Understanding the Home Buying Process
Dipping a toe into the real estate market can be both exciting and terrifying for a new buyer. What is the process of buying a home? Each step may be more detailed than the last, but this post is here to help with things to know before buying a house, from choosing a neighbourhood to getting a mortgage.
Figure Out Costs and Set a Budget
If you're wondering how to start the home buying process, one of the first things that home buyers need to do is consider costs and set a budget. The price of a home can vary significantly from location to location, with big, expensive cities like Vancouver and Toronto skewing the national average. Home buyers may not need to have a 20 percent down payment to get a mortgage. There are mortgage options for people who can put as little as 5 percent down, depending on the size of the loan and other factors. Buyers should attempt to secure mortgage preapproval before they start shopping, as this will give them a very clear idea of what they can reasonably afford.
Identify Professionals to Help
Another important task for buyers is identifying and engaging the services of various professionals. Buying a house for the first time can be confusing, and it really is a big investment. A lawyer can ensure that they are following all the steps correctly. A real estate agent can negotiate terms in the buyer's interest.
Find a Home
Searching for and finding a home or condo in Calgary may be exciting, but it is also one of the most time-consuming parts of the buying process. Home buyers, particularly if they are buying a home together, should invest effort into determining what they want from a home, including:
- number of bedrooms and bathrooms
- available amenities
- proximity to shopping, dining, and entertainment
If people have all these preferences sorted out before they start looking, they can avoid wasting any time visiting properties that do not meet their needs.
Make a Purchase Offer
Once buyers have chosen a home that they would like to buy, they engage their real estate agent to help make a purchase offer on their behalf. Purchase offers are legal documents that, once agreed upon by the seller, create a formal contract for the sale. The purchase offer should include:
- how much the buyer offers to pay
- an earnest money deposit
- any home buying contingencies the buyer must satisfy before closing the sale
- deadlines for each step of the process
The seller, with input from their agent, can accept or reject the offer, or make a counter-offer. In the instance of a competitive real estate market, it may result in a homebuyer needing to offer more concessions than anticipated.
Complete the Home Buying Process
Once the offer is accepted, the buyer only needs to resolve each contingency and complete the sale. These last parts of the buying process may include a home inspection, obtaining a title report, finalizing all mortgage paperwork, and then signing documents to transfer ownership. But how long is the home buying process when you get to this point? Although this part may seem fairly simple, it can take the longest. Buyers may need as long as two months to check every item off the list. Some Coventry Hills home purchases could take less time, but it depends on the number of contingencies, and how difficult they may be to finish.
Buying a home is one of the most complicated things that a person will do in their lifetime. With a better understanding of each step of the home buying process, buyers know what they will have to do in order to buy real estate and take ownership of the home they want.