Purchasing our first home was an eye-opening experience, mainly because we bought ours in 2020 during the height of the pandemic, when the housing market was changing drastically. People increasingly want to become homeowners, and, at the same time, rental properties have become more popular. Faced with the high demand, you must be well-prepared to put all the luck on your side!
Here's some advice based on my experience from the past years.
Preparation is key
Wanting to buy a property means planning ahead—even before you begin researching the market, you've got some homework to do. First, it's essential to get all the information you need from the bank to determine your borrowing capacity and current mortgage rates. I also found out that for self-employed people, banks will evaluate the amount of their loan based on the average net income of their last two years.
Also, it's a good idea to make a budget for all the various costs, expenses, and payments of purchasing a home. This will give you a concrete idea of what you can afford based on the lifestyle you want to live.
Before starting to visit, I learned the hard way that it is strongly recommended to have a preapproval letter from a financial institution or mortgage broker. This makes the buying process easier and saves time! Then, you can choose to work with a real estate broker to search for properties or do it yourself, depending on your preference. Contact someone in your area and share your search criteria with them. They'll be happy to support you on this journey!
Research and visits
The second important step is to do your research and conduct visits. It can take several weeks to find a suitable property, depending on our selection criteria. Personally, I like to first do an overview of the area I’m looking at to get a sense of the asking prices per sector. I tend to go broader to ensure I’m not missing a property. For example, I will indicate the price, the type of house, the required parking, and so on.
Then, when I like a listing, I write an email to the real estate broker. This is typically what I write in the email: I introduce myself very briefly, I mention the address of the property, and I mention that I’m preapproved for a mortage. I’ll then ask to see documentation such as the seller's statement before making an appointment for a visit. If the property is in high demand, then I accept the proposed appointment. If I don't hear back within the same day, I call the broker, even if it means leaving a voice message.
Currently, the process of selling a property is still very active, so it is wise to proceed quickly if you really like a property.
Purchase offer
If you liked the visit and the property feels right, then comes the exciting part: making an offer to purchase. It is necessary to communicate your interest ideally the same day to the broker who will ask you questions to fill out the documentation, including the proposed amount. Also, you must inform the conditions of the sale, such as the inspection, the date of possession, etc. Within a short period of time that will be communicated to you, you will receive the seller's answer, if your offer is accepted or refused.
Notary and taking possession
Was the offer accepted by the seller? Time to celebrate! But first, at this stage, you’ll have to finalize the sale by informing the mortgage lender and making an appointment with a notary. It is important to budget for this transaction, which can total several thousand dollars.
The notary then provides us with a lot of relevant information about the property, such as acquired rights, the land registry and a review of previous deeds of sale and purchase. For example, we learned that the neighbour's fence is encroaching on our land. So, we could have recourse to that. This allows us to have the right information about the property and to avoid unpleasant surprises! For the taking of possession, very often the keys are handed over at the notary's office or on the same day as the signatures. You can now enjoy your new property!
All in all, buying a property involves several simple steps, but each one has its own particularity. Contacting a professional can be a good way to be carefully accompanied, especially for a first purchase. I will tell you that even today, I always learn new things during each visit. In the long run, it will help me be better equipped for future real estate investments!
