The home buying process can take as little as a few weeks or stretch out to several months or longer. When buying brand new construction, it can even take up to three or four years to go thru all the steps.
I’ll give you a brief description of each step when buying a resale house or condominium so you can get a feel for how it all comes together.
Of critical importance, once you’ve seriously started your home search, is to get a Full Mortgage Pre-Approval so you know exactly how large a mortgage you qualify for. In today’s busy Toronto market where multiple offers happen quite often, you may need to go in without a financing condition so being certain about your financing is a necessity.
When you get to the point where you’re signing an offer, you will need to present a deposit to go with it. The size of that deposit is typically at least 5% of the purchase price and often higher. You’ll need to provide that deposit, often in the form of a bank draft, when your agent gets you to sign the Agreement.
Therefore you must arrange to have those funds instantly available and ready to be accessed at any time. You can pre-arrange a line of credit or transfer funds from a savings account into checking. If funds are overseas or coming from the bank of Mom & Dad, the best solution is to get those funds into your account right away.
Steps 3 & 4
We add buyers to our HOMEWatch Program which delivers MLS listings to them daily for them to look at. It’s best to arrange your schedule so you can review those listings first thing in the morning and if there’s anything that excites you, let us know the MLS numbers of your favourites and we’ll set a time to go and see them as soon as possible.
Showings can typically take place Monday through Friday from 9 am up until 8 or 9 pm in the evening. Saturdays showings are usually set starting around 9 am and end around 6 pm. Sundays often have a later start after 10 or 11 am and typically go until 5 or 6 pm. If the property you want to see is tenanted, we often have to give 24-hour notice in order to get inside.
Real estate offices for the bigger companies are usually open seven days a week and therefore are easier to make showing appointments. Smaller brokerages may be closed and it’s often harder to make appointments on the weekend.
Step 6, 7 and 8
Once we’ve seen some homes, and you’ve found one you really like, we will now do our market analysis of what the value of that home really is in today’s market. Frequently homes are deliberately under listed by $30 to $100,000 or more in order to artificially generate multiple offers.
This practice, although legal, is very deceiving to many buyers. You see a home that looks fantastic and it’s in your price range. However, because it’s under listed, and offers are being held off until a week later, you get excited and want to see it. Of course we’ll accommodate that but we will warn you that it’s not going to sell anywhere close to its list price.
That’s why it is so important to have a realistic market valuation done before making your offer. We will then strategize as to what price you want to go in at, what closing date to include and what terms and conditions to include in the offer.
At this point we’ll need to collect a deposit cheque or bank draft from you to present to the listing agent and seller. Offers are often presented these days via fax or more commonly email so we’d take a picture of your bank draft to be sent along with your offer.
Step 9, 10, 11 & 12
Once your offer has been accepted, we need to deliver that bank draft deposit immediately to the listing agent’s office to secure your purchase. If we don’t do that immediately it may put your offer in jeopardy.
You need a lawyer to handle the closing process for you. If you have a real estate lawyer that your family has used in the past - terrific. Otherwise we can recommend two names to you and you can call them to see if you’re comfortable with them.
We will email a copy of the offer and the listing to your lawyer and to your lender right away so they can start doing their part of the transaction.
If you have any conditions in your offer, we will help you work to get them satisfied. Once any home inspection or financing conditions have been satisfied, or a review of the condominium Status Certificate has been completed, you will sign individual waivers to remove each of those conditions out of the offer to make it firm and binding. Your offer is now considered to be firm and binding.
Your lender will submit the mortgage application along with all your supporting paperwork in to the bank. Once they’ve processed it you will need to go to the bank branch or mortgage broker’s office to sign the final mortgage commitment documents.
A few days before the closing or completion date for the change of ownership to you, you’ll arrange a visit to your lawyer. He or she will have told you the total amount of money that you’ll need to complete the transaction. This will include the balance of your down payment plus all your legal and disbursement costs. These funds need to be provided by way of a bank draft, a certified cheque or a wire transfer into the lawyer’s trust account.
While you’re there, the lawyer will provide all the documents for your signature that are necessary to change the title over to your name.
Your lender will wire transfer their mortgage funds into the lawyer’s trust account as well - usually the evening before or the morning of the closing. Once that’s done your lawyer has all the funds they need to complete the transaction.
One of the clauses we commonly include in our buyer’s offers is a request to have one or two visits to the property between the time the offer has become firm and the closing day.
We typically suggest that we reserve one visit for the day before closing. Once at the premises we’ll check to confirm that the premises have been satisfactorily cleaned, that all the appliances are in the same condition as when your offer was accepted and that there has been no damage to the house or condo suite since you saw it last.
The big day has arrived… sometime during the day your lawyer and the seller’s lawyer get together virtually and exchange funds and switch the title over from the seller’s name to your name.
Usually your lawyer will arrange to have the property key(s) couriered over to his or her office either the day before or the day of closing. Once funds and title have been transferred, your lawyer will release the keys to you and you’re now the happy new owner of that house or condo suite.