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In short, you’re going to follow the steps below, and at each point you need to ask lots of questions of any professionals involved to make sure that you’re not getting in over your head. I’ve made a YouTube Playlist outlining the process that you can watch,
(free to watch, and doesn’t gather your information).
Make three lists of home criteria:
What you need
What you want
Speak to a few lenders, including your bank and mortgage brokers. Have all of your income and liability information ready and ask lots of “what if x happens?” type questions. For example, what if I want to pre-pay, what if I get a job in another province and want to sell, etc?
Get a pre-approval from your lender. This isn’t a firm commitment (you’ll need that later), but at least it tells you the price range that you can comfortably afford.
Speak to a few Realtors, or not. It’s possible to buy unrepresented). If you work with one, choose someone who:
Is experienced, but not so busy that they’re going to ignore you and treat you like a transaction only.
Is organized and a great communicator who can communicate on your preferred channel (whether that be email, text, WhatsApp, etc).
Has strong references and reviews, ideally from friends or family of yours who were also first-time homebuyers, or from their Google or online reviews.
Has knowledge and experience in the areas that you are interested in moving to.
Works full-time as a Realtor.
You may find it helpful to have a list of interview questions
. I didn’t make this list, but it’s solid.
Is personable, but frank and direct. You’re going to spend a lot of time with this person and are putting trust in them, so make sure that you have a good connection.
Is clear about what you’re committing to when working with them. Don’t sign any paperwork until you’re comfortable with what you’re committing too.
Home Search and Offer
Get your Realtor to set up a search portal for you based upon your criteria. Good portals will have ways for you to comment and refine your search alongside your Realtor, so that they can get on your wavelength and point out places that you might overlook. They will also let you access sold prices. If you’re searching on your own, use Realtor.ca
or another public portal, depending upon your province. Some public portals will also let you see past sold prices.
Start looking at homes that fit your criteria. These can be a mix of visits with your Realtor and visits to open houses. By the way, if your Realtor ever tells you to ask a listing agent to show you a house because they are “too busy,” consider firing your Realtor. Think of the search process as a narrowing down process. There might not be a “perfect” house, but there is probably one that fits all of your needs and some/most of your wants in your budget.
Sign Buyer Representation Paperwork with your Realtor once you’re comfortable with them and the paperwork. It protects you as well as the Realtor by spelling out your obligations to each other.
Offer on a home that meets all of your needs and as many as your wants as possible while still being within your budget. Make as much of a data-driven decision (using recent past sales of comparable properties) as possible and decide upon a strategy beforehand. Lean on your Realtor here for data, writing an offer that protects you, and removing the emotion from the negotiation. This is where they should be earning their commission for you.
Negotiation and Due Diligence
Negotiation starts once the offer is received. Have a plan for what you’re going to do if the Seller counters. Know your top price/terms and stick to them. In general, I recommend negotiating as if the home will have a reasonable amount of work/repairs to be done rather than assuming it’s perfect and trying to renegotiate later after the inspection.
Once your offer is accepted, if it has conditions you’ll start working to fulfill them. Most typically these are:
Review of Status Certificate (condo/strata only)
If issues come up during the conditional period, you may choose to renegotiate if you feel that these are serious or costly enough.
Once conditions have been fulfilled, you move on to the final stage, which will generally feel calmer and less stressful than 2 and 3.
In most cities, a 30-90 day closing from time of offer seems to be “typical,” though there’s no set rule.
Use the time during the firm purchase to arrange your move, including arranging utilities on your new place, notifying your landlord and booking movers (or a truck). Consider hiring a moving broker so that you get connected to reputable movers. There are a lot of mover scams out there.
If you haven’t yet, you need to hire a lawyer in most Canadian provinces. Ensure that they have all of your documents for the purchase. They will need to meet with you once or twice before closing to sign paperwork.
On closing day, check the fixtures and appliances as it can be quite difficult to pursue a Seller for issues after a sale has closed.
Good luck on the purchase! This is a very brief list, but covers the key points. Let me know if you have any specific questions.
Source: I’m a Realtor in Ottawa, Ontario. My team and I work with quite a few first-time homebuyers so this is familiar ground.
3 Common Ways that First-time Homebuyers Stumble
Buying more than they can afford. Remember that you’re going to live in the month-to-month mortgage payment, property taxes and utilities. Make sure that you have enough to afford this and then some, in case the rates go up.
Buying finishes, not the location. Finishes fade, but a great location will always be valuable.
Only considering move-in ready homes. Yes, this is a lot more convenient and money is often tight for first-time homebuyers, but consider taking on some work in a home that has a great location and layout, especially if these are cosmetic-only issues that don’t affect the longevity of the house or the utility.