STEPS IN BUYING YOUR DREAM HOME

Step 1: Make sure you’re ready to buy

If you’re thinking of buying a home, you’ve come to the right place. This web site can turn you into a house-hunting master. But before we jump right in, you have to make sure three things are ready. You, your bank account, and the real estate market.

Are you ready?
Be sureFew joys can match the pride of owning the roof over your head, but you will have to make some sacrifices. There’s the obvious financial responsibility, but your home will also require constant care. That’s what real pride of ownership is all about.

Is your bank account ready?
Check it twice.

Your first home will be the biggest financial obligation you’ve ever faced. You should already be an experienced saver, and good at managing debt like student loans or credit cards. Ideally, you’ve also saved up some money for a down payment. Our next step will give you a crystal clear picture about how much you can afford.

Is now a good time to buy?
Here’s the hottest market tip you’ll ever get

Markets go up, markets go down and even the smartest experts can’t accurately predict when a market will peak or bottom out. If you’re buying a home as a long-term investment (and for long-term enjoyment), you should be protected from short-term changes in the market. Over time, real estate has almost always increased in value.All you have to do is pick a home that meets the needs of you and your family. Then you’ll enjoy living in your investment as it grows in value. A home is one of the best financial decisions you can make. If you’re trying to compare what’s the better investment, a home or equities and the stock market - remember, it’s tough to live in a stock portfolio!

Step 2: Figure out how much you can afford

Before you start looking for your dream home, let’s find out how big you can dream. Knowing your true budget is the first and most important step in buying a home. Why?

A home is a big purchase

It’s probably the most expensive thing you’ll ever buy, and there are lots of expenses you might not even know about.

Cost of buying a home = One Time Costs + Monthly Costs
One time costs are - Down payment , Legal fees , Inspection and Taxes
Monthly costs are - Mortgage, Property taxes, Utilities, Maintenance and Insurance.

Everybody’s total costs are different, but it’s almost guaranteed you won’t have that much money saved up. Hopefully you have enough for a nice down payment, but for the rest...Yes, you need a mortgage Step 9 is practically bursting with tips on arranging your mortgage but for now, we just need to figure out how much a bank will lend you.The first step in determining how much a bank will lend you is to understand how much you can afford each month. For that I would suggest you to contact your bank to get qualify how much you can afford based on your annual income and what you have saved for down payment.

Step 3: Decide what you want to buy

First, decide where you want to live

• Urban-Ahh, the big city. Sure the prices are generally higher, but you can walk to a restaurant, may be even to work. You’ll also have the widest range of housing options.
• Suburban- Newer schools, newer shopping centres, bigger yards, bigger homes, no wonder so many people love the suburbs.
• Smaller Cities and Towns- Canada is dotted with thousands of wonderful self-contained communities, and compared to the big city, you can save a bundle.
• Rural -If you like the idea of owning land, how about a few acres all to yourself? Seclusion is not for everybody, but for some, it’s heaven
  

Next, decide what type of home you want
By now, you probably have a good idea of what type of home is right for you. To familiarize you with the terminology, here’s a quick overview:

• Single-family detached-As the name implies, the home is not attached to the home next door. Styles range from a single-story suburban bungalow, to a three-story Victorian.
• Semi-detached or linked-Two houses that share a common wall. Usually less money than a fully detached home.
• Duplex-A building zoned for two families.
• Town house-Also known as terrace or row housing. Several homes with a common style and joined in a row. They usually share walls on both sides.

The Condo Alternative
Some people can’t wait to start gardening on Sunday morning. If you are not one of those people, it can be just an elevator ride away.
How Condos are owned- You’ll own 100% of your unit, and a share of the common areas. Common areas include the necessary plumbing, electrical systems, hallways and elevators. They may also include lots of fun stuff like a private gym or party room.
Condo fees- Membership has privileges, and costs- On top of your mortgage and property taxes, condo owners also pay a monthly fee to operate and maintain the common areas. Be sure to look into condo fees, and how well they’re managed, before signing anything.

New or resale? Resale-
Nothing can match the charm and character of an older home. As a bonus, the previous owner may have made improvements and upgrades and you get them with the house, usually for less than the cost of putting them in yourself. However, some may have a little too much ‘character’, like a leaky roof. Know what you’re getting into. You should always work with a knowledgeable REALTOR®, and as we cover in Step 10 don’t buy a resale home without a Home Inspection.

Ahh... that new house smell
You will be the very first person to live in your new home. In fact, your new home may be so new, that it’s not even built yet.Before you commit to anything, carefully examine the property, the blueprints and visit other homes built by the same company. Have your REALTOR® and lawyer review everything before you sign. While your home is being built, stay on top of the process and remember, you have a legal right to make a full inspection of the house before you accept it as complete.

You know what you want, but let’s talk needs
Are you getting out of a two-bedroom apartment because it’s too small? Then your new home should have at least three bedrooms, and probably a second bathroom. REALTORS® call these must-have features “needs”. Features you’d like to have are called “wants”. Your strategy should be to find a home within your price range that fulfills all or most of your ‘needs’, and as many of your ‘wants’ as possible. To help you with this, we’ve supplied you with your very own Dream Home Checklist.Click here to download it.

Step 4: Finding a REALTOR® who is right for you

You know how much money you have, and you have a good idea of what you want. Now you need the help of a real pro, to make your search a success.

REALTORS®. Highly trained, and constantly training
In Canada, licensed REALTORS® are members of their local real estate board, their provincial association, and the Canadian Real Estate Association. This system of membership ensures the highest level of service and that you are always treated with honesty and integrity. Check our REALTOR® commitment if you want to learn more.

The three REALTOR® relationships
The relationship between a real estate brokerage and a client is called “Agency”, and there are three kinds:

• Seller (Vendor) Agency-The real estate brokerage and all its REALTORS® represent the seller exclusively and it’s their job to get the best offer on the home. They are legally obliged to tell the seller anything known about a buyer. For instance, if a seller’s REALTOR® knows a buyer will pay more for a property, they must tell the seller.
• Buyer (Purchaser) Agency-The real estate brokerage and all its REALTORS® represent the buyer exclusively. They seek out homes that meet the buyer’s needs and help assess the merits and defects of potential homes. They keep the buyer’s information confidential and never disclose information like the maximum amount their buyer is willing to pay.You may be asked by your REALTOR® to sign a buyer agency agreement. In fact, in some provinces, REALTORS® are required to ask you - for your own protection. This agreement ensures that the REALTOR® and the brokerage can look after your best interests, and helps clarify who is responsible for what.
• Dual Agency-Sometimes, a brokerage may have an agency relationship with the buyer and the seller. Both the seller and the buyer must give their informed consent, and the REALTOR® must always provide full and timely disclosure of all pertinent information to both parties.

Sell and buy with the same REALTOR®?
Absolutely! Especially if you’re remaining in the same community. Your REALTOR® is already an expert on your needs, so it will save you a lot of time and energy.

Selecting a REALTOR®
There are lots of ways to find a REALTOR®. As you drive through prospective neighbourhoods, jot down the names and numbers of REALTORS® on the For Sale signs. Open Houses are a great way to meet face-to-face. Maybe friends or family members have a REALTOR® they love. Interview two or three and pick the one you think will be your best “business” partner.

How REALTORS® help buyers like you
Review your list of wants and needs to help you determine your price range. Answer questions about the markets you’re interested in and help you compare homes and neighbourhoods. Use the local Multiple Listing Service® (MLS®). The MLS® is the single most powerful tool for buying or selling a home. Your REALTOR® will give you access to exclusive features of the MLS® system that the public is not privy to. Preview properties to ensure you’re only shown homes that meet your needs and budget. Make appointments and walk you through potential homes, answering all your questions. Give up-to-the-minute information on financing and explain your mortgage options. Negotiate with the seller, smooth out any potential conflicts and draw up a legally binding contract.

Stick with your REALTOR®
One dream, one team. Your REALTOR® will become an expert on your specific needs and tastes. They become your “business” partner, and the business is finding your dream home. Scattering your time and energy amongst multiple REALTORS® will work against your goal of finding your best home. And because most REALTORS® have equal access to the same property listings, there’s no real advantage to having multiple REALTORS®.

Canada’s money laundering reporting requirements
No matter which REALTOR® you select, they will advise you of reporting requirements by FINTRAC, the federal agency responsible for administering Canada’s Money Laundering and Terrorist Financing legislation and regulations. Your REALTOR® is required by federal law to complete a client identification form, and must ask you as a client (buyer) for verified ID such as a drivers licence or passport. You can find out more on the FINTRAC web site http://www.fintrac-canafe.gc.ca/

Step 5. See what’s out there

The hunt is on! Time for you and your REALTOR® to find that perfect home.Read all about it. Start reading real estate ads in local papers. Let your REALTOR® know what you like. Visit areas you’re considering and get a feel for them. Make note of the surrounding schools, shopping and recreational areas. Keep an eye out for not-so-great things like large industrial areas, railway tracks and airports. Visit during the day and at night.

House hunting with your REALTOR® – hunting smarter
If you’ve been very good, you’ve armed your REALTOR® with your Dream Home Checklist. Even if you’ve just talked about it, your REALTOR® knows what you’re looking for.Welcome to the wonders of http://www.realtor.ca/REALTORS® have access to an incredible house-hunting tool called the Multiple Listing Service® (MLS® for short). You can view information about MLS® listings athttp://www.realtor.ca/, the public advertising portal. Your REALTOR® will start sending you listings of potential homes right away. Most listings will have multiple photos, and some even have moving 360-degree views! You’ll be amazed how fast and easy it is to zero in on your favourite few homes.

Work from a short list
If you and your REALTOR® have done your homework, and used MLS® listings to scout ahead, you only need to visit a handful of homes to make an informed and wise selection.

Stay objective when visiting potential homes
Walking through a potential home is a thrill, but try not to lose your head. Don’t let a giant kitchen island or swanky hot tub distract you from your real goal, finding a home that meets all your needs and fits your budget.That’s why we’re arming you with this comprehensive House Hunting Checklist. Print it out and be sure to take it with you to homes you’re serious about buying. Good luck and happy hunting!

Step 6: Make an offer

You’ve found a home? Congratulations! Now, if you actually want to make it yours, you have to make a successful offer, one that the seller will accept.

• Preparing the offer - REALTORS® are expertly trained and will prepare the offer for you. Here are some terms you’ll see in the offer.
• Buyer or Purchaser - That’s you.
• Seller or Vendor - The present owners.
• Purchase Price - The most important number. Let’s hope the seller goes for it!
• Deposit - A cheque you write to the seller’s broker, who deposits in a trust account. This is your way saying ‘my offer is serious’. The size of the deposit is up to you.
• Chattels included and fixtures excluded - Be sure you know what is included with the house! The washer and dryer, the microwave, draperies, light fixtures. Don’t leave anything to ‘chance’ because chances are it won’t be there when you move in.
• Irreversibility of the offer - The length of time you give the seller to consider your offer. Usually less than 48 hours.
• Completion date- The glorious day you take possession! Often 30 or 60 days after signing.
• Clauses particular to this agreement - Every transaction is unique, and your REALTOR® may add conditions important to you. Making your offer conditional upon a proper Home Inspection is a good idea.
• Submitting the offer - You’ve signed on the dotted line and your REALTOR® has whisked your offer to the seller’s REALTOR®. This process works best when you don’t meet the seller in person.
• The seller can accept your offer - Fantastic, when do you move in? The seller can reject your offer It’s not common for an offer to be completely rejected. Your REALTOR® will likely investigate, to see if there was some sort of misunderstanding.
• The seller can ‘sign back’ or counter your offer - The seller wants to alter ‘some part’ of your offer. It’s almost always the price. The seller will cross out the price on your offer and write a higher number. Now it’s your turn to sign back, and see if you can bring that number down. It can feel a bit like a ping-pong match. Emotions can run high, so both sides will be reminded that a little flexibility goes a long way. Good luck!