First Time Home Buyers Guide

1. Conclude If you are ready to buy

Buying your first home will be one of your biggest investments of life. Even though decision is big, it should be executed as early as you are financially ready. As no matter how you look at it, buying is definitely a better option then renting. Read our full comparison of reasons to buy vs rent on our report called STOP RENTING.

2. Make sure if your down payment is ready

Once you are mentally ready for this commitment, now you need to look at it practically. Lowest amount of savings you will need is 6.5% of your purchase price i.e. 5% down payment for your mortgage and 1.5% is always desired as a rough estimate for closing costs. In simple maths, If you desire to buy a Condo of $225,000, you shall have approximately $15,000 already saved before you go to next step. Even though larger down payment is always advised, but unless you have a proper set savings plan in place which is strictly bound by a specific time with monthly savings from your side, you are just wasting your time and money by delaying your decision and staying on rental.

3. Hire a Professional Help

You since you are mentally and practically ready, you shall now find professional help i.e. create a team to help you complete this project of hiring professionals like Mortgage broker, real estate agent, home inspector and lawyer. You don’t need 10 professionals in same trade…..One dream, one team is the way to go. Real estate agent you select will become an expert on your specific needs and tastes. Scattering your time and energy amongst multiple REALTORS© will only work against your goal of finding your best home as none of them will take you seriously. And because most real estate agents have equal access to the same property listings, there’s no real advantage to having multiple non committed REALTORS©. One committed REALTOR© will work in your interest and many times they can always advice you on various other good professionals required in this team like Mortgage brokers, Lawyers, home inspectors etc., if you request for them. For example, there are 1000s of Mortgage brokers and mortgage lenders in the city but how many of them can actually help you if your case requires few reasonable exceptions to considered by mortgage underwriters? Likewise, there can be 1000s of home inspectors, who is the right one for property like you are looking to consider? Leverage the experience and connections of your REALTOR© who will help you connect with other experienced and proven professional choices to help you select one team to help accomplish your goal.

4. Choosing the right real estate agent

Take your time to select ONE REALTOR© with whom you are comfortable and is knowledgeable in the market you desire to buy in. There are 1000s to choose from but how will you make sure, you are choosing the right one. First and foremost, you have to let go the ones who are not even full time in this profession as full time Realtor only means professional and experienced representation. Secondly, you shall research about them over the internet in terms of their reviews and testimonials. Just search their full name on any search engine and first few pages shall show all good, bad or ugly about them. Once you have shortlisted 2-3 of them, you shall now meet with all of them to interview and select the one you like the most.

5. What is the Size and Type of property you should buy?

Next step is to decide on Size and Type of property you shall buy. Every one desires to live in a 5000+ SqFt mansion or top of the city penthouse with private elevator but practically speaking, if you can’t afford it, you are only adding one more hurdle to this decision. You have to distinguish between needs and wants. As most important need is to get something of your own which is sufficient for your next 5 years of housing requirements. As you family needs will change and if they will change, you can always upgrade. Remember, more you delay this decision because of your desire to buy bigger and better……more expensive it will get to accomplish your dreams. Once you buy something reasonable with proper guidance, it will appreciate and get paid down to help you prepare for your dream home as your next step, as and when you are ready.

Your REALTOR© can help you with this process too by helping you get some insight between your affordability and desires by helping you show you what is available within a specific criteria of selection and in which area or city.

6. Start the Viewing process

Now since you are ready with your team, you are ready to go to next step i.e. finding your dream home! This starts with viewing few shortlisted properties meeting most of your criteria of selection. Remember and underline, it may be the very first house that you may fall in love with or it may take you 50 houses….there is no right and wrong approach here. You shall analyze each property you view with open mind. If the very first day you end up liking one of the houses or condos you saw, you shall take it seriously and ask your REALTOR© to get on it right away before it slips out of your hand and then you keen comparing every next property you see with the one you missed. If you like something, there is no reason to leave it on table for others.

7. What is right amount to Negotiation?

Once you have selected the property, negotiation process starts. Fact is that all buyers want to pay the least and all sellers want to sell it for the most. So where is the balance in this equation? Ask your real estate agent to work on a negotiation strategy and do some comparative market analysis to help you conclude if the property is priced right, is over or under priced. Once this is concluded, your REALTOR© will try to negotiate the property for you, as much as practically possible keeping general appraised value and your target price in mind. This is one of the biggest hurdle to cross as both sides want MORE. An experienced REALTOR© expertise in negotiations and will try to help you accomplish best results. As you have ONE dedicated real estate agent, you are assured a professional representation with full loyalty.

8. Meeting the Conditions

Once above hurdle is crossed and agreement is signed by both parties, most of the time you will need to put down a agreed upon deposit as agreed within the agreement. At this time, mostly contracts are conditional to get firm finance approval, home inspection, status certificate or survey etc. These conditions are to be met within specified number of days else deal is void and deposit is returned. If all conditions are fulfilled, then a written acknowledgment/waiver to be send from buyer to Sellers in order to firm up the transaction closing on agreed upon date.

9. Important things to remember before closing of Transaction

Once deal is firmed up, file is handed over by your real estate agent to your assigned real estate lawyer to prepare for closing. You shall try your best to maintain your financial status as it was provided to your lender. Many people do mistakes of changing jobs at this time not realizing that their lender have approved them on specific job and financial status which is expected to remain the same till closing. This can create big complications so is an important thing to remember. Many home buyers get carried away and start applying for more credit to furnish their home and hence change their financial status by increasing their financial obligations. This is also something which may not be acceptable to your lender. Best is to try and maintain your same status as on date of approval till closing date.

10. Closing of Transaction

Final step is closing the transaction which is done between the lawyers of both sides. Your lawyer will be responsible for settling the transaction between all parties involved and registering the property in your name. They will asking you to deposit balance of the funds required for your down payment, closing costs and adjustments if any. Once that is done keys and money exchange hands between the two lawyers on the same date and you are where after advised, to come and collect the keys.

11. Avoid moving on same date

Try to always avoid moving on same date as closing as sometimes things are beyond lawyers control whereby they have to close the transaction morning after. In such event, if you have already filled up your truck for moving and it was the last date to vacate your existing property, you now have no where to go! Kind of crazy but it can happen. So it is always advisable to keep few extra days cushion between closings. Even if you are selling your existing house your experienced real estate agent can help you by trying his/her best to get you closing with few or atleast one day difference to make this transition simpler for you.

12. Now is the time for Renovations if any

You may have thought of making few changes and improvements to your home right away. That old carpet may have to go, or few rooms need to painted in colours of your choice. It is best to firstly make sure you have made financial arrangements for these renovations. Don’t over stress your finances as else you may end up in a bigger mess. This is also where your real estate agent can help as experienced ones will either have strong connections with renovation contractors and or if the amount required for renovations is larger, can make arrangements to make it part of your mortgage with help of your mortgage broker.

If you have completed 1st two steps or have any questions about home buying process, please feel free to complete the form below:



NOTE : We DO NOT share your information with any 3rd party. You are consenting to receiving e-mails from us by entering your information in the form below.

Name *
Phone Number *
Email *
Planning to Buy
Planning to Sell
Security Code

* Mandatory Fields