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Buying a House – Process In Brief

When it comes to buying a home, there’s naturally going to be a lot of hoops to jump through. In a perfect world, you could just throw down a pile of cash and walk into your new home right away. Of course, if that were the case, you would probably see home ownership skyrocket. Not everyone has piles of cash to give away, and the process of buying a house is generally much more complicated than that. It’s not like purchasing a television, and it really shouldn’t be. The idea of being able to look at a home and buy it within the next few hours might seem enticing, but it doesn’t give you a lot of time to really think over your decision. And, regardless, the real world doesn’t work like that.

Even so, the first step you need to take in the buying process is simply deciding that you want to buy a house. This might seem silly and obvious, but it’s something you really need to take to heart. The process is rarely a simple one, and it’s vital that you weigh all the pros and cons to ensure that you know what you’re getting yourself into. Some might even refer to the process of buying a house as a gauntlet. Indeed, sometimes the search can go on for months as you repeatedly fill out paperwork, get credit checks, apply for mortgages, and make offers ad nauseam.

To help you along the way, it would certainly be prudent to enlist the services of a realtor. Nobody wants to go through the buying process on their own if only because it can be confusing and difficult. With a realtor on your side, you can be sure that all the difficulties will be smoothed out and you’ll be guided along in the process by someone with ample expertise.

Once you’ve decided that you do want to buy a house and you’ve got adequate help on your side, you’ll probably want to understand when the right time to buy a house is. Of course, this is something a realtor can help you with, but it’s good to do a little research on your own. For the most part, the best time to buy a house is when there are a lot of listings, fewer buyers, and of course, when the prices are lower. It can be difficult to find a confluence of all these factors at any given time. Some people will tell you that the best time to buy is after September because of the school year starting up and the oncoming winter. It’s natural to have fewer buyers in the market when they can just hold out through the winter without having to pack up their family in the middle of the school year.

Of course, this isn’t always the case, and it really depends a lot on the market at the time. Certainly, if you can find a time when all these factors combine, you’ll have a better chance at snagging the right home in the right neighborhood for the right price. Even so, this point can’t be emphasized enough: a realtor is really going to give you the best opportunity at finding all of these things.

Indeed, when searching for a house in a suitable area, realtors can narrow down the list substantially to meet your needs. They will have a database of listed houses, each with their own prices and information. You can essentially find a place that meets all your requirements in a relatively short amount of time. Whether you want a house in a City Centre or in the suburbs, there are going to be listings for you. Obviously, finding a suitable house isn’t the same thing as buying a suitable house, and it may take some time before you actually find the right one. You can view a variety of different houses, but be sure to take stock of the condition of its composite parts. For instance, plumbing, electrical work, and the quality of the windows are a few things that should be understood prior to making an offer. If you find a house get it inspected and find it has faulty electrical wiring but is otherwise good, you’re going to need to make a decision on sacrificing that cost right at the start. It’s important to get a qualified engineer or contractor to make an inspection of all the inner workings of the house prior to doing anything substantial.

Once you find the right house, you’re probably going to want to make an offer. You’re also going to want to make sure you have the budget for buying a house. In essence, you need to know the figures for your household budget and you annual income if you want to be approved for a mortgage loan. These loans are vital to helping you purchase your ideal home, and they are necessary to have if you want to make a serious offer. Mortgage lenders can come in the form of banks or independent mortgage professionals. For the most part, they will calculate your financial readiness by looking at two different factors: Gross Debt Service (GDS) ratio and Total Debt Service (TDS) ratio.

The GDS ratio is basically a measure of how much of your monthly budget goes into integral costs like taxes, heating costs, and mortgage payments. For the most part, you’re going to want your GDS ratio to be at or below 32%. The TDS ratio describes how much of your monthly budget goes into housing costs and other debt payments like credit card payments or car loans and leases. Your TDS ratio should be at or below 40% ideally. Many individuals can get pre-approved for a mortgage loan, but it’s important to understand that pre-approval doesn’t necessarily mean that you’ll be approved when the time comes for the loan. Certain factors can change that might lead you to being unqualified for the loan.

There are a variety of different mortgage options to choose from, and a realtor can certainly help you determine the best route for you. If you’ve been approved for a loan, then you basically have the financial wherewithal to make a valid offer. An offer should include the amount of money that you’re willing to spend, but it can also include a number of different conditions. For instance, mortgage approval at an acceptable rate for a term (5 years) and amortized over a specific number of years (say 25). You can also make the sale conditional on an acceptable professional home inspection.

If your offer is accepted, you will be required to pay the amount stated in the offer and each party will have to perform any of the duties outlined in the conditions. There are going to be several costs associated with closing the sale and you will need to arrange for utilities services, but you will essentially be able to move in on completion day.

So, to synthesize all of this information, the buying process can be broken down into these steps:

  • Decide that you want to buy a house and where.
  • Find a realtor.
  • Get approved for a mortgage.
  • View houses.
  • Make an offer (including inspection and other conditions).
  • Close the sale (and pay any closing costs).

In essence, that’s all you will have to do to buy a house. Although it seems relatively easy when in list form, it’s more than likely going to be a long but ultimately rewarding experience.

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The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license. REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.