buying the home

 

Status Certificate – (used on condominium properties) This clause requests a copy of the condominium’s financial statements to see if you are buying into a healthy condo. Before finalizing the deal

 

            When it comes to conditions in the offer, you can include almost any reasonable request (reasonable because the seller has to agree to it) Ask your Realtor what clauses are needed to protect you on your offer.

 

Chattels/Fixtures –

            This section talks about what will be staying with the home when you move in and what will be going. (Chattel – something not attached to the home or property – ex – fridge or garden shed) (Fixture – something that is attached to the home or property – ex – ceiling light fixture or built in appliance)

 

            Here is a general rule to follow when buying a home. Any Chattel can be taken by the Seller (unless you specifically ask for it to stay) . Any Fixture should stay (unless the Seller specifically indicates they are taking it with them).

 

            Often Buyers and Sellers forget about an item, or assume things when it comes to Chattels and Fixtures. DON”T DO THAT !!

 

            If you want something to stay with the home, include it in this section of the offer.

 

Irrevocable Date –

            This is how long you are giving the Seller of the home to review and respond to your offer. Unless otherwise specified by the seller, you should keep this time short. Try and have the seller deal with your offer the day you submit it. This means there will be less opportunity for other offers to be submitted. It also means, on the day you submit your offer, be sure to remain available to deal with any changes the seller may make to the offer.

 

 

Completion Date –

            This is the day you take possession of the home (closing day). It cannot be on a holiday or weekend.

 

            Good luck with your offer !!

 

 

Costs to Buying a Home

 

            Before you buy a home, there are a number of things you should do. One of those things is look at the costs involved to buy the home.

 

            Other than the down payment (the difference between the purchase price and the mortgage amount) you need to be aware of the other costs associated with buying a home.

 

            Often called “closing costs” – they generally include the cost a using a lawyer, any land transfer tax and other costs. The typical total “closing costs” range between 1.5% and 2% of the total purchase price. For example a $200,000 purchase would have a “closing cost” range of $3-4,000.

 

            It should be noted the closing costs generally do not include such things as moving expenses, appliances you may have to buy, drapes etc. these would be considered over and above expenses.

 

 

Enjoy!!

 

 

 

 

 

 

Michael J. Wilson – Sales Representative

Royal LePage Connect Realty – (905) 683-1790

 

“ Make the Move with Mike “