by Kent Braaten
on Tuesday, January 28th, 2020 at 12:00pm.
Buying a house isn’t like buying a new TV. You can’t just walk in the store, drop some cash, and leave with your new purchase. A house is a piece of equity and one of the largest purchases you can make in a lifetime, so it’s understandable that there is a certain procedure in place to ensure the transaction goes as smoothly as possible. So, whether you’re buying for the first time or simply need a refresher on how it goes, here are the steps to buying a house.
Step 1: Determine if You’re Ready
Like I said before, a house is one of the biggest purchases you can make, so it’s important to remember that, while it may seem like a good idea in theory, it’s not a pool you can jump into without checking the water first. Before diving in, you should always ask yourself:
Can I Afford to Buy a House? Buying a house is much more than just the upfront costs—the down payment, closing costs, taxes, etc. It’s not just about what you can afford right now, you’ll also need to be prepared for ongoing costs to come, like mortgage payments, property taxes, home insurance, utilities, possibly condo fees, and regular repairs and maintenance.
Am I Financially Stable? How is your income? Is it steady or fluctuating? If it isn’t necessarily always reliable, do you have a healthy savings to work from or a partner who will also be contributing? Affording a home is one thing, but having to worry about where your next mortgage payment is coming from is entirely another.
Do I Have Time to Devote to Maintenance and Repairs? One of the best things about renting vs buying is that you always have someone to call to take care of the house when things go awry. When it’s your very own house, though, you’re the person you can call.
If you can answer yes to all of these questions, then congratulations! You might just be ready to own your home.
Step 2: Get Pre-Approved
When you have decided that you are ready to buy a house, I know just how tempting it can be to dive into those listings and start the search for your dream home. But, hear me out: you may be able to afford a home, but chances are you can only afford a home within a certain price range. And teasing yourself by looking outside your price range can skew your impression of what is right for you, right now.
A mortgage calculator can be a great first step in determining what you can afford with just some preliminary calculations. However, it is never a guarantee. A pre-approval, on the other hand, is an accurate financial guarantee of what the bank will be able to offer you when the time comes to sign the papers. Not only will it be able to give you the best price range you can afford to look in, but if you do find your dream home and want to move in quickly, it can also offer you some negotiating power when it comes to the offer. It shows the owner that you have already been in touch with a bank and won’t have the wait through an approval process. The offer in front of them is guaranteed, which could give them more incentive to accept!
Step 3: Determine Your Wants & Needs
There are lots of homes for sale in Saskatoon, so if you don’t have at least a few criteria to narrow your search, you can end up sifting through a lot of not-so-perfect properties just to find the right one.
Start with location. Is there a particular Saskatoon neighbourhood you’d like to live in? Or maybe you’re looking for a quiet acreage property outside the city! Remember, it’s easy to give a house a facelift, but not so easy to to lift a house.
Figure out what works for your lifestyle. Do you have kids or are planning to have kids? Are your kids older and moving out? Do you need a big yard for a dog or at least easy access to trails where you can walk it? Do you need to be near friends and family? Moving shouldn’t mean changing your lifestyle, it should just be a new place for you to continue it!
Make a list of special features you’d like to have. Maybe you’ve always wanted a swimming pool in the backyard or legal suite in the basement for extra revenue. Maybe vaulted ceilings have always caught your eye or you’ve been dreaming of a chef’s kitchen! Knowing what you like can help you refine your search as much as possible, so you only see what actually appeals to you.
Step 4: Find a REALTOR®
I’ve said it before and I’ll say it again: there is no downside to working with a buyer’s agent. You’ll be able to work with a local real estate agent that will be able to tell you all about the community, search for listings that perfectly meet your needs, help you draft offers and other documents, and even use their expert market knowledge to negotiate the best possible deal for you. And, best of all, there’s absolutely no cost to you as the buyer!
Step 5: Start Your Search
It may feel like a lot of steps to finally get to this stage, but trust me when I say just how valuable they can be. By this point you will have determined how much you can afford, drafted a list of wants and needs, and you will have equipped yourself with the expert help of a local real estate agent.
Now, as you search for properties online, you’ll have the best possible understanding of the market and what you are looking for. And you won’t be looking alone! Your REALTOR® will also be looking for you through exclusive listing feeds and may even be able to find a back pocket property before it hits the market through their carefully cultivated real estate network. They’ll also be the one arranging for viewings and walkthroughs, so you won’t have to worry about anything other than showing up and taking it all in!
Step 6: Make an Offer
Once you’ve found the house you want to buy, it’s time to get your offer in before it’s gone. This is where your REALTOR® can be a huge help. Not only will they take care of all the official drafting and corresponding with the selling agent, they’ll also help you in determining the best amount to start with to get you the best deal in the market you’re in today. And if you have to deal with a rejection or counteroffer, they can also help you navigate the next steps in getting the home you want at a price you can afford.
Step 7: Seal the Deal
Congratulations! Your offer has been accepted! But, it’s not quite time to celebrate just yet. First, you’ll want to get a home inspection done to ensure your dream home is actually as dreamy as it may look on the outside and to determine if there are any immediate repairs or renovations that will need to be made that you can work into your lending agreement with the bank. Then, you’ll need to actually head back to the bank and finalize the details of your mortgage and get the payments in order for your lawyer to get the seller paid. Once the mortgage has been finalized, your real estate lawyer can then move on to registering the property in your name and getting the deed in order. And with that deed in hand, closing day arrangements can be made!
Closing day will typically involve singing off on the legal possession of the house, paying the down payment, and taking care of closing fees—legal costs, land transfer taxes, and any other charges that may apply to the sale. Once the loose ends are all tied up, though, you’ll be able to take those keys and the house will be all yours!
As you can see, there are quite a few steps to buying a house, many of which can be overwhelming. But, with the help of this guide—and an expert Saskatoon REALTOR®, of course—you’ll be able to breeze through the process just fine, making your journey into homeownership that much simpler!