Mortgage Blog

The 5 Steps of the Home Buying Process

January 8, 2016 | Posted by: Brandi Pierik and Matthew Pierik - Red Deer and Calgary Mortgage Brokers

Though every house and mortgage is different the home buying process tends to follow a basic progression. Knowing what you can expect next is important for getting through this chaotic time as smoothly as possible. Though this is the time when offers and counter offers fly furiously you can get through the process fairly easily if you are willing to deal with the hassle and the paperwork. Here is the basic progression you can expect.

1. Find a home
This part is very labour intensive. To spread your net as wide as possible you are going to want to speak to your realtor, search for listings online and drive around neighbourhoods that interest you in search of for sale signs. This is also a good time to speak to friends, family and business contacts and see if they can offer you any references or leads.

2. Consider your financing options
First time home buyers in particular have a wide variety of options at their disposal. The Canada Revenue Agency even offers a First Time Home Buyers’ Tax Credit (HBTC). To help you find the right mortgage for your financial needs you should speak to a mortgage broker rather than a bank. Mortgage brokers are able to shop around on your behalf to find the best rates and terms for you, whereas banks are only able to offer you their rates and terms. Your mortgage broker will be able to use their knowledge, expertise and industry connections to find the right mortgage for your financial situation.

3. Make an offer
Sit down with your realtor and figure out how much money you should offer to pay for the home, as well as any considerations you should ask for (such as having the buyer pay your closing costs). Once you have decided this your realtor will then present the offer to the seller’s realtor, who will present it to the seller. The seller will either accept your offer or issue a counter offer. You can then choose to accept the counter offer or continue to go back and forth until both parties are satisfied or one of you decides to call it quits. If an agreement is reached you will then make a good faith deposit and the process will transition into escrow. Escrow is the short period of time (typically about 30 days) where the seller takes the home off the market with the contractual expectation that you are now going to buy the home - provided the home inspection doesn’t turn up any serious problems.

4. Get the home inspected
Even if the home appears to be flawless you should always have a home inspection done. A professional home inspector will be able to accurately inspect the safety, quality and overall condition of your potential purchase. If the home inspection reveals a serious defect that the seller did not disclose you are generally able to rescind your offer and get your deposit back. If you find yourself in this situation you can also negotiate to have the seller make the repairs or discount the selling price appropriately.

5. Close the deal or move on
If you are able to work out a deal with the seller, or if the inspection did not reveal any major flaws, you should now be ready to close the deal. Once you have closed the deal you will likely need to have the house officially appraised (mortgage companies often require this since it helps protect their interest in the house), and do a title search to ensure no one but the seller has claim to the property. You will also want to speak to your mortgage broker about mortgage insurance, and you will need to sit down with your mortgage broker and finish the paperwork.

For more information about the home buying process, or to discuss your mortgage options, contact Pierik Financial today at 403.588.8657 and visit www.wehaveamortgageforthat.ca.

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