For most of us, the purchase of a home is the most important financial commitment we'll make in our lifetime. For most Canadians, owning their own home is a lifelong dream. When buying as home, you have to juggle many important decisions. The Home Sweet Home Team would like to help you get started.

Welcome to the world of home buying. It's an exciting world, full of anticipation and opportunity -- a chance to pursue your dream, establish roots and take your first steps towards long-term financial security.

For the complete First Time Buyers Guide e-mail Julie Vesuwalla julie@homesweethometeam.ca

Deciding to Rent or Buy


Buying a home is one of the most important decisions a person can make. After years of living with parents, with college classmates in dorms, or alone in an apartment, the time may come that buying a house or condominium will improve one's financial stability and sense of personal security.

Consider personal needs and responsibilities
Assess you financial situation and how well you manage your money
Don't rely on a boom" or the right time to buy" as market conditions fluctuate daily
Think of your purchase as a long term investment that provides a service
Remember that the money you put towards rent is an expense not an investment
Real estate is a better long-term investment than bonds, TSE, gold and T-Bills
There is no tax on the capital gain of a home that you reside in
You are ready when you are able to save money and are willing to change spending habits. You need to be committed long term with a strong pride of ownership
You should have a good credit rating

Decide What Price You Can Afford


The costs of buying a home include;
The cost of the initial purchase (down payment, legal fees, inspections and taxes)
The ongoing costs (mortgage, operating costs, insurance, and taxes)

Gross Debt Service Ratio - lenders decide how much to lend you based on your income. Your monthly expenses (mortgage, taxes, and condo fees) should not exceed 32% of your gross monthly income.
 
Total monthly income         
Minus 32% of above         
Equals Gross Debt Service Ratio

Total Debt Service Ratio - lenders decide how much to lend you based on your income. You total expenses (auto, education, loans, credit cards) cannot exceed 40% of your income.

Total monthly Gross Income     
Minus 40% of above           
Minus monthly fixed payments  
Equals Total Debt Service Ratio

Decide What Kind of Home You Can Afford


Avoid buying a home that will stretch your budget. Match what you can afford with the home that provides as many of your needs and wants as possible. If you cannot afford everything you want, make sure you pick something that provides you with what you really need. Try living for a couple of months as if you were making mortgage payments. This will help you determine if you are able to adjust your lifestyle as required.

Investigate the Marketplace


What features are important to you?

Needs (bedrooms, bathrooms, schools, size of home, public transportation ect.)
Wants (fireplace, pool, ect.)
Where? Downtown, suburbs, outside the city, rural, NW, NE, SW, SE.
Pick an area that provides the things you want and need in your price range. Find this area by reading ads in the Herald and The Real Estate News, driving through the communities, checking out the homes that are available, going to open houses. Ask your family and friend what they like about where they live. Look at proximity to work and schools.

Deciding What to Buy


Type- single family detached, attached, duplex, townhouse, condo

NEW HOME  is good for people who want to buy directly from a builder or a design the home themselves.  Be prepared for additional cash outlays for landscaping, window coverage, appliances and GST. Home warranties and mandatory.
USED HOMES are good for people that want additional features at little cost. Expect to acquire somebody else's challenges.
CONDO is good for someone that enjoys shared ownership (grounds, recreational facilities, elevators, lobby, electrical and plumbing facilities) and exterior maintenance (shovelling, cut grass, and painting). This is definitely a lifestyle choice. Quite often you will have shared recreational facilities as well. There are monthly maintaenance fees. Condo's can be ideal starter homes as they can cost quite a bit less.
 

Arrange a Mortgage


Spend some time shopping around for the best mortgage opportunity.
We recommend that you get pre approved before you start shopping for a home. You can get a mortgage from a bank or trust company, credit union, mortgage brokerages, private lenders. Ask lots of questions and make sure that you understand what the financer is offering and what you are obligated to do. You can also assume the sellers current mortgage or you can get the seller to finance your purchase by offering a vender take back mortgage".

Make sure you understand your Mortgage Term (amount of time you are being lent the money for)
Amortization period (the amount of time you are allowed to pay off the entire mortgage)
Interest rates (the percentage you must pay to borrow this money)
Payment schedule (how often and how much you will pay - it is the combination of both interest and principle) 
Prepayment Privileges (are there any penalties for paying off your mortgage quicker?), Payment frequency (how much money you will save by making payments more often.), Portability (can you take the mortgage with you when you sell the house?),
Assumable (can your purchaser take over your mortgage?)

There are several types of mortgages:
Conventional you put down more than 25%
High ratio Mortgages you put down less than 25%
Variable Rate Mortgages fixed payment amounts with a floating interest rate

When applying for a mortgage you will be asked a lot of personal questions.
All parties involved in the purchase should bring a confirmation letter from your employer stating your wages and time there, photocopies of T4 slips and tax returns for 2 years.
Make a list of all assets and liabilities and determine your net worth.
Itemize the source of your down payment so that the lender can verify that you have the money and where it's coming from.
Bring your social insurance number, chequing account information and your lawyer's business card.

After all is said and done the lender will need time to appraise the value.

Finding Your Home Sweet Home


After you have decided on where you would like to live and the type of home you would like to purchase, the Home Sweet Home Team can use that information to locate homes and show you the properties that best suit your needs.

This is what we will do for you:
Set up your search. The system notifies you via e-mail of all the properties that match your search criteria the instant they become available.
We can recommend a lawyer and a home inspector for you.
Book appointments for all the homes you would like to see.
Help you find the ideal home by showing you only the properties that match your needs and wants.
Write an Offer to Purchase
Present and negotiate all offers on your behalf to ensure you get the best possible price with the best possible terms.
Provide you with important information about your purchase supervise the home
inspection and essentially save your time, trouble and money.

Selecting a Lawyer


Pick your lawyer by asking friends and family who they recommend or we can recommend one for you. Go with the lawyer that has the best experience and is genuinely interested in providing you with the services that you require.
Ask the lawyer about their real-estate experience, fee structure, estimate of total legal costs, availability, and their references.

Your Lawyer will:
Make sure that the person selling the home is the valid owner and has title
Investigate whether there are any claims against the property
Find out if the taxes are paid and up to date on the property
Make sure that the home complies with bylaws and zoning

Have  a Home Inspection


Some lenders require that a qualified home inspector goes over every inch of the proposed property before you purchase it. This is generally a condition of the purchase.
We can recommend a home inspector for you if you would like.
The inspector will look at the structure, electricity, plumbing, heating, roof, insulation, walls, ceiling, floors, windows, foundation, basement, and anything that will affect the appraised value of the property. They will provide you with a written report on their recommendations. Home inspector costs vary.

Making  an Offer  to  Purchase


After you have selected the perfect home, the Home Sweet Home Team will prepare an Offer to Purchase with you and present it to the listing agent. We will assist you in deciding what the best price to offer is. It is important to remember that the more competition there is for the home, the higher the offer should be- sometimes even exceeding the asking price.

Multiple Offers
Some suggestions when you are faced with a multiple offer situation are:

Write the offer for the most you would want to pay for the home - that way you 
have nothing to regret if your offer does not get selected.Remove any unnecessary conditions if possible. Be sure to meet as many of the seller's needs and wants as possible, such as  possession date and goods included.

Deposit
You are required to include a deposit in the form of a cheque with the Offer to 
purchase. This shows that you are serious and that it is your intention to purchase the property.

The listing broker will cash and hold your money in a trust account until the 
transaction closes, at which time it will be applied to your down payment.
If your offer is not accepted or if conditions of the contract are not satisfied, the 
listing broker will refund your money.
After you have waived your conditions, if you decide you no longer wish to 
proceed with the purchase your deposit will not be refunded.

Presenting Your Offer

A member of the Home Sweet Home Team will present your offer to the listing agent and the seller.

Your offer will either be accepted, rejected, or the seller will make a counter offer.

We will negotiate the terms of the contract after discussions with you. The process of making an offer, receiving a counter offer, and then revising it again is not uncommon. The whole process can seem like a roller coaster ride- exciting but stressful. It's all part of making the deal work best for you and acceptable to the vendor.

Once the Offer is Accepted


After the Offer to Purchase has been accepted and if the offer is binding by conditions those conditions must be removed on the date agreed to in the Offer to Purchase. If the conditions are not removed the deal will collapse. These conditions could be:

Home Financing Condition - Mortgage Approval
A pre-approval is not a guarantee of being approved for the mortgage.
You must meet your lender during the conditional offer state to get a final 
mortgage approval.
To ensure the process goes smoothly, bring a copy of the signed offer to 
purchase.

Your lender will:
Verify your financial information, the property and other information required to 
complete the mortgage application.Your lender may require an appraisal, If an appraisal is required, we will be available to assist in getting access to the home.

Property Inspection Condition
Some lenders require that a qualified home inspector goes over every inch of the proposed property before you purchase it. This is generally a condition of the purchase.We can recommend a home inspector for you if you would like.
The inspector will look at the structure, electricity, plumbing, heating, roof, insulation, walls, ceiling, floors, windows, foundation, basement, and anything that will affect the appraised value of the property. They will provide you with a written report on their recommendations. Home inspector costs vary.

Condominium Documents Condition
If you are purchasing a condo, you will have the opportunity to review the Condo documents to ensure everything is in order. We recommend you having an outside party conduct the review. If you choose to go that route we can make a recommendation. You are responsible for the cost of a condo document review if you choose to do that.

Removing your conditions
Once the conditions have been satisfied, you can waive the conditions and proceed with the sale of the property.
After you have signed a waiver of conditions to waive the conditions in the Offer to Purchase you have a FIRM SALE.

Once the Offer is Firm


After all the conditions of the offer have been satisfied and waived, it is time to start thinking ahead and making arrangements.

Legal Representation
You need to select a lawyer who can handle the legal aspect of the sale. We can refer you to a lawyer, or you are free to use one that you have chosen.
The lawyer will take care of things such as transferring the title into your name and distributing the money to the seller's lawyer.

Home Owners Insurance
Must be in place before closing/possession date of the new home.

Other
Give notice to your landlord if you are renting
Start looking at moving options- hiring a professional mover or moving yourself. If you would like a recommendation for a mover, please let us know we eill provide you with options.
Make necessary address changes.

The Final Steps


Closing day
The closing day is the day that you finally achieve your goal of home ownership. CONGRATULATIONS!

The following will take place on closing day.

Your lender will provide the mortgage money to your lawyer
You must provide the balance of your down payment to your lawyer along with
the closing costs. This usually happens 7 to 14 days before closing when you meet  with your lawyer to sigh the final documents.
Your lawyer pays the vendor and registers the home in your name.
We will meet you at your new home. At this time, we will walk through the
property to ensure that everything is in order and all items that were agreed upon in the Offer to Purchase are there and in working order.

Agency Relationships


Before and Realtor can write a contract with their clients, they must be aware of the Agency Relationship and must sign an Agency Disclosure form.

Seller's Agency
The seller's Agent has duties to only the seller and does not have any to the buyer. These duties are loyalty, obedience, confidentiality, reasonable skill and care, full disclosure and full accounting.

Buyer's Agency
The Buyer's Agent has duties to only the buyer and does not have any to the seller. These duties are loyalty, obedience, confidentiality, reasonable skill and care, full disclosure and full accounting.

Dual Agency
The Realtor in Dual Agency represents both the buyer and seller equally. The realtor in this situation may disclose any information other than the following;
What price the buyer is willing to pay
What price the seller is willing to accept
Why the seller is selling (motivation)
Why the buyer is buying (motivation)

Buyer Brokerage Service Agreement


Our commitment to you

Our buyer specialists are full time professional Real Estate Agents that are educated in the legal aspects of the Real Estate practice, and are licensed to provide Real estate Services. They can earn their living by serving the needs of home buyers with integrity.
A large part of the work is performed behind the scenes". While you are out with the buyer's agent, the rest of the team is working to constantly acquire information that will help us serve you better.

How Buyer Specialists are Compensated
Buyer Specialists are not paid a traditional salary. They work entirely on commission, which they receive only if they complete a transaction for you. They are compensated only when all of your needs have been satisfied and you take ownership of your new home. All of the services provided to you are uncompensated unless you purchase a home with us.
Real Estate commissions are traditionally paid from the seller's proceeds, not out of your pocket. Buyer representation is a free service to you which protects your best interests.


Your Commitment to Us
We will invest substantial time and effort in locating your home, and will represent you with the highest standard of integrity. In return, The Home Sweet Home Team requests your LOYALTY- a commitment that you will work with our team, exclusively, in selecting and purchasing your home.

By signing this contract you are not obligated to purchase a property, we simply ask for your commitment that if you do purchase a property it will be with the Home Sweet Home team.

Satisfaction Guarantee


The Home Sweet Home Team Satisfaction Guarantee

The Home Sweet Home Team strives to achieve 100% Customer Satisfaction. If we do not meet your expectations or if your plans change, just let us know and all our efforts will halt.
You will be released from any further obligation to us other than those homes that we have already introduced to you.

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Calgary Real Estate Board. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.
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