STEPS TO BUYING WITH EVANOFF
You have begun working with an agent at Evanoff Real Estate and are eager to begin touring properties of interest. Before the search, it is extremely important that you have been in touch with a mortgage broker (either independent or through your bank) to secure what is known as a pre approval. The mortgage pre approval informs you of how much your lender is willing to lend based on a number of factors including, your credit rating, income and debts. Once your mortgage application has been completed and processed, your mortgage broker will provide you with your pre approval amount with an interest rate guarantee of up to 120 days (time may vary depending on lender terms). The interest rate guarantee provides you the freedom to house hunt with protection from any interest rate increase. If the rate happens to drop, your guarantee should follow. A key component to house hunting is to fine tooth comb your search, pre approval is the foundation of your search, it is vital to have this organized and confirmed
before moving on to the next steps. *Please note that purchasing a home includes multiple expenses beyond the scope of the listed home price. Expenses such as legal fees, land transfer tax, survey costs (if seller doesn’t have survey), high ratio mortgage premium, reimbursement to seller for the unused portion of any prepaid taxes or utility bills. Your Real Estate Agent and Mortgage Broker will have you well adverse in preparation of home buying expenses.
The pre approval has been secured and now it’s time to speak with your Realtor about the home you are looking for. Over a cup of coffee you will discuss:
Location – Where do you want to lay new roots down? The location of your home is one of the biggest decisions you will have to make throughout this process. The perfect location (proximity to work, schools, shopping and recreational facilities) can immensely upgrade your lifestyle, but it usually comes at a cost. The more desirable a location is, the more expensive the housing will be most likely. Working on balance between lifestyle and what is affordable will need to be taken into consideration.
Features – Deciding what features of your future home are most important to you and your family, knowing what you are looking for will prevent wasting time looking at homes that aren’t a good fit. A home will rarely have everything you want unless you’re building new construction from scratch, so a bit of flexibility will go a long way. The way to make sure you will be as happy as possible with your purchase is to know right away which features are “must have’s” and which are “nice to have’s”. “It would be nice to have a walk in closet but I must have 3 bedrooms and 2 full bathrooms”, these are the types of notions that should be pondered. Once you have decided what features you are looking for it’s time to prioritize them and share them with your Realtor.
Home Type – Are you looking for a single family freehold home? Or a Condominium? Knowing that both types of real estate offer different types of lifestyles and which is most suitable to you is important. Semi-detached and Detached properties generally offer more living space, land and privacy. Condominiums on the other hand offer a more urban experience with close proximity to many luxurious amenities and low maintenance living. Buying real estate is a monumental financial investment. Knowing what you want cannot be overlooked.
The fun part is now about to begin! You have worked extensively with your realtor to fine tune your search and now you will have the opportunity to hunt out in the wild and find your new home! You Realtor will send you listings from the MLS (multiple listings service) based on your criteria and will schedule showings for a mutually agreed upon time.
The moment you have been waiting for! After touring properties with your realtor you have come across a property that meets your criteria and you are ready to prepare an offer. When preparing to make an offer on a property of interest, a pivotal step is understanding the property’s value before deciding on an offer amount. Your realtor will conduct a Comparative Market Analysis (CMA) to share with you. Within this CMA your realtor will compare the property of interest to similar homes in the area that have recently sold, are currently on the market or were on the market and didn’t sell. The purpose of the CMA is to help evaluate fair market value of the property based on location, current condition, size and features. While considering your offer amount, it is necessary to balance the property’s market value with your budget. Current market factors will also be a decisive factor with your decision. In a buyer’s market you potentially have more leverage on your side to negotiate a price below asking, whereas in a seller’s market, you might need to offer at or above the asking price to be competitive (ask your realtor about offer nights/bidding wars). Your offer should be reflective of the properties worth and what you can afford. Be mindful that your initial offer sets the stage for potential negotiations.
Additional considerations beyond the offer amount may include:
- Contingencies, which are conditions that must be met for the sale to proceed. Common contingencies include satisfactory home inspection, which will potentially allow you to negotiate repairs or completely back out of the deal if notable issues are uncovered. Financing contingencies are common practice, this would be used to ensure the deal only goes through once you have secured your lending for the agreed upon purchase price.
- Money deposit which signifies good faith and your commitment to the purchase of the property. The deposit amount generally ranges between 1% – 3% of the purchase price. The deposit can be forfeited if you back out of the deal for reasons stipulated in contingencies.
- Proposed closing date which will align with your needs and the seller’s situation.
Real Estate Paperwork
Your realtor will prepare the necessary paperwork typically referred to as the Agreement of Purchase and Sale. To be valid your offer documents must include the following:
- Your legal name, the name of the seller and the address of the property
- The amount you are offering to pay (purchase price) and the amount of the deposit.
- Inclusion and exclusions
- Your possession date or closing date
- The date the offer expires
- Any conditions that must be fulfilled and waived before the contract is finalized
Your offer is a legal document, we highly recommend you read and understand everything outlined in the documents you will be signing. To ensure you are comfortable, you are able to take your offer to your lawyer for review prior to signing anything.
All of your hard work and emotional investment has culminated to this moment. Your offer was submitted and accepted by the seller’s, now what? The deposit cheque must be delivered to the listing brokerage via certified bank draft, direct deposit or wire transfer within 24 hours of acceptance, so it’s very important that before deciding on your deposit amount you are sure you have this capital liquid. Your deposit will be held in the listing brokerages trust account. If your offer was accepted conditionally it’s time to get to work on fulfilling those conditions i.e; satisfactory home inspection or financing confirmation. When your deal becomes firm, you will need to send copies of the paperwork to your mortgage broker and lawyer so they can prepare for closing. Your realtor will provide you with copies of the agreement.
The big day has finally arrived! The day you take possession of your new home! The lawyer has searched title, the mortgage broker has confirmed your lending, the movers have been arranged, the utilities have been transferred into your name and you now have the keys in your hand. All that is left to do is move in and put your personal touch on it!