A Step-by-Step Guide to Home Buying

Buying a home may be complicated, but it's easier if potential buyers take it just one step at a time. Use this short guide to get a better idea of how the next few weeks (or months) will look.

Finances First

Before buyers even look at an Open House sign, it helps to know what they can afford first. To avoid frustration, talk to your bank about available loans. (For a quick calculation, it's recommended that buyers spend about a third of their income on a mortgage payment.) Remember that pre-approval is not a guarantee by any means. Just because a bank states that a buyer is eligible for a loan of $500,000 doesn't mean that the loan always goes through. Pre-approval is generally a good way to determine financial security, but the reality is that finances are normally what cause home sales to fall through during escrow.

Neighborhoods Next

Buyers should make a list of what they want now, and what they think they'll want in the future. There should be at least a few deal-breakers on this list (e.g., no fixer-uppers, no one-bathrooms, etc.) If a couple wants children one day or their kids will be moving out soon, they should be taking these changes into account. Once buyers have a rough idea of what they can afford, it's time to look at neighborhoods.

While this is usually the fun part of the buying process, it needs to be taken seriously by the buyers. Certain areas, such as Reunion, are perfect for young families, while others are good for single professionals. Consider not just standard features such as schools and shopping, but also amenities that are specific to your lifestyle. For example, if a potential buyer loves to walk, then they'll need plenty of sidewalks and trails. Seemingly small things like this can end up really affecting a person's quality of life.

Look for Help

Most buyers in Canada use a real estate agent to give them a leg-up when it comes to their property search. Not only can an agent make it easier to create a short list of your favorite two or three homes, but they can also make the offer and lending process go a lot smoother. A bank is only going to be able to answer questions about money, but an agent can put all of a buyer's decisions into context. Buyers essentially are learning from other buyer's mistakes so that they don't have to go through the same hassle. A real estate agent will warn you against the wrong properties, help structure the right offer to the seller, and file all the paperwork once the decision has been made.

Close the Deal

Once a buyer knows what they want, it's time to make an offer and hopefully close the deal. Unless buyers are targeting a wildly popular area, then negotiation is expected by the seller. This is not only the time to ask for a lower price, it's also the time to set down any rules a buyer wants the seller to do before handing over the keys. This includes anything from clearing out the underbrush in a garden to fixing the furnace. Once this has all been settled and the loan process is complete, the lender will hand over the money to a lawyer or notary, the buyer will put down a deposit, and the lawyer or notary will pay the seller.