It’s not as complicated as you think. Buying a house is an easy process as long as you stay organized and you have the right people around you to help. Below are the steps to buying a house.
1. Get a pre-approval/pre-qualification from a mortgage broker or a financial advisor. A pre-qual or pre-approval (both are the same thing) will let you know how much you qualify for. Once you know how much you can afford, you can start looking for a house with full confidence. You will need to provide your proof of income.
2. Get a good real estate agent. If you are buying a house you won’t have to pay commission, you only pay commission to the real estate agent if you are selling the house. Therefore it doesn’t hurt to get a good real estate agent!
3. If you have a smart phone, download the MLS app and check out some properties yourself. The MLS app will list you all the properties that are currently for sale in your area, you can even adjust the metrics to your price range, # of bedrooms. size etc. Once you’re comfortable with looking for certain criteria such as area, price, size etc you will be a pro at identifying what’s good, bad and the norm. Your agent may not show you ALL the available houses for sale, having access to the MLS will allow you to pin point the ones you’d like to see.
4. If you don’t have a smart phone, you can have access to the MLS website. A good one to use is www.MLS.com (America) or www.realtor.ca (Canada) Again, having access to the listings for sale will allow you to pin point the properties of interest, will familiarize you with the property details, and you will also find out more about what kind of house REALLY interests you.
5. Once you find the house you like, get your approval for a mortgage. Remember, right now you have a pre-approval from the bank. Basically the bank gave you a nod to go ahead and start searching for a house. Now you need an actual approval. Usually the seller will give you 5 days condition to fulfill financing needs, aka get a mortgage approval. You basically tell your mortgage broker/financial advisor to turn your pre-approval to an approval and give them the exact property details (provided by your real estate agent).
- Ask the mortgage broker about property tax payments – sometimes the bank will withdraw it automatically from your account and sometimes you manage your own payments – it’s important you know how your payments are set up.
6. The real estate agent will provide you the purchase and sale agreement and the MLS listing sheet with all the property details. The purchase and sale agreement will state the down payment amount, which you will provide to your real estate agent, to deposit into a trust account.
7. Get a lawyer, who deals with real estate. The lawyer will register the charge (mortgage) on the house and issue closing documents. The lawyer will collect the remainder of the down payment (if any) and issue closing statements for you to sign. The closing date is the date you receive ownership of the house. (Very important date! Many relatives and friends will ask you “When is the closing?”). The lawyer will also explain how property tax works.
8. Congrats the house is yours! Now make sure your mortgage payments, property tax payments are on time!