Once you’ve determined that you can already afford to buy a house, it’s time to start the buying process.
You need to know what to expect, especially if you’re a first-time buyer. In Montreal real estate, buying a house can be a very long process, and you also need a lot of patience and determination. Shopping for a new home is certainly not like buying a pair of jeans. You can’t do it on impulse.
So here’s a basic outline of the steps involved when you’re house-hunting:
- Find a house you want to own. This is just the first step, but finding the house you want can take a long while. You can start by looking through real estate listings online and looking at potential homes that match your preferences and budget. You may want to get the word out to your friends and family online, so that they can help with the search. It also helps a lot if you have a buyer’s agent helping you find the homes that meet your criteria.
- Take stock of your finances and secure your financing. Check that you have enough money to pay for the down payment, as well as other costs such as fees and closing costs. Secure a pre-approved mortgage, as this will help expedite your negotiation with the seller. A pre-approved mortgage means that you know for sure just how much of a mortgage you can borrow with your current financial condition. You may want to shop around for the best mortgage lender so that you can enjoy the lowest interest rates.
A preapproval is different from a prequalification, which is simply an approximation of how much of a mortgage you can swing. With a preapproval, you indicate to your seller that you’re serious about buying and you also let them know that obtaining the necessary mortgage won’t be a problem. For sellers who are determined to sell, a preapproval is a great sign that your bid for the house is serious and should be entertained.
- Negotiate with the seller. Your agent can again help you with this part of the buying process. They can advise you on the amount of money you should offer on the house. They can also mention any conditions that can help you along the way. For example, the seller can cover the home inspection fee, or they can cover the closing costs. If there’s a problem uncovered by the home inspection, the cost of the repairs that must be done afterwards may be shouldered by the seller, or they can lower their asking price on account of the necessary repairs.
This negotiation can be a process of offers and counteroffers, and your agent can guide you through. Once you’ve settled a price with the seller, you can then make a deposit and you’re now into escrow. This is about a month-long period when the seller no longer offers the house to others with the expectation that you’ll buy the house if there are no unexpected problems with it.
- Get the house inspected. Your agent can most likely arrange for a trustworthy home inspector to look over your house carefully to see what kinds of issues are present. They’ll then provide a detailed report on the repairs and costs of the repairs. If there’s a serious problem that the seller didn’t tell you about, then you can get your deposit or you can negotiate a lower price.
- Close the deal. This usually means dealing with lots of paperwork, and your agent can again make sure that you deal with various documents properly. The closing stage includes a home appraisal, a title search, and finalizing the mortgage.
Afterwards, you sign the final papers and you move in!