So, you’re thinking of purchasing a property of your very own, one of the biggest financial decisions of your natural life, you’re excited; perhaps a little nervous about the process and wondering what’s next? Well, before we move on, allow me to be the first to congratulate you, owning a property of your own is a huge step forward both financially as well as psychologically. Now let’s get started!
The First Step: Mortgage Pre-Approval
For buyers, this is probably the most important as well as intimidating part of the buying process, arranging financing or in the initial stage, a pre-approval. It’s absolutely vital you get a mortgage pre-approval before looking to buy for many reasons: you immediately establish your available purchasing power or how much you can afford. This immediately narrows down the inventory of properties to a manageable amount that you can then choose from. In addition, you will get a guaranteed interest rate for 90-120 days from the your bank or mortgage broker, if interest rates go up, yours will be locked in and if it goes down you can get an even better rate. It’s a win-win situation!
To be pre-approved, you must complete a mortgage application and will require the following:
• Photo I.D. (i.e. drivers license)
• The amount and source of your down payment.
• Employment details (stability and duration of employment).
• Proof of income (T4, monthly statements or a couple of pay stubs).
• Debts and assets.
You will also need to decide how much of your savings you wish to use as your down payment. Many of my clients who are first time buyers take advantage of the 5% down incentive provided by CHMC, this has helped tremendously in getting a lot of buyers into the real estate market who would have otherwise not be able.
Once you have been pre-approved, you will have a clear picture of what you can afford and what your payments will be, allowing you to start looking for a home with confidence.
The Second Step: House Hunting
Probably the most exciting part of purchasing property is shopping for it. The average buyer typically looks at 7-12 properties before locating their perfect home and it’s a process where patience is most definitely warranted. I usually show my clients 4-6 properties in a day with lunch and a coffee break in between, properties are generally rated in terms of design/aesthetics, property potential, and location. But the following questions should always be asked when looking at a potential property:
• Does the age style of the home and layout of the community appeal to you?
• Is there good access to public transit and major roads?
• Are public parks, roads and sidewalks nearby and in good condition?
• Is there access to the amenities that are important to you?
• Are you close to family and friends?
• Are there medical facilities in the area?
• How do the municipal taxes compare to those in other areas?
• Does the area have the potential to increase in value/popularity?
• Are there any bylaws or development plans that could affect the desirability of the
neighborhood?
Presently, properties are coming and going quite quickly in the Toronto Real Estate Market due to lower supply and higher demand, once a property is found that meets all your requirements and more, it’s time to move on to the third generic step and quickly, making an offer.
The Third Step: Make an Offer to Purchase
Once you've found the property that you’ve been looking for, it then comes time for you Realtor (hopefully myself ) to draft your offer to purchase, detailing how much you would like to offer, the closing date, and any conditions you would like to include such as being able to first arrange suitable financing, or having the home inspected before the offer is finalized. Your offer should also list the items you want to have included along with the home (e.g. appliances, light fixtures, window coverings, etc.).
Your agent (me again) will present the offer to the seller, along with your deposit cheque (usually 3%-5% of the offer amount), which will be held in trust and applied to your down payment when the deal closes.
Don't be surprised if the seller doesn't accept your original offer. Everything is negotiable, so expect some bargaining. As you Realtor, I will advise you on various bargaining techniques to ensure that you get the best possible price as well as the most favorable contract terms when closing.
Once both parties are satisfied and your offer is accepted, it becomes a binding contract between you and the seller. Upon the closing date, the property legally becomes yours and either your lawyer or Realtor will have the keys ready for you to pick up in person. I always tend to do the honors of personally delivering the keys to my clients and congratulating them on the purchase of their new home; Truly, the best part of my job!
The First Step: Mortgage Pre-Approval
For buyers, this is probably the most important as well as intimidating part of the buying process, arranging financing or in the initial stage, a pre-approval. It’s absolutely vital you get a mortgage pre-approval before looking to buy for many reasons: you immediately establish your available purchasing power or how much you can afford. This immediately narrows down the inventory of properties to a manageable amount that you can then choose from. In addition, you will get a guaranteed interest rate for 90-120 days from the your bank or mortgage broker, if interest rates go up, yours will be locked in and if it goes down you can get an even better rate. It’s a win-win situation!
To be pre-approved, you must complete a mortgage application and will require the following:
• Photo I.D. (i.e. drivers license)
• The amount and source of your down payment.
• Employment details (stability and duration of employment).
• Proof of income (T4, monthly statements or a couple of pay stubs).
• Debts and assets.
You will also need to decide how much of your savings you wish to use as your down payment. Many of my clients who are first time buyers take advantage of the 5% down incentive provided by CHMC, this has helped tremendously in getting a lot of buyers into the real estate market who would have otherwise not be able.
Once you have been pre-approved, you will have a clear picture of what you can afford and what your payments will be, allowing you to start looking for a home with confidence.
The Second Step: House Hunting
Probably the most exciting part of purchasing property is shopping for it. The average buyer typically looks at 7-12 properties before locating their perfect home and it’s a process where patience is most definitely warranted. I usually show my clients 4-6 properties in a day with lunch and a coffee break in between, properties are generally rated in terms of design/aesthetics, property potential, and location. But the following questions should always be asked when looking at a potential property:
• Does the age style of the home and layout of the community appeal to you?
• Is there good access to public transit and major roads?
• Are public parks, roads and sidewalks nearby and in good condition?
• Is there access to the amenities that are important to you?
• Are you close to family and friends?
• Are there medical facilities in the area?
• How do the municipal taxes compare to those in other areas?
• Does the area have the potential to increase in value/popularity?
• Are there any bylaws or development plans that could affect the desirability of the
neighborhood?
Presently, properties are coming and going quite quickly in the Toronto Real Estate Market due to lower supply and higher demand, once a property is found that meets all your requirements and more, it’s time to move on to the third generic step and quickly, making an offer.
The Third Step: Make an Offer to Purchase
Once you've found the property that you’ve been looking for, it then comes time for you Realtor (hopefully myself ) to draft your offer to purchase, detailing how much you would like to offer, the closing date, and any conditions you would like to include such as being able to first arrange suitable financing, or having the home inspected before the offer is finalized. Your offer should also list the items you want to have included along with the home (e.g. appliances, light fixtures, window coverings, etc.).
Your agent (me again) will present the offer to the seller, along with your deposit cheque (usually 3%-5% of the offer amount), which will be held in trust and applied to your down payment when the deal closes.
Don't be surprised if the seller doesn't accept your original offer. Everything is negotiable, so expect some bargaining. As you Realtor, I will advise you on various bargaining techniques to ensure that you get the best possible price as well as the most favorable contract terms when closing.
Once both parties are satisfied and your offer is accepted, it becomes a binding contract between you and the seller. Upon the closing date, the property legally becomes yours and either your lawyer or Realtor will have the keys ready for you to pick up in person. I always tend to do the honors of personally delivering the keys to my clients and congratulating them on the purchase of their new home; Truly, the best part of my job!
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