Are You a Property Virgin in Calgary?
If you're a property virgin, don't fret – we've all contemplated it at some time. Many of us have taken that big leap! It can seem scary and overwhelming at first, but don't worry. Let us help you navigate through all the "ins and outs" of buying your very first home.
You'll be expertly and efficiently guided through the entire process, from the very start to the finish – and well beyond. With extensive knowledge in the small home market (and move-up markets), mortgage financing and budgeting, schools locations and transportation access, our team of real estate professionals will help make your first step onto the property ladder a secure one. Let's get started... It's your move!
First-Time Buyer's Guide
How to Purchase a Home
Congratulations on deciding to work towards buying your very first home. This is an exciting step in life that is quite often, the largest investment you'll ever make. Such an emotional and historic event should be treated with caution, and with an approach that helps you understand the process, the timeline, all the different forms that are involved, and the concept of Agency – just to name a few. It can be a scary and daunting task if you don't have someone to guide you every step of the way.
We have created this step-by-step resource to guide first-time buyers into the wonderful world of home ownership. It is also often referred to by move-up buyers since the home buying process is only done a few times in a person's lifetime and the process frequently changes. Even some real estate agents can't keep up with the new forms, processes and constantly changing requirements. Don't worry, we're experts!
Step 1: Mortgage Loan Pre-Approval:
To purchase a home in Alberta, a minimum of 5% of the purchase price is typically required to get the ball rolling. There are even a number of government programs that can help you source part of this money if you don't have it available right now. A mortgage professional will guide you through all the steps to getting a loan pre-approval, and advise you what requirements need to be met to purchase your first home. If you don't already have a mortgage professional to work with it's not a problem! Feel free to contact us and we'll find out what is important to you and set you up with your choice of our preferred mortgage professonals. Many times this step is done as a part of Step 2.
Step 2: Meeting With a Real Estate Professional:
Let my passion, training and experience in real estate guide you towards buying your very first home. And I promise, they'll be no pressure and you'll get great service and advice. These are some of the things you can expect from me:
In an initial homebuyer consultation – at a time and location that is convenient to you – I'll meet with you personally. I am extremely proficient, experienced and knowledgeable.
My experience is that people have a general idea of the "district" or group of neighbourhoods within the city they wish to live in. You can visit the search properties pages of this website to get a better feel for the types of neighbourhoods and homes in each of these areas. In this initial meeting, I like to describe the general process and get an understanding of your desired area to start our search. I will ask you a few key and sometimes thought provoking questions that will help narrow our search, and save you a lot of wasted time.
Some of the questions will include:
- What has you motivated to buy a home now?
- Your mortgage loan pre-approval limit?
- Your purchase limit? (This is what you're comfortable in spending on a home since not everyone is comforable with spending what they're approved for.)
- Your area specifics? (What type of neighbourhood are you looking for, does it need to be close to work, recreation or any other priority in your life?)
- Your timeline for finding a home?
- Your preferred type/style of home? (are you looking for a condominium apartment, a condominium townhouse, a 2-storey home, a bungalow, a bi-level home, or a half-duplex, etc. Don't worry if you don't know the differences, we will help.)
- Your absolute "must haves" in a home? (You NEED a 3 bedroom home, is an example.)
- Your "wish list" for a home? (i.e. What you would like to see in your home? A fireplace, hardwood floors, granite countertops?)
- What are some general features that you hate in a home? (You probably have examples from other people's homes.)
It's perfectly normal not to know everything. We will work through features that you love, and try to fit them within the budget requirements that you have. It's my job (and pleasure) to make your search a fun, enjoyable and rewarding experience.
In my homebuyer consultation, I'll also educate you on the home buying process:
- Educating you on the current real estate market
- Educating you on home styles and home ownership styles
- Helping you understand the various forms that are involved in the process and when you should expect to see each one
- Helping you understand the differences between a Listing Agent, a Selling Agent and a Buyer's Agent
- Helping you understand the differences between a real estate agent, a real estate salesperson and a REALTOR®. And the help you understand the differences between the license classes of Associate and Broker.
- Educating you on how house prices are established, what influences house prices, and how the money you pay for a home pays the seller, the sellers home selling expenses, and pays the various agents involved
- Helping you understand Agency Law in the Province of Alberta, your options, and how each of these options can impact your ability to get a great deal on a home. Did you know, in Alberta, that for you to be represented by an real estate professional in a transaction to purchase a home, that a Buyer Representation Agreement MUST be signed? No agreement in writing, then there's no representation and the agent you're working WITH is not working FOR you. Having one in place WILL save you money and may result in a Commission Rebate back to you — the buyer!
- And most importantly, educating you on what not to do during your home search
Step 3: The Search:
This is where the fun really ramps up:
Looking for your first home is exciting with the advanced techonology on my websites. If you haven't done so already, I'll register you on my websites and start looking through the very easy-to-navigate system. The tools are quite extensive and have detailed information for you on your Calgary area real estate search. I can narrow down specific areas, property types, and details such as the number of bedrooms, whether a property has a finished basement or a garage, and even whether there are schools or shopping nearby. Since I'll have an idea of what you're looking for from the initial consultation, I'll immediately start a two-pronged search:
- I'll program my real estate systems to notify you, by email, of all the current and new home listings as they hit the market. All the listings FIND YOU! (No more need for you to hunt from website to website in your search.) You can then review them all in detail using the descriptions, photos, virtual tours and floor plans provided by other real estate agents. (If you see a home that you like, feel free to drive by it and through the neighbourhood. Get a feel for the home and the area. BUT, when you wish to see inside of the home or on the property, NEVER call the listing agent (the one on the sign — they work for the seller to get THEM the best price, not you and by using that agent you can't get a better deal with them than the seller). Call, text or email me to book a viewing appointment right away, it's no trouble and you're not bothering us. The odds are, if you like the home, then others will too. I want you to be there first — in case this is your dream home!
- I will also program our "agent-only" website to notify us of homes that meet or exceed your criteria the very minute they hit the market or fall into your price range. I will review them to confirm a match to your criteria and forward them off to you for approval. I'll also explore other homes in a less vertical and limited search.
Once we have narrowed the search from the dozens of homes that will meet your initial criteria, "viewing appointments" we will be arranged, based on your time schedule.
Keep notes on the homes that you visit. Based on experience, homes start to blend together for many buyers. Unfortunately, you just can't buy the house that has the spacious living room from one home, the kitchen "to die for" from another, and the luxurious ensuite bathroom from a third. I will also provide you with a useful home rating scale to help try to keep them all in focus.
Step 4: You've Found It!
You've found it! Now it's time to review the facts about this home, search for some of the legal restrictions on the property and perform a quick search to locate comparative homes. This information will assist us when reviewing pricing for making an offer. Together, we will examine past sales history in the area using our "agent-only" MLS® System website, and locate all recently sold, conditionally sold and active listings that fit the same criteria as your find. As your real estate agent, we can help interpret this often complex data.
As your agent, we'll propose a purchase price based on the current real estate market and advise you on "top-market value" so that you're aware of it well before the negotiations take place.
Step 5: The "Offer to Purchase" Process
I will most likely have an "Offer to Purchase" form already drafted with me when we're viewing homes. As a tech-savvy and leading edge professional REALTOR®, I have the ability to provide an almost paper-free transaction to help the environment and to help eliminate unnecessary delays.
It usually takes between 20 and 30 minutes to completely fill out the documents (providing I did a good job explaining them in the initial consultation), and to forward the signed Offer to Purchase to the co-operating REALTOR®. (From my experience, almost every transaction involves two real estate agents and most often with agents from two competing real estate firms. This is actually a huge advantage to you as a buyer.)
A cheque for the deposit will be discussed, and it will required by the other REALTOR® at the appropriate time. It should be noted that deposits are fully refundable if the conditions imposed in the Offer to Purchase are not satisfied providing you've met the terms in the purchase contract. The amount of the deposit is negotiable and will vary depending on your position, the home being purchased and sometimes on the wishes of the seller. Once the final amount of deposit is determined through the negotiations, we will be asking for it. The "cheque" will most often be required in the form of a bank draft versus a personal or certified cheque.
Important sections on the offer:
- Pricing: I will have researched and investigated recently sold, pending sales, conditionally sold homes, and active listings to provide a basis for your opening offer. If time permits, we will review the legal restrictions to the property that are registered on the properties title. This is often a step that is overlooked by both listing and buyer agents that sometimes can significantly impact a property's value. There are many different strategies to gain the best price for you, and I will discuss some of these with you at this point in the process. Don't count on the same strategy for every transaction: A great negotiator could have a very different strategy for each offer. The deposit amount and mortgage amount can be a factor for price. Legal restrictions on the property, appliances included in the purchase, and even whether the seller has a recent survey of the property are also considered at this point. All cash offers have no advantage over an offer with 10% or 20% down. In some regards they are much riskier for a seller.
- Possession Date: This will be the date that you wish to take possession of the home. Your move in date will likely be the next day or on the very next weekend. In most cases the seller will have indicated a preference for the possession date that we would know from our MLS® System. This can also be a negotiation factor — afterall, "time is money". Don't be confused with the different terms: in Alberta, "possession date" and "completion date" are almost always the same day. Don't worry, I've heard some agents confuse the two.
- Conditions of the Sale: These are the specific terms which much be met in the Offer to Purchase for such items as:
Financing Condition: The lending company that you're using for your mortgage loan will have already emailed a copy of their conditions for their pre-approval to you so we have a fair idea of what they'll be looking for in the purchase contract. Once the Offer to Purchase is accepted by the seller, I immediately email a copy of that Conditional Purchase Contract and the MLS® listing sheet so that the lender can provide us with their final approval letter with in a few days. Often the lender will require an appraisal to help ensure the home meets their criteria and risk tolerance. If your financing is more than 80% of the purchase price, then the lender will also need to forward the entire file to CMHC (or another mortgage default insurer) for their approval for the mandatory mortgage default insurance. This could add several days to the process.
Property Inspection Condition: I always recommend that you hire a provincially-licensed home inspector to review the home and inspect for hidden problems and possible issues that may occur in the future. The cost of the inspection ranges from $300 to $700 depending on the size and location of the home. I feel this is a wise investment for you and the home so that you know many of the issues that may have been unknown or were undisclosed by the seller. You will also be educated on many of the home's mechanical systems during the home inspection. All homes have issues and knowing what they are is important. If you don't have a home inspector to use, I'll recommend a few that our clients have used in the past and were happy with the inspectors' performance.
Condominium Document Review Condition: If the home you wish to purchase is a condominium, a Condominium Document Review will be highly recommended to help ensure that the building or condo complex is well funded, well maintained, and with sound management. These reviews are done by professional reviewers — many of whom were previously condominium property managers so they know their stuff. Most reviews cost in the neighbourhood of $350 to $500.
Other "Special" conditions: If you have indicated a particular concern or have a specific need, we can prepare a special condition into the Offer to Purchase.
Seller's conditions: The seller may also impose conditions in the Offer to Purchase.
- Offer Open Until Time/Date: Often overlooked, this is a strategic item that we will discuss with you and really depends on the specific situation. It should be noted that ALL signatures, by both parties and the delivery of the final contract to both agents MUST happen within these timelines or any agreement is void. It is extremely unwise to leave your contract with a blank "offer open until time/date" — always seek prior legal counsel should you wish to use this tactic.
Step 6: Offer Presentation, Negotiation and Acceptance
After writing the offer with you, I will carefully devise a strategic plan of attack to leverage your position. A cover letter is often attached along with the offer and sent to the seller's REALTOR®. It's rare to see an offer delivered in person, so we confirm by a telephone call to help ensure they received the offer and any attachments in legible, complete condition and to discuss and highlight the various parts of the offer.
Once you and seller agree on all the terms, conditions and price of the home through our negotiations, both REALTORS® will get the final signatures and your REALTOR® will ask for your deposit cheque (usually in the form of a bank draft). A final copy of the offer will be provided to you and the deposit cheque will be placed into the co-operating real estate brokerage's Trust Account for the benefit of both the buyer and the seller unless the contract is worded otherwise.
The signatures make the contract, not the delivery of the deposit cheque!
Step 7: Satisfaction and Release of the Conditions (Creating a Firm Sale):
Once your offer has been accepted, signed and delivered, we will guide you on the procedures to satisfy the conditions in the contract. Timelines need to be kept and quick action is required. The usual amount of time alloted for conditions is between 3 and 7 days. However, this timeline can be changed and renegotiated provided BOTH parties agree to the changes in writing. If you are a first-time buyer with the mortgage amount which requires mortgage default insurance, the required amount of condition time will almost alway be 10 days even though you were fully pre-approved by your lender. After your financing, property inspection, and other conditions have been met, we will discuss any outstanding issues, and have you sign the waivers to move forward from a conditionally sale (C/S) to a firm sale. The waivers must be delivered as per the terms of the contract and timelines are strictly enforced. Once the sale is firm, your REALTOR® will ask for and deliver any additional deposits required by the contract and deliver your purchase contract to your preferred real estate lawyer. Don't have one? No problem, we work with a select few and will be happy to help you select one.
Step 8: Preparation for Possession
- If you haven't done so already, now is the time to finish packing, arrange for the movers, or a moving truck rental and line up your friends as helpers.
- Arrange for gas, electricity, water and other utilities such as Internet, telephone and cable television services.
- Arrange for home owner's insurance on the new home. This is a requirement of a mortgage and will need to be completed prior to the meeting with your real estate lawyer to sign the various documents. If you are buying a condominium, you need to be arranging insurance specifically for condominium property.
- About one to two weeks before possession, make an appointment with your real estate lawyer. During that meeting, your lawyer will go through all the details of the file, have you sign the mortgage documents for the lender, and receive from you the balance of the purchase price (and their fees) necessary to complete the sale. If you have any concerns at all, don't hesitate to call the lawyer well before setting up this meeting with them.
- Arrange for your mail to be forwarded to your new home. Complete the necessary an address changes for your mail and inform your employer and your various bank branches of your new address.
- Do Not buy furniture or major appliances, buy or lease a car, or make any applications for credit until after you take possession of your new home. Do not accept increases in a line of credit or charge card credit limits either in this time period! Do not close any credit card accounts: While this "shouldn't" impact your credit rating, it does cause lenders concern.
- There are a lot of items here. Have no worries – I'll work with you and remind you along the way.
Step 9: Possession!
It's here... the big day you've dreamed of: Owning your first home!
Usually keys are released by the seller's lawyer just before noon. Once all monies are transferred and confirmed by the seller's lawyer, your real estate agent can pick up and release the keys to you. A walk-through of the home is done at that time to verify that everything is as it should be. In the very unlikely case that it's not, that's when the lawyers get involved again.
Step 10: My Team's Follow-Up
I will be contacting you shortly after the move-in to make sure you're happy and that things are running smoothly. If you have any questions prior to that, I am only a call, text or email away. Then, I'll be keeping in touch with you — I'm not going to leave you all alone and isolated!
Register today to start receiving new listings automatically sent to your email address, manage your home search and to view full details on Calgary real estate listings.
I offer a complementary Buyer's Consultation which can help you decide if home ownership is even right for you and helps with an explaination of every aspect of the home buying process. Thereafter, we work as a team to help you find a home that you'll love.
I work non-typical hours and am available to meet with you evenings and weekends for your convenience — unlike many other real estate agents, brokers and team leaders who typically work Monday to Friday from 10 a.m. to 4:30 p.m. Give me a call, text or email and let's get started...