Home Buyer Series Part Two | The Buying Process

If you’ve been thinking about investing in real estate but you aren’t sure if you’re ready, you will be after you read this! If you haven’t already read part one – “Everything You Need to Know About Presales” click here.

Step 1: Choose an agent early on in the process, even if you’re just browsing. Most buyers think that they should speak with a realtor later on in the process, however it can save you a lot of time and money by getting your agent involved as early as possible. They can set you up on their newsletter (which will have relevant market information), set you up on a website that allows you to browse through the newest listings before the general public, and give you many other resources. Well established real estate agents often have experience working with mortgage lenders, lawyers, notaries, and much more. Speaking with an agent early on in the process can help you narrow down your buying-team.

 

Step 2: Choose a mortgage lender, and familiarize yourself with the different loan options you have. When choosing a lender it may seem tempting to go with your own bank for the convenience factor. Taking the time to look into other options can save you big money over time. Additionally, mortgage brokers who aren’t tied down to a specific bank have the connections and resources to sometimes get you a better rate –  or in some cases, get you approved for a mortgage when the bank says no! (Don’t know a mortgage broker? Here’s one!) 

 

Step 3: Get pre-approved and keep your finances consistent. After you speak with the mortgage broker, they will have an intimate understanding of your financial situation. Large unexplained sums of money coming into your account or leaving your account could cause difficulties. Try and leave your finances as consistent as possible for 2-3 months. Pre-approval has many benefits: you can put a hold on a desirable rate, security in your financing for stress-free shopping, and it gives you the ability to write more solid offers on properties. Pre-approval is different than pre-qualifying for a loan and it’s important to understand the difference.

 

Step 4: The property hunt. OK YAY! Now the blog gets fun. Property hunting can be as stress free or as stressful as you want it to be. Say this out loud with me “The perfect property doesn’t exist but I can find the perfect one for me!” this is your new mantra. When you’ve been on as many property tours as I have, you learn that there is truly a perfect home out there for everybody; and also there is no such thing as a perfect home. A good way to start is to pick 3 neighbourhoods. Neighbourhood A is your top choice, then you have B and C as second choice and third choice respectively. Neighbourhood can have a huge impact on price. Picking your favourite as choice one as well as two back up neighbourhoods can help you weigh out your options better. It also gives you a fantastic visual on what your money gets you in different neighbourhoods. Next:

  • Have your Realtor book you a property tour. This is where most people contact an Agent for the first time, but lucky for you, you are now a home buying expert! Since you contacted your Agent so early on in the process, by now you’re an expert on property prices in your neighbourhood, and in your second and third choice neighbourhoods as well. The website that my clients have access to allows them to “comment”, “like” and “favourite” listings as they browse, which then notifies me. This makes it really easy when I’m booking their property tour! I gain a really good idea of their style so not only do I book the properties they love, I’m able to sprinkle in a few I think would be a fantastic investment or that I know they’d like and is below budget!
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  • During the tour take notes. Notes are your friend. Notes want the best for you. Take it from me, after walking into 7 different homes in a day it becomes really difficult to remember which one had that amazing grand entrance way. If your realtor doesn’t bring you a notebook to write down in, make sure to grab the feature sheets from each property and jot down a couple things you like. It will save you so many “which house had the ____” conversations.
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  • Keep your team light. My general rule of thumb: If they’re not helping pay for it, they shouldn’t come. I don’t say it to be rude, because personally I love showing up to houses with a giant squad (makes me feel really popular). Over the years I’ve seen how much more difficult it can make the process for the buyer. Everyone has different taste, and your home should be a reflection of yours. Trust yourself, it may be tempting to get the opinion of 9 people first, but unless all their names are going on title, you can send them pictures later! Lastly, very rarely something someone in your squad says can ruin your negotiation power later so it’s best to keep it light and quiet!

Step 5: You’ve found it. It’s perfect for you. You have to have it. Now what? Here’s where the “buying team” starts to do magic. Your realtor is going to use his negotiation power to lower the price (if possible) and find out how many other people fell in love with the home and want to write offers as well. This is called a “multiple offer situation” and it’s a driving force behind the price you will pay. Your realtor will draft your offer, have you sign it, and present the offer in person in front of the sellers and the seller’s realtor. Not all agents choose to present in person, but from my experience a personal presentation is much more impactful than an email. Once your offer has been presented, you must wait until the sellers have made a decision (usually by the end of the day).

 

Step 6: Your offer is accepted. If your offer had subjects, it’s time to fulfil those subjects to get to subject removal. The most common subjects are “subject to inspection” and “subject to financing”. Your mortgage lender will begin finalizing your loan and your realtor can help you find a reputable inspector. Once the inspector has time to write out his inspection report, you and your realtor will go through the report and see if any major deficiencies change your opinion on the property or your original offer price. If yes, you simply re-negotiate or walk away from the deal. If no, you remove subjects.

 

Step 7: Completion. You are a home owner! Completion date is the day that both the sale proceeds and title of the property change hands between buyer and seller. The seller receives money from the buyer, and, in exchange, the buyer obtains legal title to the property.

 

Step 8: Possession day. Possession day is the day you officially get the keys, and when your awesome real estate agent welcomes you home with a gift! After spending so much time together, I generally have a good sense of what type of welcome home present I should get my client. This is seriously the most fun part of the whole process (But negotiating comes in at a close second.)

 

With all this in mind, your next real estate purchase will be a breeze!

Hiring a Realtor cost you $0!