TEN Steps to help a Buyer, get the most from a real estate transaction

Most people who have never bought a property are usually confused about the buying process and are often anxious and stressed out. Most Realtor® don't help Buyers by not taking the time to explain to them the entire buying process.

Here are 10 steps to guide you, not written in stone, but if known will provide you as a Buyer some comfort in knowing what to expect when you are thinking of making your 1st purchase.


Step 1. 1st time Buyers should contact their bank and get a pre-approval done. A pre-approval gives you a guideline on how much you can borrow without burdening your finances. In addition, before considering buying, you want to make sure you have saved, outside of your emergency fund, a minimum of 5-10% for down-payment and 2% for closing costs of the total amount the bank says you are approved for.
So if the bank gives you a pre-approval for $200,000, you want a minimum of $10K to $20K in savings and additional $4K for closing costs.

Step 2. Once you know how much you can borrow you want to consider the location you'd like to live in. Drive by, and consider the pros and cons to living there. How does it affect your drive to work, amenities, clubs, malls, schools, etc.

Step 3. Consider your family needs and if your looking to add to it (baby). You want to consider a home/ condo that you would live in for at least 2 years so you can recoup your investment if you need to sell.

Step 4. Now that you know how much you can afford, where you want to live, what size and type of property. You want to hire a real estate agent to help you do the search, show you the properties, negotiate, do the paper work and guide you through till closing. When viewing properties remember the 70-15-15 rule. No home is "perfect". If it meets 70% of your needs and you can change 15% and the other 15% you can live with, then you have a property you should consider putting an offer on. Sometimes it takes just one property and at other times ten or more before you find the property you like. On average five to seven but don't discount the first, just because it so happened to the be the first on the list. Often it is the best.

Step 5. Your Realtor® will do market comparisons of properties listed and sold and guide you to a price for your offer. You can do three things. If you agree offer that price. If not, a lower or a higher price. At the end of the day you decide what you are comfortable in offering. Your Realtor® is obligated by Law to provide you with fiduciary services and is required to write whatever you want. However, he/she will make it known to you if your offer is too low or too high, in order to take care of your best interests and fulfill their legal obligations.

Step 6. You'll enter several rounds of negotiations depending on the type of market you are buying in. Or your offer can be rejected and dies. Currently in a hot Seller's market, where there are multiple offers on properties, Buyer's end of paying listing price or more and have to put in firm offers with large certified deposits and waive most conditions to be successful.

Step 7. After negotiating and acceptance of offer. If there are conditions, such as inspection or financing, they must be waived within the contract period in order for the deal to become firm. Your Realtor® will guide you and help you setup the inspections and you would take a copy of the contract to your bank and get a firm mortgage approval.

Step 8. The firm deal is now taken/faxed to your Lawyer, who will now handle the final stage of closing the deal and will deal directly with the Seller's lawyer. In the meantime, your Realtor® will periodically keep in touch with you and should be available for any questions. You should also prepare to start packing and plan your move on or after closing day.

Step 9. Your Lawyer will do the Title search and make sure there are no hiccups to closing your deal. The lawyer's office will contact you and setup an appointment and ask you to bring the closing funds from your bank, usually in the last week before closing.

Step 10. On closing day, the Lawyers will electronically close the deal, transfer funds, and you will get the Key to your home.

* NEVER PURCHASE A LARGE TICKET ITEM until AFTER you have CLOSED. The amount the bank will lend to you depends on what your debt to earning ratio is (T.D.S). If you accumulate more debt before your home closes, even though you have a firm mortgage commitment, the banks will REDUCE what they lend you and you would have to come up with the difference on closing. Some times people can't come up with the dollar difference and close the transaction. Not only do they not get the home, to make matters worse, they lose their DEPOSIT!


Learn how you can be part of Jas's 20% commission plan to help charities at: www.LetsMakeADeal.ca and while your there read his Personal Biography and see if he's a Realtor® you would enjoy working with.

Jas Jagpal, Sales Representative, RE/MAX Dynasty
Cell 647-272-6629 E: jasjagpal@rogers.com