Pro Tips: The Current Buyer Strategy

If you’re looking to buy a home in this active market, you may soon find out how important it is to get a head start on the buying process. It’s not just calling a Realtor® and going to look at some homes. You may be competing with other buyers for the same home, and you need to take every step to prepare yourself for the buying process.

First, understand your finances.

The first step to becoming a homeowner is having a clear picture of your financial situation, which will help you determine a realistic down payment. This ranges between 5% to 20% for most people. How high of a mortgage payment you can afford is another factor. Your realtor can review possible mortgage payment scenarios, including mortgage insurance and property taxes, so that you know exactly what to expect before making any final decisions on a home.

Next, it’s time to get pre-approved.

Once you have an idea of what you think you can afford, it’s time to start the pre-approval process. It’s important to research mortgage lenders and not simply look for the lowest interest rate. A well-regarded mortgage broker or bank is equally important as working with a respected, trustworthy Realtor®. You can decide by word of mouth (reputation), or even ask your Realtor® for a recommendation. Be prepared to provide intimate details about your finances. You’ll have to provide pay stubs, statements for your savings, chequing, debts, retirement accounts, investment accounts and recent tax returns. You’ll also have to act fast once you’re pre-approved, since your pre-approval letter will only be valid for about 30-90 days, depending on your lender.

Approved? Let the house hunting begin!

Potential buyers get excited about this next step in the home buying process, but it pays to proceed with caution. Don’t ignore the fact that the COVID-19 pandemic continues to impact the housing market. With limited inventory in most markets across Canada, homes are selling quickly, and sometimes with numerous offers. Once you’ve connected with a Realtor® to view listings, it’s a good time to make a list of your must-haves. Do you need 3 bedrooms? Need a fenced yard for pets? What about a garage? Are you ready/able to tackle a renovation, or do you need something move-in ready? Now, let the search begin…

Once you’ve found your dream home, make an offer.

Be strategic when you find the perfect home. Your agent will pull comparables and help with your offer strategy. The advice from your Realtor® will include writing in conditions of a home inspection (among other things). Your Realtor®, family and friends can suggest a credible inspector, who is skilled in examining everything from a property’s roof and foundation, to its plumbing and electrical systems. You also must be willing to walk away from a property if the inspection uncovers major problems that surpass your budget. If there are minor deficiencies, or items in need of repair, you have a few options: they can ask for a credit to fix some of those items on their own, or ask the seller to fix them. If the items seem too daunting, you can always collapse the deal and move on to another property.

It’s closing time.

Congratulations, you’ve made it to the final step of the home buying process! Once you and the seller settle on a closing date, your agent, mortgage lender, and lawyer all have a role to play in finalizing things. Now is NOT the time to purchase any new vehicles before your mortgage payments start! If your credit score or employment situation changes, this can cause your mortgage to fall through.

We are full time Realtors®, and are very familiar with the home buying process. Let us walk you through step by step to make things less stressful for you!

- Deb Cook & Michelle Bailey