THE SIX STEPS IN OUR HOME BUYING PROCESS
If you are thinking about buying your first home, your second, third, fourth or even fifth home, there is always going to be a process.
Mostly, it doesn't change, the steps will remain the same no matter if it is your first home or your fifth.
Below I am going to take you through the process that I have used the last 12 years to ensure my clients are educated on the home buying process.
Step 1: Pre Approval
Yes I know, this part is a pain in the arse but I will tell you it is step one because it is the most important step.
If you don't know how much the bank will lend you, how can you start looking for a home to purchase? You need to understand your budget and what you can afford, an experienced mortgage broker will be able to help you with that.
I typically recommend the use of a mortgage broker as opposed to going to your back as the lender has access to dozens of different lenders who offer different rates and terms.
Step 2: Identify the Style of Home
Is it a condo you are looking for? What kind of condo? An apartment or townhouse? A 4 plex or a large multi-family unit?
Is it a single family home? Great, what style a bungalow or two storey or 4 level split?
The style of your home should fit your budget and your lifestyle, just because the lender says you can borrow $500,000 doesn't mean you should spend $500,000.
Step 3: Needs and Wants
Typically when I am showing homes to my buyer clients, they are looking at decor and whether the couch is going to fit in the living room.
I am looking at the house first from a resale perspective, is the home backing onto a busy boulevard? Is it in a cul-de-sac? Does it have a mountain view or a finished basement?
Take a piece of paper and draw a line down the middle of it, label one side needs and the other side wants and start making your list.
You will probably find there to be some cross over, don't worry too much about that it is natural to want and feel that you need that same thing. When I bought my last home I thought I needed a 3 car garage and mountain view when I really needed was a cul-de-sac location to make sure the kiddos were safe when playing in the front yard.
Perspective is everything.
Step 4: What Area of the City are you Most Interested in?
This may or may not be determined by budget.
You see, as of this writing there is about a $350,000 difference in price points between the East and West sides of the city.
The north versus the south and even beyond into some of the smaller centers around the city like Okotoks and Airdrie offer less expensive alternatives. A lot of times you will find greater value in the smaller cities, but this will come back to whether you want to live in a small town.
Step 5: Hire the Right Agent
Ok so look, you are on a real estate agent's website reading a blog about how to buy a house so naturally I am going to plug myself here just a little....
Seriously though, interview a few agents, collect some referrals from friends and family.
EVERYONE 'has a guy or gal'. EVERYONE.
Ask around and then once you find a few, interview them and ask them a few simple questions:
- What is your process for finding us a house?
- Can you walk me through the process when we want to make a purchase?
- How much experience do you have and how many homes have you helped buyer's buy?
- What is your success rate in negotiations, how much can you save me off the asking price?
Last part is you have to feel comfortable with that person, you don't have to get the warm and fuzzies but if your BS metre starts going off then time to move on to the next interview.
Step 6: Get out and Look
I once had a buyer client look at over 70 homes and never bought.
They pulled back and I found out years later that they stayed in Calgary and wound up building a home after telling me they were staying in Ontario.
Ya I know, boo hoo right?
Here's the thing, don't feel for one second that you are wasting your agent's time, their job is to find you a home, their job is to show you houses, their job is to help you negotiate the right price and favourable terms.
Don't get frustrated either, if you can't find the right house, if you hired the right person, they will have access to resources that may get you into properties that aren't even listed.
Lastly, don't think for one second that looking at 20 or 30 or 40 houses is too many, you need to find what's right for you based on your criteria.
That said though, if you get to that point it is time to sit down with your REALTOR® and reevaluate your wants and needs and maybe revisit some of the homes that you looked at previously that you maybe overlooked.
Bonus Piece of Advice
Can this be stressful? Sure it can, when it comes to the mortgage approval and home inspection etc...
The shopping part is the fun part so embrace it and let your Realtor and Mortgage Professional as well as the Home Inspector handle the rest, that's why you hire the professionals.