Home buying is a daunting task for people who have been through the process before. If you are a property virgin the learning curve can look like Mount Everest. But if you start at the beginning, and take it step by step, before you know it you’ll be schlepping boxes into your new house.
Round up your cash. As a new buyer, you will need a minimum of 5% of the total purchase price of your new house as a cash down payment. You will need another three to seven thousand dollars for extras like legal fees, appraisals and home inspections, utility deposits, paint and fix-its and moving costs.
Get preapproved. Talk to your mortgage specialist and provide them with all the payslips, credit details, co-signors and other information they need to determine how big a mortgage you can have.
Once you are preapproved you can tell your real estate agent how much you can afford to spend on a house. Now the fun stuff starts. Look and look and look. Eventually you will find the right place. I promise.
When you have found the right place, your real estate agent will help you put in an offer. You will need to provide a deposit check for a percentage of the price, as proof that you are serious.
Next comes the negotiation stage. You might go back and forth about price. Are the appliances included? This is important if you don’t have a couple thousand extra for a new fridge and stove. How about the curtains? You can ask for them, and the sellers might throw them in to seal the deal.
Once the deal is agreed on, you need to get a home inspection. You have to pay for this out of your own pocket. It could be anywhere from $300 to $700, depending on where you live and the size of the house.
If you are buying a condo, your lawyer will be reviewing the condo documents while the home inspection is going on. It’s really important that the condo corporation is fully funded and well run.
If everything is good your lawyer will ask the mortgage company to advance the funds for the purchase. Over the next few weeks there will be a lot of paperwork you need to sign, for the mortgage and to register the title to the property.
Finally, you will need to get property insurance and call the phone, cable, hydro and gas companies to set up your accounts.
Don’t forget to arrange for a few friends to help you out on moving day. Plan to buy pizza for everybody, because it’s guaranteed you are going to be too tired to cook dinner that night.
When it’s all done, your lawyer will send you a bill, so be prepared. This could amount to a couple thousand in legal fees, costs for surveys or appraisals, registering the title and title insurance. Your lawyer will be able to give you an estimate before you start.