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Are you ready to buy a home in today’s market?
Dated: September 2 2021
Today’s real estate market is constantly changing. Sometimes, to buy a property, you have to act quickly. Are you ready to buy a home in today’s market? Go through this checklist and see for yourself.
1. Find a real estate agent you trust and who knows the market well
A competent and knowledgeable agent will provide you with valuable information on the market’s conditions, recommend properties according to your criteria and show you some that are not yet available to the grand public. The agent will use comparable sales to determine whether a house is worth the asking price and will help you prepare your offer and counteroffer if applicable. In the event of hiccups, he or she will be there to help you resolve them. An agent can also recommend other professionals you will need for real estate transactions such as lawyers, mortgage advisors, etc.
A trustworthy agent will make sure they understand your financial, family and work situation, your wish list, and anything else they judge appropriate to make sure your home search and your buying process go smoothly.
2. Get pre-approved for a mortgage
Picture this: You visit houses and you come across THE house. Nothing else compares to it. You make an offer; the buyers accept it. Soon after, you find out that you don’t qualify for the mortgage you need. Disappointed is just the tip of the iceberg of emotions you are feeling.
How can you avoid this disappointment and the risks that come with an offer without financing conditions? With a mortgage pre-approval, you can set realistic expectations towards the market.
3. Set a budget
Following-up on the mortgage pre-approval, set a budget that is equal or lower than your pre-approval amount. When you calculate your budget, be sure to include all the expenses related to buying and maintaining a property such as lawyer fees, land transfer tax, utility bills, property taxes, etc.
4. Prepare the funds for the deposit
A deposit is required when we buy a property. That deposit must be provided immediately after the offer is accepted. It is cashed by the sellers’ lawyer soon after. The deposit’s funds are generally used to pay the closing costs or subtracted from the down payment.
The deposit amount typically represents 1% of the transaction’s value although it is common nowadays to see deposits of $10,000 to $20,000.
5. Be prepared to visit homes quickly
A good rule of thumb when a house goes on the market is to make ourselves available quickly to view it, because we never know when it will sell. A few tips: have someone on call to babysit, talk to your employer and see if you can modify your work hours, and make any other arrangements that will help you plan and get to a showing quickly.
6. Be prepared to make an offer/counteroffer quickly
Today’s market is not one where we can visit the same house a second or third time several days (or weeks) later before deciding to put in an offer. In many cases, buyers must make their decision within a day or hours following the initial visit. Be prepared for this scenario.
Talk to your agent about the strategies you will use. Most importantly, make sure you can sign the documents quickly. In the event of bidding wars or counteroffers, you may only have a few minutes to make a decision.
7. Make sure you have all the necessary funds for the closing costs
The price of buying a home doesn’t stop at the amount in your purchase offer. You also need to set aside funds to pay the closing costs such as the land transfer tax and the lawyer’s fees. These expenses are not part of your mortgage.
8. Find a real estate lawyer
A lawyer specializing in real estate law is required for any real estate transaction in Ontario. From providing advice during the transaction, to preparing and reviewing the legal documents and making sure you receive a clear title to the property, a lawyer protects your rights through the process.
This article was written in September 2021 as the Ontario real estate market was on the rise. The information may no longer be relevant at the time you are reading it.