Buying your first home is a major decision that requires careful planning and consideration. By engaging an Island Homes PEI (IHPEI) REALTOR® we can guide you through the process, help find suitable properties, negotiate offers, and will handle the paperwork. At IHPEI we understand the importance of working with someone you feel comfortable with and who understands your needs.
1. Pre-Approval for Financing
Contact multiple lenders or mortgage brokers to compare rates and terms. Apply for pre-approval, which involves providing your financial information for a thorough evaluation. Pre-approval gives you an idea of how much you can borrow and strengthens your bargaining position when making an offer.
2. Determine Your Budget
Assess your financial situation and determine how much you can afford to spend on a home. Consider your income, savings, and any existing debts or financial commitments. Use an online mortgage calculator to estimate your monthly mortgage payments.
3. Save for a Down Payment
Start saving for a down payment, which is typically a percentage of the home's purchase price; although Canada’s First-Time Home Buyer Incentive program offers down payments as low as 5%. Saving for a down payment can be challenging but if you can aim for at least 20% to avoid private mortgage insurance (PMI) costs it will be worth it in the long run. Saving more can also give you better loan terms and lower monthly payments.
4. Define Your Needs & Wants
Make a list of your home requirements and preferences. Consider factors such as location, size, number of bedrooms and bathrooms, yard space, amenities, and proximity to schools, transportation, and other essential services. This will help you focus your search and make informed decisions.
5. Begin the House-Hunting Process
Based on your wish list, your IHPEI REALTOR® will use their professional resources, including Multiple Listing Service® (MLS®), to search for suitable properties on the market. Once potential properties are identified, we will schedule viewings according to your availability and will accompany you during these visits, providing insights and answering any questions you may have about the properties. If you express interest in attending open houses, we can accompany you to these as well. Throughout the viewing process we will help you assess the pros and cons of each property, considering various factors such as location, condition, market value, and potential for future resale.
6. Making an Offer
Once you find a home you would like to offer on, your IHPEI REALTOR® will prepare a written offer. When deciding on an offer price we will work with you, providing information and assistance, as you consider factors such as the listing price, market conditions, comparable sales, the home's condition, and the potential appraised value as your lender will likely require an appraisal to verify the home's value. Once your offer is signed, we will present the offer to the seller’s representative, and negotiations may ensue until an agreement is reached.
7. Conditions
There may or may not be conditions within your offer. Most often there are conditions such as financing, home inspection, property insurance, septic inspection (if applicable), to name a few. Once an offer is accepted, all conditions need to be met on or before the agreed upon deadlines. IHPEI will provide guidance and direction, and will facilitate the process of meeting all conditions within an offer. For instance:
Financing - Finalize your mortgage: Return to your chosen lender and complete the mortgage application process. Provide any additional documentation requested, such as a copy of the Agreement of Purchase and Sale and other related paperwork that your IHPEI REALTOR® may be able to provide, and review the loan terms and conditions. Be prepared for the underwriting process, which involves a detailed evaluation of your financial information.
Home Inspection - In the case of a home inspection, you will need to hire a qualified home inspector to assess the property's condition and you will give careful review of the inspection report. IHPEI can provide recommendations of reputable home inspectors, will accompany you to meet with the home inspector, and will assist you with reviewing the home inspection report. If the home inspection is acceptable, you will be in position to move forward by deleting the home inspection condition. If it is not acceptable, you may wish to have your IHPEI REALTOR® negotiate repairs or credits with the seller on your behalf.
8. Legal Representation
You will need to hire a lawyer to perform the necessary legal work required when properties change ownership which can include solicitor’s approval of the Agreement of Purchase and Sale, title search of the property, transfer or the property deed, the exchange or funds from the buyer to the seller, to name a few.
9. Firm Offer
Once all of the conditions within an offer have been met the offer is considered firm. Next up is closing day.
10. Closing the Deal
At IHPEI, we recommend scheduling the pre-close viewing for the morning of closing day. Sometimes it may be necessary, although not recommended, to schedule it a day or two prior to the closing date. We accompany you to the pre-close viewing and once you have completed a satisfactory pre-close viewing, you will notify your lawyer’s office so they can proceed with the final closing details. Prior to closing you will have signed the necessary paperwork at your lawyer’s office and will be responsible to pay closing costs. Once the closing details are finalized your lawyer’s office will notify you and you will receive the keys to your new home.
Buying your first home is a major decision that requires careful planning and consideration. By engaging an Island Homes PEI (IHPEI) REALTOR® we can guide you through the process, help find suitable properties, negotiate offers, and will handle the paperwork. At IHPEI we understand the importance of working with someone you feel comfortable with and who understands your needs. Remember to thoroughly research and seek professional advice throughout the home-buying process. Buying a home can be complex; having an experienced IHPEI professional by your side can help ensure a smoother and more successful transaction.
REALTOR® - Registered trademark of REALTOR® Canada Inc. (owned by the Canadian Real Estate Association [CREA] and the National Association of REALTORS®). REALTORS® are licensed salespersons, members of CREA, as well as their local real estate association, and are appointed or authorized by an agent (broker) to trade in real estate.