Advice for First Time Homebuyers – Part One
Are you considering making your first real estate purchase? Being a prepared home buyer will help you make informed decisions during the home-buying process and give you a competitive edge when potentially bidding against other buyers.
The real estate market fluctuates often, but doing your homework beforehand will help you better understand how it works and the ins and outs of the buying process. Before jumping into the market for a new home, you should have the following resources ready.
Your Real Estate Agent
A common myth is that first-time home buyers have to pay for their real estate agent. Most of the time, real estate agent fees are not included in first-time home buyer closing costs. It’s the seller who pays the commission for a buyer’s real estate agent (which is usually a two to five per cent of the selling price).
A real estate agent acts as a home buyer’s representative. They help negotiate your offer terms, research the market value your desired area, as well as potential properties in area(s) of interest. It’s particular important to have an agent who understands the area of the town or city you’d like to purchase your home in. Your real estate agent should also have an adept understanding of the market price, which is a crucial component to ensure you do not overpay for your new home.
Your Real Estate Lawyer
Services provided by a real estate lawyer often vary depending on individual circumstances. Real estate lawyers will help you facilitate the real estate transaction—they act as the middle person between the buyer(s) and seller(s). They have many other crucial responsibilities, including:
- Ensuring that all of the terms and conditions are met
- Preparing title insurance and registering the property under your name
- Preparing a statement of adjustment
- Reviewing inspection documents
- Making applicable tax payment(s)
If you’re buying a pre-construction home, you’ll need to have a lawyer to review the Purchase & Sales Agreement (PSA) forms. It’s recommended this step be completed immediately after the PSA forms have been signed.
Your Mortgage Pre-Approval
Obtaining a mortgage pre-approval will help you understand your financial limitations. Most buyers understand that establishing a budget is key, but it can be very tempting to make an offer on homes outside your budget. Mortgage pre-approval establishes the mortgage a lender is willing to give you based on your current financial situation and effectively puts a ceiling on your budget.
Are you looking for sound legal advice for your organization, business or corporation? Contact KGPC LLP today.
For more, read: Advice for First Time Home Buyers – Part Two