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How to Become a First-Time Home Buyer in 7 Easy Steps!
Dated: October 7 2020
Congratulations you want to buy a home for the first time! I am so excited for you! The process of becoming a first-time homebuyer can bring up a rollercoaster of emotions. But do not worry! The key is to work with the right professionals who understand the process and are happy to offer support along the way. Here are 7 steps to reaching that goal!
1. Contact a Realtor for a Buyer Consultation
Whether buying from a builder or resale, a Realtor is your best asset. During this consultation you will get to know your realtor and they will get to know you and your goals towards homeownership. They will answer your questions and explain the buying process in detail.
Buying a new home is a different process from buying resale. Your realtor will explain the differences so you will have a good understanding of both.
You will set up a plan going forth to find your home. Your realtor will be your valuable resource along the journey towards homeownership and their services are FREE!!
2. Get a Mortgage Pre-approval
Before you start shopping for a new home you will want to make sure your finances are in order. This step is the moment of truth and can make you feel excited and maybe a bit scared. Your realtor can refer you to some friendly and knowledgeable mortgage specialists/brokers who will help you with this process by making it as smooth and easy as possible.
If you want to buy new, it is a different process depending on the stage of construction and the builder’s requirements. Make sure you tell your mortgage broker and realtor in advance so they can explain the differences.
The pre-approval process will also help you determine how much you need towards a down payment. The minimum down payment depends on the purchase price.
Minimum Down Payment Required
$500,000 or less
%5 of the final purchase price
$500,000 - $999,999
%5 on the first $500,000 and 10% of the portion above $500,000
$1,000,000 or more
20% of the final purchase price
Once you have your pre-approval and your required down payment ready, you can shop with confidence!
3. Home Shopping Time
This is the fun part! Your Realtor will set you up on a search and send you properties that match your criteria. You will arrange a date to view your favourites. Picture yourself living in each home and how each fit your lifestyle. This step could take time or no time at all. Your realtor will provide you with information about the home and neighbourhood to help you narrow down your search. It’s like the old saying goes that when you know, you know! That is the feeling you will get when you walk in and find the one!
4. Make an offer!
So, you found the one and you want to make an offer! YAY! Your realtor will do more research to help you put together a fair offer price. They will use their best negotiating skills to get you the best price, terms, and conditions.
If you are buying new from a builder, it is important to know that it is a different negotiation and buying process. The biggest mistake people make when buying from a builder is negotiating like you are buying resale. Builders do not have an emotional attachment to the home therefore they value different aspects. An experienced realtor will know what is negotiable and what is not.
5. Satisfy Conditions
Now that you have an accepted offer, it is time to satisfy the conditions. Typical conditions are financing, condo doc review (if purchasing a condo) and inspection. The average time for this step is approximately 7-10 days. Your realtor will recommend the right professionals to help you satisfy these conditions. Once financing is approved, condo review and inspection check out, it is time to remove the conditions and the house is now SOLD!
6. Meet with mortgage specialist and Lawyer
Time to sit down with your mortgage specialist and sign off on mortgage terms. Your realtor can help you find the right lawyer to facilitate the transaction. You will meet with the lawyer about a week before possession. They will make sure the transfer of land and funds go smoothly on possession day.
Make sure the bank and lawyer have everything they need so there are no delays on your end.
7. Possession Day!
Possession days are the BEST Days! Once the land title and mortgage funds have transferred your realtor will meet you at the house to hand you the keys to your new home! Congratulations the journey to first-time home buying is complete!
Hope this has helped bring a bit of clarity to the home buying process. If you would like to get started book your FREE consultation today and take your first step in turning that dream into reality!
Born and raised in El Salvador my parents wanted to give me and my sisters a better life, so they left the country they knew and loved and immigrated to Canada. This taught me that no matter the situa....
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