What are the steps to buying a home? You’re thinking about becoming a homeowner, or maybe you’ve even started looking at listings. Either way, you likely have many questions, from the general “how to’s” to specific queries around financing, different home types and locations, and how to make an offer. To help simplify what can be a complicated process, we’ve outlined the steps to buying a house in Canada.
Here’s our 10-Step Home Buying Process Checklist to get you started!
Step 1: Choose a real estate agent that’s right for you.
A home is a huge investment, so work with a knowledgeable, professional and responsive realtor. Treat your search for the right agent like a job interview. Meet with a few different agents, ask questions, and check references.
Step 2: Know your budget
As you already know, buying a home is going to be expensive. Knowing exactly how much it will cost and how much you can spend is crucial in making a wise investment. Consider your lifestyle, your income and any current debts you’re carrying. Are you secure in your employment? Are you planning any major life changes in the near future, such as a job change or growing your family? Be mindful of the financial impacts this could have.
Step 3: Explore mortgage options and get pre-approved
A mortgage pre-approval informs you of how much your lender is willing to lend you based on several factors, such as your credit rating, income and debts. The lender also guarantees the current interest rate for up to 120 days (time may vary depending on the lender), giving you the freedom to house hunt, knowing that you’re safe from interest rate increases. If rates drop, so too should your guaranteed rate. In addition to the interest rate, be sure to also consider the mortgage terms.
Step 4: Start home hunting
This step has many sub-steps, but let’s narrow it down. While the adage of “location, location, location” still stands when it comes to good real estate investments, the recent trend of remote workplaces has given people greater flexibility when answering that all-important question of “where?” Then comes the what: what type of home do you need to accommodate how you and your family live? Condominiums, townhomes and freehold homes offer distinct benefits, so ensure you choose something that will work for you for the next five years. Create an account and register to receive listings that meet your criteria when they hit the market.
Step 5: Schedule showings
Did you know your agent can show homes in person or virtually? Virtual showings have been around for some time, often used for purchases by buyers from overseas, however, it has picked-up speed with local buyers too, due to the Coronavirus pandemic. Regardless of how you view the listings, keep your eyes on the prize. Remember your budget and the must-haves outlined in step #4 above.
6. Make an offer.
You’ve found the home you want, in a location you like. Now, to make an offer to purchase for a price and terms that are agreeable to you and the seller. Working with an experienced realtor can give you the upper hand. Different market conditions require a different approach – a seller’s market might mean lots of competition, requiring you to come in at or over asking price with few to no conditions. In contrast, a buyer’s market means you have a choice and time is on your side. Lean on your agent on how to best handle the situation.
Step 7: Get a home inspection
Regardless of the market, this is one condition that we recommend you keep as part of your offer. The home inspection is intended to identify any existing or potential underlying problems in a home, alerting the buyer of risks and giving them leverage in negotiating a reduced selling price. Your home inspector will examine systems that are visible without opening walls or floors, including heating, plumbing, electrical, roofing and foundation. The inspection should take approximately three hours and will cost a few hundred dollars, depending on the size of the home.
Step 8: Close the deal
The closing period for your transaction is typically 90 days. However, it can range depending on the agreed upon terms in the Agreement of Purchase and Sale. The homebuyer has some important obligations during this waiting period. Once the offer has been accepted, there’s a window during which you must take all the necessary steps concerning your offer conditions, such as financing, home inspection and anything else that needs to happen before you officially seal the deal. Your mortgage lender will need a copy of the offer to ensure it’s in-line with your pre-approved level of financing. After any adjustments or repairs have been made to your satisfaction, your Realtor will finalize the deal and your lawyer will process the paperwork, including the mortgage documents with your lender. All of this will point to a final date of actual legal possession: the real closing day.
Step 9: Update utilities, transfer services and change of address
During your closing period, keep track of utility and credit card bills, magazine subscriptions and any other regular mail or standing orders that you receive at your current address. Alert them of the address change in advance of your closing date. Also, be sure to contact your doctor and dentist. For family and friends, you can easily send a change of address card via mail or email, but there are a few more steps when it comes to informing government agencies.
Step 10: Move into your new home!
If you’re moving during the busy season (typically summer) ensure you’ve booked a moving company well in advance. If you’re doing it yourself, book the truck, enlist some help and ensure you have ample packing materials. Here are some packing tips:
- Pack the items you will need first in a clear plastic bin
- Pack your plates vertically so they are less likely to break
- Take a photo of how you electronics are connected so you can know where the wires go
- Wrap your breakables in clothing to save on bubble wrap
- Keep your glassware safe by pa cking it with clean socks