1: Find a trusted real estate agent who loves working with buyers.
Real estate agents in Canada are licensed and regulated professionals who can access information that isn’t available to the public. A good buyer’s agent will be an expert on the home buying process, know the area inside and out, have great relationships with other local listing agents, and will be an excellent negotiator. They will also be a great listener looking to help you achieve your individual goals.
The seller pays all real estate agent commissions in a property sale, so working with a great buyer’s agent will not cost you anything.
2: Determine your budget
Even before you start searching, you should determine how much you can afford, or more importantly how much you feel comfortable spending each month. There are many online calculators that allow you to plug in a few numbers to get an estimate of how much you can comfortably allocate to housing expenses.
Learn the lingo around financing the home purchase:
Downpayment, deposit, mortgage, principal and interest, fixed, open, flexible rates – so many words float around and are often mixed up. When we work together I’m going to make sure you know exactly what each of these means.
Save up for a down payment
This is the amount you pay upfront for your home on the day you close.
Learn about closing costs and get a good estimate for your purchase
Closing costs are fees paid at closing which include land transfer taxes, professional fees to your lawyer plus associated HST, as well as other agreed upon incidental items. Typically, the real estate agent is paid by the seller so you don’t have to worry about that part! You can expect to pay about 1.5-2% of the purchase price in closing costs.
3: Get pre-approved for a mortgage
Not only are sellers typically more willing to accept offers from pre-approved buyers with pre-approval letters, but you will be able to potentially remove the financing condition from your offer, making it easier to get the home you want.
Ask your bank, but be sure to ask your real estate agent for referrals to good mortgage brokers who are able to shop around for the best rates on your behalf.
Once you select a lender, they will ask you for what feels like a huge number documents—tax returns, pay stubs, bank and credit card statements, loan info, investment account information and possibly more. They will then tell you how much you are pre-approved to spend.
BUT a pre-approval doesn’t mean you need to spend that much. Together we can look at various monthly cash flow scenarios and determine what makes sense for you.
TIP: Once you have your pre-approval don’t make major purchases/leases or change jobs without consulting with your mortgage broker. It can change everything!
4: Start looking at homes
Once you’re pre-approved for a mortgage and have a real estate agent you trust, you’re ready to look for a home.
Cast and wide net and then gradually narrow down your search
Needs vs wants
Must-haves vs nice-to-haves
Ideal neighbourhoods and acceptable similar neighbourhoods
These are all part of the conversation we can have together to eventually help you narrow down your search to gradually get closer and closer to “the one”.
Get out and see homes in person!
Pictures and videos only tell part of the story. Trust me (or any agent). There is much more to learn by walking through a property. Bring someone you trust with you to look at homes if you are on your own. Go back a second time if you have the opportunity.
5: Make an offer
Some properties will have an offer date, while others won’t. Make sure you ask your agent about this every home you might like.
When you’re ready, you and your agent will get to work. There are lots of papers to sign and a number of decisions to make. How much of a deposit can/will you make? What’s your preferred closing date? Does it match up with the seller’s? And how long will your offer be good for (irrevocable date/time)?
Once your agent submits the offer, the seller and their agent will review it and accept, counteroffer or decline the offer.
Key tip: If your offer is not accepted, ask your agent to explain why. This is a learning process and will help you make a winning offer the next time.
6: Firm Sale and Closing
Once you and the seller have a signed Agreement of Purchase and Sale, you’ll have a bunch of little things to do:
- Get your deposit to the seller’s brokerage within 24 hours.
- Send your agent your lawyer’s name.
- Send a copy of the signed agreement to your lawyer and to your mortgage broker.
- Mortgage broker arranges appraisal of property (nothing for you to do here)
- Sign mortgage commitment documents
- Obtain home insurance
- Obtain funds for downpayment (minus deposit)
- Walkthrough the property
- Sign closing documents with your lawyer.
- Get the keys on closing day!
If all goes well, your lender will get the money to the seller on time for a smooth closing!!! And then kick off your shoes, pop the bubbly and relax (or unpack).
I'm Liisa and I love helping people moving to Ottawa make their home purchase and transition smooth and seamless. I also love helping sellers get the most for their Ottawa home. Let me know how I can help you make your real estate dreams come true.
613-898-1184 (call or text)