After a very hard 2020, we now start feeling all the impact of events that have happened last year. And, of course, they impacted the real estate market too.
A personal anecdote: my spouse and I decided a few years ago that we want to save on our first joint property. And 2021 has to be the year when we finally buy it. Back then, in 2015, we had no idea what will happen in 2020.
Now it is 2021, and we are happy to say that the plan is still on.
But, now we have a unique situation when we need to make all these necessary steps to buy a house in Brampton during pandemics. And my significant other feels very uncomfortable.
My favourite motto is "forewarned is forearmed," which is why to help my spouse to better understand the process of buying a house, I came up with this guide.
I think it is so useful that now I want to tell all of you all the details you need to know on how to buy a house in 2021.
So, without further ado…
Steps for buying a house in Brampton in 2021
Save money for the deposit & down payment.
The ultimate first step that you need to make long before even starting planning to buy your property is to save as much money as possible. If you have a proper sum at the start, it will be so much easier for you to pay your mortgage in the future.
The down payment can be somewhere between 5% to 20% of the house's cost. In Ontario, the minimal down payment you need to make while buying a house varies and is tied to the house's price. Therefore you need to consider this factor too when you choose your future home. But the general rule is simple: the bigger the down payment, the better.
As for the deposit: this is the sum you will need to transfer to homeowners to secure your purchase. It is useful both for you as a buyer and for owners since all parties can now be sure that the deal is sealed.
One of my most important first-time home buyer tips that I always tell my clients: save as much money as you can for your deposit and down payment. Also, do not forget that you need to have some savings even after you buy a house. Making enough money for a down payment is not an ultimate goal. You will need to have some savings even after you purchased the property.
Get a mortgage pre-approval
The process of a mortgage pre-approval is your safety net. Once you are pre-approved, you know exactly how much money you can borrow from a bank and can start shopping for homes.
It is a crucial stage on your home buying journey, and it surely has its pros and cons. For example, one of the cons can be that you will be pre-approved on a sum that is way over your budget. Yes, it can happen.
In this case, try to slow down and consider all the risks: buying property should be a fun and safe thing to do!
Select a real estate agent
Many first-time buyers choose to find a real estate agent even before they have a down payment sum. However, I am absolutely sure that your communication with the right real estate agent will be much more productive if you have some money in the bank and you have already been pre-approved for a mortgage.
Choose a real estate agent wisely because this person will be your best advisor and friend throughout this daunting process. With the right agent, you are in professional hands that will sell you a dream, not a nightmare. A professional & experienced Realtor can refer you to every contact that you need in the home buying process.
View properties in your price range
Now the good stuff comes! The fascinating, awesome, and sometimes intimidating process of shopping for your future house! It is one of the most important milestones in any person's life, so choose carefully, and you will eventually find your perfect home.
But, if you have found the right property, do not hesitate and...
Once you find one you like, put an offer on it
Brampton is a very popular place on the real estate market, so every good house will be taken in a second, once it appears there on the market. That's why you need to act fast when you see the place you want.
As for the offer, many factors can influence the owner's decision on who to give the beloved property. And money can be not the most important of them, ironically.
When you send your offer, you have the opportunity to tell about yourself and say to the current owners how you love their house and how much you would love to live there. This approach can win the hearts of the owners and bring you the best property on the market.
After the offer acceptance, deliver the deposit within 24 hours
As we mentioned earlier, a deposit is an important part of the home-buying process, and once you have an agreement with the owners, I advise you to deliver a deposit immediately.
The sooner you will do that, the stronger your case will be. Sometimes, after delivering the deposit, owners can change their minds, and in this case, your deposit will be returned.
However, if you are the one who has second thoughts, be ready to lose your deposit. But, it is kind of a rare situation, so don't be afraid that it will happen to you.
Forward the agreement of sale to the mortgage broker
Now it is time to move onto paperwork. You have an agreement of sale, and you need to consult a mortgage broker, the person who will help you pick your mortgage plan.
Basically, it is a specialist who is needed to show you which options you have regarding your mortgage. When you go to a bank, you will see only the packages this financial organization offers, but a mortgage broker picks one that fits your specific needs.
A broker does not work with a particular bank so you can be sure that you will get the best option. In some cases, a mortgage broker's fee is generally between 1% to 2% of a loan, which can sound expensive. However, this person will help you save a lot more money in the long run so that it will be money well spent.
Arrange for a home inspection (if it's a condition)
A home inspection is another safety net that you can use to make sure that you are buying a good property. I think that this step is important, and money spent on the home inspection will pay off if any problems will be found.
If you find any problems with the house before you sign the final documents, the owners will be obliged to fix those issues. But if it appears later, you will be fixing it.
Once mortgage/Inspection is done, sign the waivers. The deal now becomes firm
So now you officially agree that the house you have bought is in proper condition and you take it as it is. Now you are one step closer to your new home.
Forward all the documents to your lawyer.
Better safe than sorry, right! Your legal team is responsible for all the documents in the home-buying process, and you need to send all of them to make sure that everything is okay.
Once your legal team finds no issues with all the papers and documents, you can go on with your deal.
Two weeks before the closing, get the home insurance
Now the property is practically yours, and it is time to get the home insurance for this property. Home insurance is not required by law, but it is another thing that makes you sleep better at night.
Any house is like an alive organism, and it will break, have issues, and get damaged. Purchasing home insurance is a wise choice, and I definitely recommend you to do it with any new property.
A couple of days before the closing, drop off the down payment & closing cost to your lawyer
We are now close to the end of this journey! After all these months of negotiations, you need to transfer your down payment to your lawyer for him to provide all the necessary operations.
On the day of the closing, the mortgage money comes from your bank to your lawyer, who sends it to the seller's lawyer, and you get the keys and move in.
And that is it! The process is done, and you can go and enjoy your new property, renovate it, and make it your home.
Buying a house is a great adventure of a lifetime. Being that grand, the process, of course, goes hand in hand with different details, nuances, and things you need to know before even starting to think about your own property.
The first thing you need to do is save a needed amount of money for a down payment and deposit. After that, find your trustworthy real estate agent and legal team and move forward to looking for the house of your dreams!
Once you found it, make a deposit, do the inspection, make all the paperwork with lawyers, transfer the down payments, and voila! You are a homeowner!
I hope our detailed guide will help you to see how easy this process really is, and you should not be scared by any step of it. So let's go and find the house of your dreams!