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8 Step Guide to Buying a New House

Posted by : on Jul 04,2022 11:09 AM
8 Step Guide to Buying a New House

Acquiring a home should not be done without a minimum of organization and preparation. During your buying process, you will go through different phases. Each of them requires choices to be made and steps to be taken. Here is a guide to the 10 stages of the new home buying process.


The 10 Steps of the New Home Buying Process


Your decision is made, and you go ahead with purchasing a new property? Get ready to tackle this exciting but sometimes daunting process by familiarizing yourself with the 10 big steps to buying a home presented below:


1. Determine your budget


Before you begin your search for your dream home, you must first determine your budget. Several factors come into play here: your down payment, your family income, your current debts, and associated monthly payments, your estimated fixed costs related to the home(property taxes, electricity, mortgage payments, utilities, etc.), and the closing costs and your lifestyle.

Your down payment is your savings minus the emergency fund for contingencies, which should allow you to live without income for three months.

You must also consider your borrowing capacity. Banks use several calculations to determine it, including your gross debt ratio (TER), which is the portion of your gross annual income spent on your mortgage expenses. The RET should not be more than 30-32%.


2. List your criteria (needs, sector, number of rooms, etc.)

Once you have determined your budget, establish your selection criteria. What are your needs? In which area would you like to live? How many bedrooms do you want? Prioritizing them will also help you make an informed decision when the time comes.

Your criteria will allow you to evaluate the type of property that best meets your needs and desires. For example, if you want to have your aging parents close to you, buying a multigenerational home could be ideal. If proximity to the city center is your primary criterion, a condominium apartment has great advantages.


3. Shop around for your mortgage

Having a pre-approved mortgage before you start your search will allow you to act quickly when you find the property of your dreams. This is especially important in today's competitive market.

Different rates and types of loan are available, so it is important to compare them carefully to make the right choice, according to your needs. Using the services of a mortgage consultant can facilitate this process. Did you know that you don't have to pay the mortgage consultant? Rather, it is the lender with whom you will contract your mortgage and pay it in the form of commissions.


4. Choose your notary

The notary will play a key role in buying your house. He can help you write the purchase offer and review and exchange all the important documents for the purchase of your property. The buyer often chooses the notary, but the seller can also decide to bring in his own notary. Regardless of the professional who will be chosen, the law requires that he be impartial and independent.


5. Start researching

After determining your financing, your criteria and having surrounded yourself with professionals, it's time to search for the perfect home. Even if the decor of a property seduces you, remain attentive to details such as the finish, the noise, the luminosity, the foundations and the warning signs such as traces of vermin, water infiltration, etc.

If you decide to buy a home in the winter , dress warmly and take the time to inspect the exterior of the house, despite the weather and snow.


6. Make your purchase offer

Have you found a home that meets all your criteria? It's time to make your offer to purchase, also called "promise to purchase", to the seller. To help you set a price, consider urgent or necessary work and, of course, the asking price. In a context where overbidding is growing in Quebec, submitting an offer well below the asking price could make you lose the home of your dreams.

Regardless of the amount of your offer to purchase, be sure to state that it is conditional on the inspection. You will thus avoid unpleasant surprises and be protected in the event of hidden defects.


7. Have the property inspected by a professional

Before you make the biggest investment of your life, you need to make sure that the property that makes your heart beat has no major flaws. To do this, call a certified building inspector. As a potential buyer, you can prepare for this inspection by providing the chosen inspector with a list of the items that raised doubts during the visit.

Read the inspection report carefully. If he reports problems that require urgent work and your offer is conditional on the inspection, you can ask the seller to fix them before the purchase, reduce the price of your offer to purchase or even cancel your offer, without consequence.


8. Sign the deed of sale

The inspection did not reveal any defects? Good news! You can now sit down with your notary, complete the various documents and sign the deed of sale. This is also the time to pay the purchase price that you have agreed on with the seller.


9. Get home insurance


Buying a home is the biggest investment there is. To be able to enjoy it with peace of mind, it is important to protect it against disasters and other potential incidents. From the exchange of the deed of sale and the payment, the home belongs to you and becomes your responsibility. Home insurance must be negotiated before finalizing the purchase because, upon signing, the notary will require, on behalf of the mortgage lender, proof of insurance to release the funds.

Home insurance also offers you civil liability insurance that protects you if someone sustains bodily injury or property damage on your property. Plus, getting home insurance soon after buying your home can also help you have peace of mind during your move.


10. Sit back and celebrate

One more colossal step before being able to open the bottle of champagne: the move. A few weeks usually separate the signing of the contract and the taking possession. Take this opportunity to plan your move, make your address changes and contact essential service providers. The better your move is planned and coordinated, the sooner you'll have a glass of champagne in your hand.

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