First Time Home Buyers
May 20, 2008 by David Feld
If you're a first time home buyer, you're probably a little nervous about the prospects of buying a new home. You're not alone. Thousands of people have done it and survived. You can too! The process is actually not that complicated, and if you get organized and make some good decisions at the outset, it should be a positive and happy experience.
The process is simple in theory:
- Find a house or condominium that you like and can afford;
- Sign an Agreement of Purchase and Sale that protects you and that is accepted by the Vendor;
- Close the purchase and move in.
Recommendations
If you surround yourself with a good team, your experience of buying a new home should be a good one. Benefit from their experience and expertise, and allow them to deal with the issues and problems that may arise in the course of finding and buying the right property for you. But it is a little more complicated in fact, and there can be pitfalls, so be sure to check out my recommendations below.
Get Informed
The more you understand about the process of buying a home, the better your experience should be.
Canada Mortgage and Housing Corporation (CMHC) has an excellent publication for first time home buyers called Homebuying Step by Step - A Consumer Guide and WorkBook. I highly recommend it. Here is a link http://www.cmhc-schl.gc.ca/en/co/buho/hostst/index.cfm.
It provides a simple, understandable overview of the process of buying a home for the first time, along with helpful checklists, a glossary of terms that you may not be familiar with, a simple explanation of the agreement of purchase and sale and mortgages, a mortgage calculator, and other helpful information.
Get a good Mortgage Broker
A good mortgage broker will help you find a mortgage that works best for you by "shopping" your financial information to a number of lenders to get the best rates and terms, without any cost to you.
They can also help "pre-qualify" you with a Lender so that you will know how big a mortgage you can get before you submit an Offer to purchase a property. This will help you to set realistic goals about the price of a new home. It may also be very helpful if you find yourself in a competition to buy a particular house because you will know what you can afford and you may be able to avoid using a condition for financing in your offer, which may make your offer more attractive.
Some mortgage brokers are better than others about looking after their client's best interest. We deal with a number of respectable mortgage brokers whom we would be pleased to refer. Just send us a request for referral.
Get a good Real Estate Agent
A good realtor will take the "pain" out of finding the right property in the right location in the right neighbourhood for you.
A good realtor will combine his or her knowledge of, and experience in, the local market with their understanding of your finances, wants and needs, and examine properties listed in the local multiple listing service (MLS) to produce lists of properties for inspection by you.
It is important to understand who the realtor is working for. Is it you? Is it the Vendor? Is it both of you? Ask your realtor about the different arrangements that are possible, and ensure that you have a relationship with a realtor who is loyal to you.
Some realtors are better than others about looking after the best interests of their customers. We deal with a number of respectable realtors whom we would be pleased to refer. Just send us a request for referral.
Get a good Home Inspector
A good home inspector will perform a full inspection (with you present, if you wish) of the home that you propose to purchase, and provide you with a full written report of any deficiencies, defects or problems that he or she observes.
The home inspector does not inspect, or provide any opinion about portions of the property that cannot be inspected easily, such as piping or wiring behind walls, but should inspect and provide their opinion about things like foundation cracks, water leakage, roof, insulation, electrical, water, plumbing, heating, air conditioning and electric systems.
We highly recommend that your offer contain a condition that you be satisfied in every respect with a home inspection to be conducted within a reasonable time following acceptance of your offer by the Vendor.
As with mortgage brokers and realtors, the standards of service and care vary with the home inspector. We deal with a number of respectable home inspectors whom we would be pleased to refer. Just send us a request for referral.
Get a good Lawyer
A good lawyer will attend to all matters, enquiries and documentation to transfer title to the property that you have agreed to buy to you in accordance with the written agreement, and to provide you with assurance of good title (by way of their opinion or most likely, through title insurance). A good lawyer checks for problems with title and the property, and deals with them.
A good lawyer also works well with the other members of your real estate "team" to coordinate the smooth closing of your purchase. This is where F|K shines. Our system is designed to work with your existing team or with the one we can help you create. All this is done seamlessly.
If asked to do so, a good lawyer will draft an offer to purchase a property and include clauses designed to protect the purchaser such as conditions for financing, home inspection or use. This is not a common practice because most offers are drafted by realtors who are trained to do so, however, it is recommended that you have a lawyer review your offer before signing. The cost is nil to minimal and is well worth it.
As with other professionals in real estate, some lawyers are better than others at looking after their clients’ best interests. At F|K, our client’s best interests are our only interest.
