Buyer’s Guide to 2020

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Are you thinking about buying your first house or moving into a new property? I’m going to take you through the entire process of buying a house and what you can expect.

Why Do You Want to Buy a House?

Are you tired of paying rent and want to save up so that you can own a piece of property or are you looking for a property that can give you a little extra income? Are you looking for your dream house before you retire or are you looking for your first home? Before you look at the market, you need to why you want to buy a new house. This will help you figure out how many bedrooms and bathrooms you want, how big you want any outdoor areas to be, etc.

Get a Pre-Approval

Have you talked to a bank or a mortgage broker yet? Pre-approvals happens when banks or credit card companies tell you how much money you can borrow for a large purchase such as a house. Think of this as a house loan. If you’re a first time home buyer, you can get up to a 95% pre-approval (if you have a $100,000 house, the bank will cover 95,000).

Set Your Minimum and Maximum Price

Just because the bank says you can take out a $500,000 loan doesn’t mean you need to spend $500,000. Many people tend to go over their budgets and cannot afford their mortgages on their dream house that doesn’t fit their why. Be clear about how much you want to spend on a house in terms of the mortgage and utilities. When you’re clear about what you want at this step, it will save you a lot of time and money in the future when you’re negotiating prices.

Location, Location, Location

Now that you know your why, your price range, and have talked to your bank or a broker, it’s time to start looking at the type of house you want and where it’s located. What type of community lives in the area? How close are grocery stores, parks, restaurants, and schools? You want to take a look at everything that comes with the area you want to live in, not just the house itself.

Find a Good Realtor

Realtors are going to play a major part in your home buying journey because they’re the expert, which is why you need to find the right person for you. Talk to friends and family who have purchased houses in your area and try to get 2 or 3 referrals before you give anyone a call. Once you book an appointment, remember to ask a lot of questions and find out if they are genuinely interested in helping you out.

Start Viewing the Properties

Once you choose the right realtor, he or she will set you up with automatic emails showing your properties that may interest you. From there, analyze the properties that are available and ask your realtor to book appointments. In the first few weeks, book as many appointments as possible as it will give you an idea of what you like. You may like certain designs in pictures, but not in person.

When viewing the properties, make sure you talk to your potential neighbours about what they like about their neighbourhood, the area, and if there are any issues with the house you’re seeing that the realtor may not know.

Time to Make an Offer

If you’re in a hot market in your city, show you’re passionate about the property and make a conditional offer. Never make an offer with a condition on a home inspection and on the mortgage. You may have gotten pre-approved for a certain amount, but it’s the bank’s final decision on whether they will lend you the full amount. Sometimes, they will value a house at a lower price than the asking price, which means that you have to come up with the extra money.

The Home Inspection and Possible Counter Offer

This is where you will need to be really tentative and involved in each remaining step of the process. Let’s say that the seller of a house accepted your conditional offer. What does that exactly mean? They will be sending you a document saying that the offer was accepted and that you’re now ready to do the home inspection and talk about the mortgage. At this time, if you have your inspector and mortgage broker ready to go, book appointments with both of them. This may take you 3-7 business days to get everything done.

If the inspection report comes back and there a few defects with the house that will cost a lot of money to repair, discuss with your agent as they will know more about this than you do. From there, your agent will start to negotiate with the seller of the house on the price and/or the repairs. You also might need to do a possible counter offer if your mortgage broker comes back with a appraisal of the house that is worth less than what the seller is asking for. If the seller is unwilling to negotiate, be prepared to either have extra money on hand or look for a different house to purchase.

Your Closing Process

Once you’ve agreed to a price with the seller and everything is signed, you will need to look into some final items before moving in. Make sure that you get the house insured through an insurance broker rather than a bank. Make sure utilities are set up and running before putting anything into the house. Finally, a lawyer or broker will give you some documents on what to do before moving in, so follow those. If they need to talk to you at this time, book an appointment as soon as possible to avoid any issues that may come up down the road.

Congratulations! You’re a Homeowner!

If everything has gone through at this point, it’s time to celebrate. You made it through a long journey and finally have the keys to your property in your hand. Take your spouse, kids, family, or friends out to celebrate this new achievement in your life.

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