Buying your first home can seem like a complicated and daunting task but luckily there are trained professionals to help you along the way. Knowing what these professionals do and what their role is when you purchase your first home can help to demystify the process. The answers may surprise you!
- Mortgage Broker – Mortgage rates in Canada are at a historical low which makes it a great time to buy your first home. But where do you go to get a mortgage? You can go directly to your bank and negotiate a rate for yourself but a mortgage broker can often get you a better rate, even at the same bank! They will also go through the pre-approval process with you so you know what you can afford. Most brokers are paid by the institution that gives the mortgage loan, so there is no cost to you. Check the licence status of any individual mortgage broker in Alberta at http://www.reca.ca.
- Real Estate Agent – A licenced real estate agent is a member of the Alberta and Canadian Real Estate Associations and is called a REALTOR®. This professional plays a big role when it comes to negotiating the price of your new home and closing the deal with legally binding contracts. A REALTOR® will show you homes that best match your needs & wants and will help you evaluate the property so you can determine how much to offer. A real estate agent is paid a portion of a commission by the seller, so there is no cost to you as the buyer.
- Home Inspector – Once you have made an offer on your new home, the next step is to get the home inspected by a professional property inspector.There is no such thing as a perfectly built home, so it’s important to know the condition of your home before you finalize the deal. Although the inspection will cost you between $450-500, it is worth every penny. When hiring an inspector, ensure that they have errors and omissions insurance. After the inspection, you will receive a written report that summarizes the inspection and points out any defects and estimated costs of repairs. This report can help you decide if this home is right for you and can be used to negotiate price.
- Real Estate Lawyer – The lawyer’s job is to act as an intermediary between the buyer & seller as the money is being transferred. They also make sure you have a valid title (proof of ownership) with no claims against the property, find out if any taxes are owed, draw up the mortgage documents, ensure the house complies with local by-laws and make any property tax adjustments. Your lawyer should explain the closing process which includes getting property insurance and closing costs such as registration of the property. Both the buyer and seller pay lawyer fees which are about $1350 and $850, respectively.
Buying a home is the biggest purchase you will make in your life so it’s important to understand what you are getting into. If you would like to find out if home ownership is right for you and learn more about the process, I highly recommend checking out www.thehomeprogram.ca and attend their free workshops. Until then, happy house hunting!