Steps to Home Ownership

1.    Pre-approval

A mortgage pre-approval is a statement from a lender indicating that you are qualified to borrow up to a specific amount. This helps you establish a budget and gives you confidence in your price range. Being pre-approved strengthens your position as a buyer, as sellers are more likely to accept your offer due to the reduced risk of the deal falling through. Obtaining a pre-approval is the first step before making an offer on a home. 

 If you need recommendations for mortgage brokers, I'm more than happy to assist you.

2.    Documents needed

• Proof of employment
  If you have been in your current job for less than a year, you will need a letter from your employer confirming your hours, position, and stating that you will continue working there for the foreseeable future. 

• Proof of income
  This includes pay stubs and T4s. If you are self-employed, you will need at least two years of financial records for your business. 

• Credit check and bank statements
  Provide statements from the past 90 days. 

• Debt information
  Include details about any existing debts, such as auto loans.

3.    Lock in interest rate

You can lock in a rate for 90 to 120 days. If rates increase during that period, you will retain the locked-in rate. If rates decrease, you'll benefit from the lower rate. For new builds, you can lock in your rate for up to 12 months.

4.    Paperwork

• Representation contract

  The Buyer Representation Agreement outlines your purchase criteria, term length, and fees (paid by the seller), and clarifies the obligations of both the client and the agent.

• Customer relationship guide 

  This guide outlines the various types of relationships you can have with a real estate professional and ensures you understand an agent's responsibilities and potential conflicts of interest.

• FINTRACT 

  FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada, mandates that forms be completed to record information from government-issued photo IDs. This helps in detecting and preventing money laundering.   

• Certification and consent

  This form certifies that any residential purchase you are making is for your own account, not on behalf of a third party, and confirms that you are either a Canadian citizen or eligible under the Non-Canadians Act.

5.    Home search

As we search for properties, we will set you up with a customized email alert system that sends listings matching your criteria and notifies you of new listings or those that go conditionally sold. Either I or a team member will schedule and accompany you to showings, offering our expertise and feedback. To stay focused, it’s helpful to create a list of your needs and wants. Common considerations include location or neighborhood, the number of bedrooms and bathrooms, size, and specific features.

6.    Writing an offer

When making an offer on a house, be prepared for a counter offer, unless you’re in a multiple offer scenario. Your negotiating power will be influenced by current market conditions, including local demand, inventory levels, and the number of days a property has been on the market. Your offer can be firm (not usually recommended), meaning it has no conditions attached. Alternatively, a conditional offer requires certain conditions to be met for it to be valid, typically within a 1 to 2-week timeframe.

7.    Deposit

Be prepared to make a deposit within 2 to 3 days of your offer being accepted. This deposit will be held in trust by the listing brokerage. It is fully refundable if you do not waive your conditions and choose to walk away from the purchase. However, if you waive your conditions and proceed with a firm sale, the deposit will be applied to your downpayment. 

While there is no fixed amount for the deposit, a larger deposit can signal to the seller that you are a serious buyer.
Common deposit amounts might be as follows:

• $0-$300,000 Purchase: $5,000 Deposit

• $300,000-$500,000 Purchase: $10,000 Deposit

• $500,000-$1M Purchase: $20,000 and up

Additionally, the source of your deposit will need to be verified as part of the financing process. 

8.    Conditions 

• Home inspection
  You’ll engage a home inspector to assess the property, checking the condition of critical systems such as plumbing, roofing, heating, and electrical. This inspection allows you to withdraw your offer, request necessary repairs, or negotiate a price reduction if issues are found. The focus is on significant safety concerns and repairs rather than minor details.

• Financing

  If you're obtaining a mortgage, you should be pre-approved by now; however, the lender still needs to approve the property itself. This financing condition allows the lender the necessary time to complete the mortgage approval process.

• Condo documentation review

  This review should be conducted by a condo document specialist. It will help you understand the condo fees, financial statements, insurance documents, management agreements, condominium plans, and minutes from board meetings, ensuring that the condo board is well managed.

•  Sale of Current Home

  If you currently own a home, you may need to sell it before buying a new property. While this isn't ideal for the seller due to reliance on external factors, it is possible.

9.    Seller’s Response to Offer

 You have a few options when it comes to the offer: 

• Accept it as is—congratulations, you have a sale!

• Make a counter-offer by adjusting the price, modifying conditions, changing the closing date, or altering inclusions and exclusions. You can then choose to accept, decline, or counter again.

• Decline the offer and walk away.

 We will provide recommendations based on our expertise, but ultimately, you remain in control and should never feel pressured to proceed with something you’re not comfortable with.

10. Firm sold

Once all conditions in your offer are satisfied, you will sign a Notice of Waiver/Satisfaction of Conditions which will be forwarded to the sellers for acknowledgment. This document confirms that you have met the purchase conditions, waived them, and officially have a firm sale!

11. Closing

To prepare for closing, schedule a meeting with your lawyer to review and sign documents about one week prior to the closing date. Additionally, we will conduct a property walkthrough 24 hours before possession to confirm that the home is in good condition and address any issues that may arise.

Closing day is when funds are disbursed to all parties and the property title is officially transferred into your name. We will inform you once we receive the key release, and we will meet you at the property to hand over the keys, typically around noon.

 Closing Costs

• Inspection: $500  

• Mortgage Broker & Realtor Fees: Free  

• Lawyer Fees and Closing Costs: $1,200 - $1,600  

• Interest Adjustment (if applicable)

• Condo Document Review:$400  

12. New home to-do list

• Arrange homeowners' insurance to be effective on the possession date (your lawyer will need this for closing).

• Set up all utilities (gas, electricity, internet, water, and sewer) for the possession date. Establish property tax arrangements.

• Set up mail forwarding through Canada Post to redirect mail to your new address.

• Book movers or a U-Haul.

• Update your address on important identification and billing accounts. 

Let’s Get Started!

I’m here to make your home-buying journey as enjoyable and worry-free as possible. Ready to take the next step?

Contact me today to schedule a consultation and let’s start finding your dream home!