Buying a home is exciting. It also requires making decisions that will affect you and your family. Understanding the buying process, your needs, preferences and situation, can make these decisions easier. The more information you have, the better the decisions you can make. Also, you don't need to make these decisions alone, your realtor and many other professionals can help along the way.
There are some basic steps in the home buying process that most people follow, and the amount of time you spend on each step is dependent on your personal situation. For example, first time buyers may spend more time getting to know the market, and those with young families may concentrate more on the neighbourhood.
Following are the basic steps. For more in depth information for each step, plus additional steps and some helpful tips, see Home Buying in Detail.
Aerial view of the City of Courtenay
What do you need, want? You may have a good sense of this already. Writing it
down or discussing it with family or friends can help clarify too. And as you get to know the market, your wants might change. Sometimes, after people have viewed a home that meets their
criteria, they realize it doesn't really suit their needs. This is a normal part of the process of defining exactly what you need. Also, sometimes the perfect home just isn't available, and being
able to discern between your needs and wants is important.
The Filberg Festival in Comox featuring many fine artisans
Get to know the market. Browsing can be fun, and with the internet and search tools like PCS, it is easy. Browsing allows you to learn about home prices, the style of home you prefer, where you would like to buy a home, and what features of a house are important to you. It will give you a knowledge foundation and help you feel confident in the choice you make. In getting to know the market you are also getting to know your preferences, which is especially important for first time buyers.
Review your financial situation: After some browsing on the market you will likely find some homes of interest to you, and you will need to know what is within your price range. You may want to speak to a mortgage broker or financial professional at this point, to help you set a budget. There are also mortgage calculators on PCS and the internet that can help. The federal government's new stress test set to take effect January 1, 2018, is for mortgages with 20% or more down payments. In October of 2016 they implemented a stress test for mortgages with less than 20% down payment. The stress test reduces the amount of mortgage people can qualify for by about 20%.
Tip: here on the Island many homes do not have basements so we measure the whole house. Other parts of Canada do not include the basement in the measurements as all homes have a basement. A house here with a full basement may measure 2000 sq ft, while elsewhere it would be a 1000 sq ft home.
Actively Looking: Once you’ve gotten to know the market, determined what homes appeal to you, and what will work for you budget, you can start exploring the market directly by viewing homes and neighbourhoods that meet your criteria. It is easy to get excited when you see something you like, I recommend allowing yourself time here to get familiar with the areas and availability, to ensure you make a good decision for the long run.
The Offer, Negotiations and Due Diligence: These three factors are interconnected. Once you have explored the market and determined the best choice for you, a Realtor® can help you determine what a fair offer is by doing a CMA (Comparative Market Analysis), which reviews similar homes currently on the market, plus recently sold homes (this reveals what buyers thought was a fair price), and expired listings (homes that did not sell because the price was too high).
Once a fair price is determined a Realtor® will represent you through the negotiations and ensure that the contract has the right subject clauses to protect you. Due diligence includes reviewing the documents on the property, and inspections are important to ensure you are making a sound investment. A Realtor® will guide you through everything including the offer, negotiations, inspections, subject removals, final financing, insurance, title transfer, possession and walk through.
Finding a Realtor. Realtors are people with different service models, experiences, skills and personality, and it is important to find one that fits with you. You may want to contact a few to find one that works for you. Asking for past client feedback can be helpful, see Client Feedback for comments made from my clients.
When is a realtor your agent? For sellers it is obvious, a listing agreement is signed and the sign goes on the lawn. For buyers this is a little more challenging as generally buyers do not sign an agency agreement with a realtor. However, common law states that if people are acting like an agency relationship exists, then one does exist. A Realtor putting you on PCS, or answering questions about a listing, does not automatically create an agency relationship. Going out on showings and receiving guidance from a Realtor may create an agency relationship. The important thing for buyers is they have the right to choose, or switch, which agent they work with. I understand that part of shopping for a house is also shopping for a Realtor.
Mount Washington and Paradise Meadows are framed within a forest canopy while hiking along the trails of Paradise Meadows
For more in depth information for each step, plus additional steps and some helpful tips, see Home Buying in Detail.
When I met Gerry I'm not sure a client could have given him more restrictions on what I wanted in my first home buy. During the process I became very discouraged but realized what I was looking for and wanted was very difficult and most likely unrealistic. Even though I became discouraged Gerry never did. I got exactly what I wanted in the end. Gerry was relentless for me and I'm sure will be for you to. Terry Kenny See Client Feedback for more client comments.