Buying a House: 6 Things You Need to Know Before You Start Looking!

It’s so exciting and fun to look for a home online. As soon as you start your search, you will undoubtedly begin to see homes you like and love. That will create a sense of urgency to start the process of buying a house.

If you want everything to go smoothly, keep these 6 things in mind and organize them to make the process flow smoothly, without stress and hassle.

Contents

The Deposit

When you make an offer on your new home, you will need to include a deposit with that offer. Your Real Estate Agent will then include the deposit with your offer, and hold it in a trust account, to be applied to purchase later.

The amount of the deposit is not dictated. The purpose is to assure the seller that the purchaser is serious about the purchase and intends to complete the deal if the offer is accepted.

A strong deposit is usually $10,000. This helps make the seller feel confident. Remember that this is applied to your purchase and becomes part of your downpayment for your mortgage.

Some sellers will even ask that the deposit be increased at a certain point along the closing process.

Mortgage Pre-Approval or Approval

This is a very important step. You need to feel confident that the homes you are looking at are within your budget. It can be a very deflating feeling to look at homes you love and not be able to afford them.

It’s even worse if you make an offer and later find out that you can not qualify for financing.

Work closely with your mortgage broker, or mortgage specialist at the bank.

You can usually buy a house with 5% down. If you want to avoid extra costs for mortgage insurance you will need to put down 20% or more. This is something that needs to make sense to you. Analyze your own personal situation and decide what makes the most sense for you and your family.

💡 Tip: If you’re using a bank, make sure to ask for a mortgage specialist. They are more aware of the timelines and implications of future condition release dates, and other things that can come up during the closing process of a home purchase.

Copies of Current Identification

You will need to share your id with your agent. A Driver’s License or Passport (picture id) is the best. Your Real Estate Agent is required by law to record this information and keep it on file and secure.

This is not a huge step in the process – but you also don’t want it to cause delays when you are excited and in the middle of your home negotiation.

Possession Date

At first thought, this seems quite simple. But you are negotiating with a seller, and depending on the circumstances, they may need time to find another home, or move their current belongings.

It is best to keep a minimum 6-8 week timeline for everything to proceed and fall into place before possession day.

Time To Fulfill Conditions

Most buyers need a home inspection and time to finalize mortgage financing. There can also be other conditions, depending on the specific home and situation you encounter on your search.

A home inspection can usually be done within a week.

Final Mortgage approval and release usually can take up to 2 weeks.

A good rule of thumb is to allow 2 weeks in total to release all conditions.

Note: When conditions are released, your deposit is not refundable – so if you back out or run into complications beyond this point, you may lose the initial deposit you make with the offer.

Lawyer

You will need a lawyer, and it is a good idea to have one in mind before you begin the process.

Your lawyer becomes part of your home buying team, and they will coordinate the final process of mortgage, title transfer, and final legal details to make the purchase complete.

Your Real Estate Agent will send the offer, counteroffers, and other documents to the lawyer as soon as the offer is accepted.

Having your lawyer in place will help ease the process and make it run smoothly.

Final Thoughts

It’s one of the most exciting times of your life when you buy a house. Many people also find it stressful. Avoid the stress of buying a house and be prepared before you start.

Tim Bomboir
Licensed real estate agent with Boyes Group Realty Inc. Providing real estate services to buyers, sellers, investors, and those relocating to Saskatoon

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