One of the most common questions asked by first-time home buyers is: “What are the steps to buying a home?”

Step I – Purchasing Power 

The first step to buying a new home is affordability and deciding on the size of the home. 

The rules for the minimum down payment in Canada are as follows:

• If the purchase price is less than $500,000, the minimum down payment is 5%
• If the purchase price is between $500,000 and $999,999, the minimum down payment is 5% of the first $500,000, and 10% of any amount over $500,000
• If the purchase price is $1,000,000 or more, the minimum down payment is 20%

When buyers have decided on the size of home and monthly spending ability, the next step is finding a bank or lender to qualify them for the purchase price. Since every lender is unique, it’s a good idea to speak with both a mortgage broker and a bank. 

Ash and Sumeet work with experienced lenders on a regular basis and can direct buyers to the best lender for the buyer’s particular needs.

Step II – Searching for the ideal home

This can be frustrating, which is why you need an experienced realtor for guidance. 

At this stage buyers know the size of home they are looking for (number of bedrooms, bathrooms etc...), and desired neighbourhoods. This is where the realtor helps you find your perfect home.

Ash and Sumeet search hundreds of properties and narrow down the search to homes that best fit your list of requirements and ideal locations to find you a home you’ll love.  

Step III – Offer, Negotiation and Due Diligence

Armed with a market comparison of recently sold properties in the area, Ash and Sumeet prepare an offer of Contract Purchase and Sale, and present it to the seller’s agent.

Once the negotiated price for the house is accepted, the buyer, their appointed attorney, their mortgage advisor and Ash and Sumeet, begin the due diligence process. Some of the due diligence performed during this process includes: reviewing the city file, performing the home and property inspections, reviewing engineer’s reports (if applicable), lawyers review, property appraisal, and reviewing strata minutes and bylaws (if applicable).

Step IV – Final Mortgage Approval and Deposit

Lenders do not complete a mortgage without the completed Contract of Purchase and Sale in place. The lender can request documents up to the week before closing. It’s a good idea to keep all job requirements and a credit profile as clean as the day the approval is granted. 

Once the lender has requested and approved the appraisal, it’s only steps away from the closing date. 

After the lender has approved the mortgage amount, and all conditions to the contract purchase and sale are removed, the deposit is due. The deposit is held in Trust with either the Buyer Brokerage or Sellers Agent (unless otherwise specifically outlined in the Contract).

Step V – Completion and Move-in Day

This date is also known as the completion date or possession date. 

This is the day the property title is transferred and registered into the new home owner’s name(s), and the property becomes the new home owner’s responsibility. Once registration is complete, Ash and Sumeet deliver the keys to the new home and complete a final walk-through. Time to celebrate.