Buying Your First Home

Buying your first home is a big milestone in life. With today’s mortgage rates as low as they are it is no wonder people younger and younger are looking ahead to home ownership earlier in life.  Here is what you should expect to spend in money and time when evolving from Tenant to Home Owner.

You have decided to buy a home. Congratulations! The first step should be a visit to your financial institution or mortgage broker. They can pre-qualify you for your home and advise you on your financial limitations as far as securing a mortgage. There is nothing worse than finding a home you love and then finding out you cannot get financing for it.  

Once you have your price point. You will need to have at least 5% of the purchase price as a down payment and another couple thousand for closing costs and additional fees. These include lawyer fees and other adjustments and incidentals needing to be paid for on or before closing. You’re now ready to call your Realtor and start looking at houses.

You’ve found the one made an offer and after some negotiating back and forth your offer has been accepted. Now what? This is called the conditional period. This period lasts about 5-7 days typically and this time is used for the Buyer to verify a few things about their home to be. Mainly arranging the financing on the property and a home inspection to make sure it is structurally sound.  You are not obligated to buy the home at this point but the Seller cannot take another offer on the property until your conditional period ends.

The financing period will take anywhere from 2 to 5 days and may involve an appraisal of the property by the Lender. This is paid for by the Buyer. A home inspection will also be conducted in most cases. Home Inspections are not dependant on a sale and are done for the SOLE benefit of the Buyer. Many people think a home inspection has a pass or fail grade and if the house has a poor home inspection it will not be able to be financed. This is not the case. Home Inspections are not mandatory by any means but they are always a good idea.

If the property is on a well & septic a flow test may be warranted or a septic inspection. All these incidentals and inspections are paid for by the Buyer before ownership is transferred.  Once the conditions have all been met and the Buyer is happy with the details of the mortgage and the home inspection, then the deal is firmed up. This involves a final waiver removing the conditions and at that point the house is officially SOLD.

You would have pre-selected a closing date when writing your offer. Typically, a few days before that closing date you will be contacted by your lawyer and asked to bring a check in to complete the sale. This is when you would hand over the 5% down payment and your lawyer bill would be payable at this time as well.

As you approach the closing date. This is the date you get keys and take possession. You will need to contact the utility companies and advise them you will be need the utilities transferred into your name on closing. Don’t plan on getting keys before noon on day of close. It rarely happens. Usually you will receive your keys in the afternoon sometime between 1 and 5pm.  Once you have the keys you are free to move in.

TIP: Try to avoid closing on a Friday. If there was a problem and the house was not able to close that day, you would have to wait until Monday to resolve things which might make for a long uncomfortable weekend. Especially if you are required to be out of your current address on the day in question.

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