Steps Involved In The Process Of Buying A
Home
 You
may have your own list but this list is a
basic set of steps you should consider when
you begin the process of searching for a
home to purchase.
Determine what
you can afford. Visit your banker or a
mortgage broker to determine what your
income can support. Consider the total
budget for your lifestyle and determine if
you wish to spend all you are allowed, or
leave yourself some room for other things.
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Determine the
costs. These include the down payment,
legal fees, land transfer tax, costs of
processing the mortgage, fees for high ratio
mortgage, survey or title insurance, extra
furniture or appliances, decorating or
repairs, moving costs.*
Define the right
house for you. Do not assume this is your
last and best house. Chances are you will
buy again as your needs change or as your
finances change. Define your needs on a 5
to 7 year horizon.
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Your definition
will include location, type of home (semi,
condo, investment, detached), school and
transportation issues, size of home, number
of bedrooms, garage and any other features
you feel are important to you.
If you already
own a home, you need to decide what approach
you are going to take. Are you going to
find a suitable home and then put your
existing home on the market, or, are you
going to put your home on the market while
you look for the right home. Either
approach is acceptable. Both approaches
have disadvantages. Discuss this with your
Realtor.
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Select a Realtor
and Develop a Strategy
This should be
the first step, but it sounds self-serving
to put it at the top. A Realtor can walk
you through the steps above and make these
decisions so much easier to handle.
* If you are a
first time home buyer, spend extra time on
this topic and speak at length with your
banker or mortgage broker. It is important
to note that you must have at least 5% of
the purchase price in the bank before you
buy, plus the costs of closing the
transaction. Failure to have these funds in
advance will likely mean you cannot get your
mortgage approved, no matter your income or
credit rating.
Why
Should You Use Your Own Real Estate Agent
When Buying:
The Buyers of
this millennium are much more sophisticated
than ever before. Consumerism is requiring
all businesses to be much more open and
sensitive to the needs of today’s customer.
Real Estate Council of Ontario has made some
major steps in this area.
In the past, when people
saw a sign on the front lawn of a home, they
called the agent, inspected the property,
and, if they liked it, asked the agent to
prepare an offer for them. After the sale
some people found that there were things
about the house they had not seen nor had
they been told of. Upon investigation, they
discovered that the Realtor was under
contract to the Seller and therefore was
obligated to protect the Seller’s interest
by not revealing anything that was not
required or asked.
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To counteract this, today’s Buyers have the
option of hiring their own Realtor to represent
them in the search for a suitable home. The
contract they enter into is very similar to the
one the Seller has. That is, the Realtor is
required to protect the interest of the Buyer
and to be sure all of the disclosures are made
and all of the questions are asked, that will
make for an informed decision. Further, to make
it even more appealing, the Seller pays.
This arrangement is called “Agency”. So, we can
have Seller Agents and Buyer Agents. This makes
for a more comfortable arrangement for both the
Seller and the Buyer.
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To be fair, it must be pointed out that in most
situations where the Seller’s Realtor handled
the sale for the Buyer there were no problems,
however, there were sufficient that changes were
made. The new process is in place for those who
simply have a preference to be formally
represented by their own Realtor.
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It is my personal recommendation that all
Buyer’s enter into an agreement with their
agent. Life is better if you do!
Sometimes, we have the Buyer Agent faced with
selling a home has been listed by their own
office and the Agent is therefore acting as a
Seller’s Agent as well. This is called “Dual
Agency”. It sounds complicated but speak to
your Realtor about it and you will find it
really doesn’t have to be.
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Ask your Realtor for a brochure called “Working
With a Realtor” This Ontario Real Estate
Association document goes into this business of
Agency further.
How To Choose An Agent To
Help You Purchase a Home
Selecting an Realtor to help you Purchase has
many of the same considerations as when you
decide with whom you are going to list your
home. Once again, this step is perhaps the most
important decision of the whole process for if
you have a Realtor that you are comfortable
with, you will find the whole process much less
stressful and the decisions easier.
As this is probably your biggest single
investment - real estate - you need to be sure
you have confidence in the person with whom you
are going to work. If you checked out the
information elsewhere on this web site entitled
“Why You Should Use Your Own Agent”, you will
see that you really should have someone who is
dedicated to your interests. If you know
someone you trust with this project, speak to
that person and get some information about their
approach, and, if you are satisfied, enter into
a “Buyer Agency” contract with them. If you are
not sure, the following tips may help you.
Ask around for who your friends are using or
have used and get recommendations on who you
might choose. Ask them why they like the person
or what happened that they didn’t like.
Interview at least 2 Realtors to
have them describe what they will do for you in
specific terms. The key here is to understand
the Realtor’s approach and see if it matches
your need for assistance. Look for a helpful
and supportive attitude. Your needs and your
timing should be a priority for the Realtor.
Ask the people you interview
for at least 3 references:
Have the Realtors explain the
costs involved in buying a house and get some
idea of how informed they are in terms of the
price range you are considering. |
