Step 1: Get A Pre-Approval
This is an important step that is overlooked too many times by buyers;there are several reasons for getting preapproved before exploring other steps.
Firstly, you’ll find out how much you can afford by the approval amount given to you, which will impact your search and the type of home you will look for. Be careful not to let the lender push you into a monthly payment you don’t feel comfortable with and make sure to shop for rates so you know the lowest rates that are being given so you go informed. You can also ask an experienced realtor like Pouria Ansary what the current rates are going for, as they deal with many transactions on an ongoing basis and constantly see how the rates fluctuate.
Logically the lower your amortization period the lower interest you will pay in the life of the mortgage. Accelerated bi-weekly payments are also beneficial in lowering the interest amount you will pay in the life of the mortgage. Otherwise there will be no difference in making payments on a monthly, bi-weekly or weekly basis.
Getting pre-approved means the lender has looked over your credit and financial statement and agreed to lend you the money. This will help in the negotiation process of the home as the mortgage condition of the promise to purchase becomes a non-issue and therefore there’s less risk the deal won’t go through.
Note if you don’t put a 20% down payment, the lender will require a mandatory insurance (CMHC, Genworth, Canada Guarantee) that can typically cost you an extra 1-3% . It’s worth mentioning that this sum is not required right away and will be added to your mortgage principal amount so you won’t feel it until you sell or pay off your home.
Also When budgeting, consider your closing costs. Some common closing costs include: notary fee, title insurance (in case the title proves faulty), appraisal fee (for the lender’s benefit, not yours – to make sure you’re not overpaying with their money),
home inspection, partial property taxes , welcome taxes. Depending on the value of the property the total can typically range between 4,000 and 10,000 dollars.
Pouria Ansary works with a range of professional mortgage representatives who have the most competitive rates on the market and can make this process as smooth as possible.
Step 2: Hire Your Agent
There are many real estate brokers you can choose from;however good brokers will always put the needs of their clients first. You and the home or property you will buy becomes your realtor’s top priority.
Here are the qualities to look for in an agent:
-Educating you about the current conditions of the market and how it is evolving
-Analyzingyour needs for the property you want to purchase
-Be reputable and professional with other brokers with whom he may co-ordinate throughout the process.
-Showing youproperties that fit your criteria and budget.
-Negotiating on your behalf to get you the best deal possible.
-Be experienced so he can understand the contract and legalities perfectly in order to put in the required clauses to protect you.
-Knowing and overcoming potential obstacles that may arise
Step 3: Find Your Home
Now that you’ve hired the right realtor, you can start looking at homes. There are many homes out there and it can be overwhelming, this is where your agent comes in and filters them out based on your criteria. The right home will meet all your important needs and your agent will make sure there will be many bonuses.
Some Important questions your realtor will ask you are:
-What amenities are crucial for you and your family?
-How much space do you need and why?
-Which is more critical: location or size?
-Would you be interested in a fixer-upper?
-How important is short-term home value appreciation?
-What features are not negotiable in your new property?
You’ll learn as you look at homes, your wants and priorities will adjust along the way.
Step 4: Comparables and Market Value
Find out what houses or properties are selling for in the neighbourhood you’re looking at and how much you should pay. We always look at selling prices – not asking prices. You can get these from a realtor like Pouria Ansary.
Your realtor should have the ability to price the property you are looking at and adjust it to current market value through those comparables and his own experience.
For commercial and revenue properties, it works a little differently. Pouria Ansary has gained the required skill sets to appraise the property based on its state and the type of property as well as analyzing the financial statements, the revenues and growth potentials associated to the property. Having majored in Accounting, and doing this for countless properties he’s closed, you can be confident in his abilities to do so.
Step 5: Make an Offer
Once you’ve found the home or property you love, the next step is deciding on a price based on the comparables you will look at in step 4. Look to your agent to explain and guide you through the process and he will move forward in the negotiations to ensure you get the best possible deal.
Some things to consider when deciding on the best price point are:
-List price – Start with the price point that the home is listed at. This will give you a base although quite often (though not always) prices are listed higher than the market value.
-Market Analysis – Your agent will give you an idea of comparable home values in the neighborhood to help you decide if the price point is on par.
-Improvements – Your agent can give you a list of improvements made to the home and help you determine its market value.
Step 6: Perform Inspection and Due Diligence
Typically, purchase offers are contingent on a home inspection of the property to check for signs of structural or foundational damages or anything else that can significantly reduce the value of the property or repairs that will be required.
Your real estate agent usually will help you arrange to have this inspection conducted within a few days of your offer being accepted by the seller. This contingency protects you by giving you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage.
You will receive a report on the home inspector’s findings. You can then decide if you want to ask the seller to fix anything on the property before closing the sale or compensate you for the repairs in order to do it yourself.
Your realtor will walk you through the best avenue given the circumstances and provide you with improvements and challenges within your home. This way you’ll know what you are getting into before you complete the purchase so you can make an informed decision.
Very often a problem appears to be big, but can be fixed with very little effort and not a huge budget. Your main concern is the possibility of structural damage, which can come from water, shifting ground or poor construction. These issues are sometimes irreparable and/or can be very expensive to repair.
Step 7: Finalize your Mortgage
Finalize your mortgage with your lender and get them to “lock” your low rate until the closing date. Generally, if you close within 30 days of submission you may be able to get a lower rate, though this is case by case.
Often, mortgage lenders attempt to cross-sell you products as a condition to provide you with a better rate, you should know that there is no requirement on your part to acquire any other products except the mortgage and your rate should not fluctuate as a result of this.
Make sure all documentation required from you by the lender is given right away in order to ensure you get the mortgage letter within your delays to avoid any potential issues that can arise if you don’t meet your deadline.
Step 8: Call your Notary
Your notary ensures the smooth transition of the sale and makes sure all parties are protected. The buyer should generally choose the notary; your realtor should have a few notaries that he works with to whom he can refer you.
Typically the notary will:
-Review the promise to purchase and all other relevantdocuments in the vendor’s possession
-Perform a title exam, in order to guarantee that titles are clear and the vendor is the rightful owner
-Examine the certificate of location to confirm dimensions and make sure the property conforms to the municipality’s by-laws
-Verify that the municipal and school taxes have been paid and calculatethe adjustments between the buyer and vendor.
-Ensure that you have obtained adequate home insurance and that
your mortgage creditor is designated as a beneficiary of your policy
-Communicate with an administrator from the condo association (if
you are purchasing a condo unit) to verify the documents pertaining to the association
•Draft the Deed of Sale with the care and attention to detail that
characterizes all his/her work, putting into this document all the
clauses essential for the protection of your rights
• Communicate with your financial institution (if you are taking a loan),
receive and review the loan instructions, draft the deed, request the funds, etc.
Step 9: Close
You will have 2 visits to the notary before the final closing, the first one takes place a few days before closing in order to disburse the mortgage and the second visit will be the actual closing. This is the final step before you become a homeowner. You must show up at the closing and sign the documents. Don’t forget to bring lots of blank checks: you’ll usually have to write separate checks for each of the closing costs.
Once you sign you can now enjoy the freedom of not paying rent into someone else’s bank account, Congratulations!
Step 10: Protect Your Asset and make sure to keep its Value
It’s now your responsibility, and in your best financial interest, to maintain your home in order to protect your asset. Performing routine maintenance on your home’s systems is always more affordable than having to fix big problems later because the property was neglected. Be sure to watch for signs of leaks, damage and wear.
Pouria Ansary takes great pride in maintaining his relationship with his clients, remember after you buy, your realtor can still help you – providing information on the real estate market, finding contractors and repair services, and giving you a track on how the price of your home is evolving.
You are now a proud homeowner!