So you are ready to make your first home purchase. What are the exact steps in buying your new home? In this episode, we discuss how to buy a home for the first time and guide you with a step by step process on what needs to happen through the entire purchase: from getting your financing in place, to choosing your location, home inspection, home upgrades, closing the deal and more.
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Hi, everyone. I'm Karl. Welcome to another Homebuyer's School video, a channel where you get the latest strategy, tactics and tips from home buying experts.
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[00:00:30] So today I'm joined by Kevin French, Realtor with RE/MAX. And the question we're going to answer today is
What is the first time home buying process in 2019
So Kevin, today, if I was a first time home buyer, what is the steps I would need to take to actually on the path to home ownership?
1. The first step is going to be meet with a lender and understand your affordability. So what range you're shopping within.
2. Then you're going to want to [00:01:00] start looking at, you probably already have an idea of the areas that you want to live in.
And then it would be good to understand those areas more through, whether it's a brand new home and you're looking at the new build options in the area, or if you're meeting with a real estate agent and then going to discuss what your options are and then what your needs are with them and they'll be able to narrow things down from there.
And the second thing in terms of is area.
So when you're looking in an area, what are some of the things that you want to keep in mind?
It depends on the person and what their needs are,
but most important is going to be amenities:
- Are the amenities there, are the amenities coming.
- How far do you want to be away from them or how close do you want to be to them?
- Schools, if that's important, if the home buyer has children.
- And then access to main roads, access to whatever routes they're going to take on a daily basis.
- And then lake [00:02:00] communities, having community with an HOA fee.
A lot of the more inner city communities don't have HOA fees. That's because they weren't really a thing back when they were developed.
However, now having a homeowners association and then having a yearly fee allows for your community to have added green space that the city of Calgary is not going to take care of.
Or added amenities such as a recreation center, maybe a pool.
Some communities, of course, I have a lake which would be included in there. So those are yearly fees that typically range from 150 to $500 [00:02:30] which actually add a lot of value for a once a year for one time payment.
And if you want to know more about HOA fees, check out our video above in the description below.
So once you've actually selected an area and then now you mentioned new versus previously owned homes, is there a way to think about it
I would say firstly, it depends on the person.
If you're a person who is nervous about unknown expenses or having [00:03:00] to replace a roof, replace a furnace, replace a hot water tank, those are things that are more common obviously in a resale property.
And then if you're purchasing brand new, you get the comfort of having everything new, of course, and then having the benefits of a new home warranty plus a builder warranty that's going to be included with that.
And then you're going to want to make sure that you're purchasing with a reputable builder that stands by their warranty and their product.
And let's say you've actually selected the home, whether it's new or previously [00:03:30] owned. What are the next steps after that?
Once you've, some people are more comfortable having in property inspection on a new home as well.
But obviously on a resale, I would recommend having a home inspection.
And then from there you go through the property.
It's important to have a real estate agent that has a critical eye and it's important for the buyer to be critical themselves.
It's easy to walk into a home and love the vaulted ceiling or love that it has a big garage or love that it has a nice ensuite, but the reality is is that once you get past all of the nice to [00:04:00] haves, you should look at the negatives in the property as well and kind of be more critical so that you understand what you're getting yourself into.
For example, renovations that were done professionally versus renovations that were done by the homeowner who is obviously not a contractor, not qualified to do them.
And then other things such as the exterior of the property and how the land is sloped and is the foundation going to have issues.
Most of these items are covered with the home inspector, but it's important to know what you're getting yourself into so you can feel sound in the purchase in the end.
And if you were to purchase [00:04:30] a brand new home, what are some of the things in terms of upgrades that you would be thinking of too, because I'm sure the home builders would probably want you to include a whole bunch of other things and whether you could afford it or not. Right?
Yeah. In 2009 when it was difficult to sell homes, builders started to include a lot of the things that were then considered luxuries.
So you would pay extra for hard surface flooring. You'd pay extra for granite or stone countertops, whether it be quartz, granite or other.
And then tile flooring, things like that.
In 2009 [00:05:00] when it was more difficult to sell homes, those things started to get thrown in as a bonus to incentivize people to buy homes.
Ever since then, in newer communities, it's almost become a standard.
So having hard surface flooring in the main areas, whether it's laminate, luxury vinyl plank or hardwood, having tile in the entryways and in the bathrooms and then having stone at least in the kitchen at the bare minimum and then throughout the rest of the home is key.
From there, I would be careful with what you spend your money upgrading.
If you wanted to do knock down [00:05:30] ceiling versus popcorn, it's not going to get you more money in the end when you go to sell your property. Those are nice to haves.
Hot water on demand, paying to have the landscaping above and beyond just sod, depends on of course the price point of the property.
But typically there's a lot of things that you can spend money on that you should know going into it that you're spending it for your own use and not for a resale return when you ultimately sell the property.
So once you've actually selected a home, done the property inspection or inspected it yourself, gone through the positive and negatives and you want [00:06:00] to make let's say the offer on the house, what are the steps after that?
Working with a real estate agent
So you typically be working with an agent.
The agent will go through the, should go through the comparable sales with you so you have a better understanding of what properties in the area that are comparable, are selling for so that you can understand that this is a reasonable price to offer.
They would typically advise you on what to offer and then you'd have a few conditions, typically financing and property inspection.
There might be special conditions if you're purchasing a condo that the pet is approved or [00:06:30] multiple pets.
Or if you're purchasing and then any condo, typically you would have a condo document review as well.
In newer homes, that's a pretty straight forward because they're typically isn't many documents to review except for the bylaws.
But if you're purchasing a resale one, you're certainly going to want to understand the financial health of the building, to make sure that there's no upcoming special assessments or surprises.
And then to make sure that you know what's planned for the building.
Are the windows being replaced? Is the siding getting repainted, things like that [00:07:00] that are going to impact how you live in the building.
And then so, and what is the step to actually, once you've made your, I guess your offer, what are the steps after that?
After making your offer
Once the offer is made and hopefully accepted, then you'd have a conditional period, which is typically about 10 days.
In that time, if you're purchasing a condo, the seller would provide you with the condo documents typically, unless it's a foreclosure.
And then you would get the condo documents reviewed by a professional reviewer unless you're comfortable reviewing [00:07:30] them yourself. And then we'd have the financing conditions.
So as soon as the offer is accepted, that will be sent to the lender and then they would get working on the file.
And then during that 10 day period, you would also do your home inspection.
You'd get a report from the inspector, and then if you're comfortable with that and the document review and you do have financial approval, then you're good to waive conditions and it's your home.
Karl Yeh: It's your home.
Is there a place in there for any legal like do you have to hire a lawyer when you're buying a house?
You can hire a lawyer and have a lawyer review the [00:08:00] purchase agreement and the documents.
Typically if you're purchasing a single family home or bare line condo, it would come with a real property report.
You can get that, you can ask for that or request that ahead of time during that conditional period to have your lawyer review it and make sure that the land is exactly what you're purchasing.
But a lot of people opt to not go that route, understanding that it's a relatively straight forward process and the contracts do protect them.
How long does it take to buy a home? What's the timeline?
Okay. And then from [00:08:30] there, so we went pretty much through the entire process of buying a home. How long does it normally take to do that?
That depends on the buyer.
Some buyers understand and know exactly what they want and they purchase pretty quickly after they start the shopping experience.
I would say on average it's anywhere from two to four months.
Some buyers take a couple of years or even longer, making sure that they get exactly what they want or they're looking for a specific property that doesn't come on the market [00:09:00] often.
But if you are purchasing and within that two to four month timeframe, I think it's important to look at more options than less because when you move into the property and you ultimately take possession, you want to make sure that you're comfortable with the and you never want to have buyers remorse and feel that you didn't see another option that may have worked better for you.
And the more that you see, the more that you become an expert yourself in the market and the more you understand that it is the right purchase when you ultimately do make it.
Perfect. Do you have anything else to add in terms of the actual first [00:09:30] time home buying process?
I would encourage people to understand lifestyle is probably the most important thing to them and not give up anything, sorry, give up other things such as a nicer home or a home that's slightly larger, to get exactly what they want.
If commuting to work and having people over and entertaining is key, then find a place that has a shorter [00:10:00] commute to work and it has a nice entertainment spare area, but perhaps maybe the basement's unfinished or maybe it's a smaller home overall.
Ultimately, I think you should choose what fits your lifestyle, not what not what fits the larger home or the nice finishes.
Question of the Day
Great. So the question of the day I have for you is
What part of the home buying process, whether you heard it today or your experience, did you find most challenging and why?
Let us know in the comment section below.
And if you want to know more first time home buyer [00:10:30] tips, watch this video here as well as other home buying videos right here.
And don't forget to hit the subscribe button to learn more from the experts.
Let us know if you have additional home buying related questions that we can answer by submitting them in the comments section below.
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About Kevin French:
Kevin French is a Calgary and area based realtor with a client focus. He specializes in a stress free home selling process that is built on customer service. Understanding that your home is one of your largest investments, Kevin employs a marketing mix that ensures you will maximize returns on your home sale. Diligent market research coupled with an in-depth understanding of the Calgary and area markets, allows Kevin to pinpoint the perfect price for your home.
In addition to perfect pricing, Kevin offers a suite of additional services such as professional photography and an interior designer to ensure your home shows its best. Kevin French has become a trusted name in real estate because he is results driven and works closely with his clients to produce the best results.