Are you currently located in Canada or thinking of moving to Canada? Are you overwhelmed and don’t know where to begin buying a new home? Maybe you’re behind the real estate trends of 2022? Even if that’s the case, this guide should be able to help you start taking step into your real estate journey.
Realize the Severity of the Situation
Above everything else, you must remember to take the process seriously. If you want to buy home, realize that it is a large investment and you want make sure that you get a good value for the price. You also want to be sure that you don’t overpay as well. That’s why it is best to get a professional involved. That is where a real estate agent comes in.
Start with a Real Estate Agent
Believe it or not, according to the Statistics Canada website, the Canadian real estate agents and brokers industry rose by 11.4% in 2020. This doesn’t come as a surprise. if you plan to buy home without one, it can be a complicated and daunting process. But, what exactly is a real estate agent?
A real estate agent acts as a point of liaison between the buyers and sellers in real estate transactions. They must be licensed to practice and they earn money through commissions. This means that their income depends solely on their ability to close the deals. This is good news for you since they will most likely do everything in their power to close the sales. It also means that your real estate agent will earn a percentage of the closing price.
What Does a Real Estate Agent Do?
The role of a real estate agent is to serve as a representative of you during negotiations with the seller. However, they have many other responsibilities, such as:
• Planning and attending open houses
• Setting up appointments with potential buyers and sellers
• Finding homes for sale or listing homes to buy
• Researching sale prices of similar properties
• Scheduling home inspections and appraisals
• Completing paperwork for offers and purchasing agreements
• Sending information to the lender for the mortgage
Now, that you have a better idea of what a real estate is and what they do, let’s go over the process of buying a home with them.
What is Your Budget?
The first thing to pin down when you are planning to buy a new home in Canada, or anywhere for that matter, is your budget. If not a complete budget, then try thinking of around what ballpark of offers you are willing to accept. This is important because it will more than likely be the first thing that your real estate agent asks. This question will determine the course of your buying journey and be the major impact that influences all of your options and choices.
Your Finances Will Be Seen
Home loan lenders will look at your income, credit score, assets, and any debt you may have in order to determine whether or not to give you a loan for your new home. In order to make sure this process runs smoothly, prepare all of your financial documents and any other paperwork that may be needed.
These documents could include:
• Proof of income
• Bank Stubs
• Tax Returns
• Proof of Residency
• Credit Reports
• Social Insurance Card
If you owed a previous home before the new one, it would be a good idea to know how much equity you have built up. Equity is the amount you had paid off on your home, in this case, the previous one. If you have a good amount of equity, then you may be able to use it to put a down payment on your new home. This will also help with the pre-approval process as well.
Don’t Put Yourself in Debt
Unless you’re a billionaire, no amount of equity or money you have saved up can pay for a house in one go. You want to be sure that you can pay for the house in installments and live within your means. To do this properly, determine the amount of mortgage financing that you qualify for and the amount of debt that you can have and still be able to survive.
This should seem like a no brainer, but only invest in a home that has passed the home inspection. Unless you’re experienced with them and want a fixer upper, homes that don’t pass home inspection can make your wallet sad and put you in more debt that you just aren’t ready for.
If you’re new to buying a home, don’t do it alone. Invest in help and make sure your prospects pass the inspection. If there is anything you should take away from this guide it is those two points, as well, not putting yourself into debt that you can’t get out of.