With the information gathered in Part 1, you should have an idea of how much payment you can afford, as well as an idea of what kind of down payment you can come up with.
Get Pre-Approved!
Along with your Realtor and Mortgage Broker or bank mortgage specialist, you should be able to come up with a price range for homes. At this time, you should consider getting a pre-qualification letter from the Mortgage Broker to use as a negotiating tool when working with your Realtor on making offers on properties.
No mortgage lender is actually going to approve you on a mortgage without first appraising the property in question. Depending on the property, this can be a very fast process, once you have the pre-qualification completed. Being able to place an offer on a property without a financing condition can make your offer considerably stronger than a competing offer without one.
Some factors also need to be considered at this stage. If you are looking within the City of Toronto, you will need to pay a municipal land transfer tax on top of the provincial land transfer tax. Rebates are available on the provincial and municipal tax for first-time buyers. You also need to budget for legal fees, moving costs, and other costs relating to your new home - including furnishings, decorating, etc.
Start Looking at Homes
You can now have your Realtor search for properties within your price range, that also meet your needs and wants for a new home. Some things to consider may include distance to work and schools, quality of nearby schools, neighbourhood amenities and proximity to family and friends. For the home itself, things like number of bedrooms, bathrooms, kitchen layout and cabinetry, yard size, parking, curb appeal and more come into play. If you plan to do lots of entertaining, things like dining space and patios can be important, as well.
You will likely find tradeoffs when looking at homes in different areas - a similar home that is closer to the city may cost considerably more than one farther away, or in a lower-demand neighborhood. Your Realtor can help in putting things into perspective. You may not be able to get everything you want within your price range. It's important to prioritize your needs and wants so that you can remain objective when making choices.
When you start actually viewing homes from the ones you have reviewed with your Realtor, take time to review all of the criteria that you established before. While the home itself may seem ideal, don't forget to factor in the neighbourhood and community criteria. Your Realtor will point out things that may be of concern with the structure and finishings. Some things won't be apparent on a walk-through and are best covered through the use of a professional home inspector.
Make an Offer
If you decide to make an offer on a home, your Realtor will normally recommend the inclusion of a condition that the home be inspected and the report meet your satisfaction before your commitment to purchase becomes final. There are several documents that you will need to carefully review and sign during the process. Your Realtor will help to explain all of these in detail, before asking you to sign anything.
One of their most important responsibilities in representing you as a client, is to ensure that your best interests are always put first, and that they are always honest and straightforward in everything they do with you. A good Realtor knows that their business relies on repeat business and referrals. They really do want you to be a happy buyer, and that your first and every realty experience is a good one.
I would be pleased to help you with your home buying experience. Please contact me anytime if you would like to explore buying your first home, without any pressure or obligation.
