Purchasing a home in Calgary?

WE’VE PREPARED A HOME BUYER’S GUIDE FOR YOU

Your home is the single most important purchase that you will make. It will affect your family, your finances, and your lifestyle.

Whether this is your first real estate purchase or you’re an experienced buyer, this decision must be made carefully.

We’ve prepared the following guide to assist you when purchasing a new home.

VIEW GUIDE
home buyers guide real estate calgary

Home Ownership

Buying Your First Home?

There are special programs that may apply to you, and you may like a little more detail on what you should be doing for preparation! So… #join the club!

Are You Ready to Buy?

Property ownership is an excellent investment whether you’re looking for your dream home or to expand your investment portfolio. Owning real estate is one of the least risky ways to build equity — as long as you’re financially ready. The Canadian Mortgage & Housing Corporation (CMHC) recommends some things that you should consider when deciding to buy:

Financial Security

Your home can provide you with financial security due to capital appreciation— as the value of your home increases over time, so does your equity.

Financial Stress

Added financial responsibilities such as: coming up with the down payment, making regular mortgage payments and ongoing costs associated with home ownership can tie up a lot of you cash and put stress on your finances.

Maintenance

Keeping your home in good shape requires time and money.

Responsibility

You alone are responsible for payments, repairs, and maintenance.

Flexibility

You can decorate or renovate your home to meet your family’s needs and personal tastes.

Considerations

Why Do You Want To Buy?

Are you tired of paying rent? Have you decided to pay your own mortgage and not your landlord’s? Have you outgrown your current home? Are you looking for a rental property? Would you like a larger yard? Would you rather live in a different area? Do you want to shorten your commute?

Having a clear sense of your reasons for buying will help you choose the right property.

Preparing To Buy

Now that you’ve decided that home ownership is right for you, you will need to determine if you are financially ready. At this point it’s a good idea to take a look at your entire financial picture.

You should be prepared and fully informed so you understand your financial responsibilities in the future.

Deciding to Buy

People have a lot of different reasons for deciding to buy a home.

Some are first time home buyers looking to step into their own space, while some are buying to accommodate a growing family, and others still are seeking a sound investment or to downsize from an existing home.

The first step in the home buying process is knowing why you’re buying so you know what you’d like to look for.

yyc real estate club calgary

Get a Financial Overview

How Much Can You Afford?

There are two general affordability rules that will help you figure out what you can afford on a monthly basis in your current financial situation:

  • Your monthly housing costs shouldn’t be more than 32% of your gross household monthly income. Monthly housing costs include: mortgage principal and interest, taxes and heating expenses.  This is known as your Gross Debt Service (GDS) ratio.
  • Your entire monthly debt load shouldn’t be more than 40% of your gross monthly income. This includes: housing costs and other debts such as car loans and credit payments.  This is known as your Total Debt Service (TDS) ratio.

These numbers help you to determine your overall financial health. They’re also part of what your lender will consider when determining how much you can be approved for.

Check Your Credit Rating

Your credit score will have a huge impact on what type of property you can buy, and at what price.

It is first recommended to check your credit rating either on your own or with an experienced lending institution so that you can determine what you can afford. The lender will research your credit ratings from the two credit reporting agencies Equifax and Trans Union or you can go to them directly online. We will be happy to recommend experienced, knowledgeable lenders in the residential real estate market.

home-finances

Get a Mortgage Pre-Approval

Pre-Approved Mortgage

Having a pre-approved mortgage amount makes the search for your new home much easier and less time consuming because you have a good price range in mind. There a few pieces of information you will need to have handy the first time you meet with a lender:

  • Your personal information including identification such as your driver’s license.
  • Details on your job, including confirmation of salary in the form of a letter from your employer.
  • Your sources of income.
  • Information and details on all bank accounts, loans and other debts.
  • Proof of financial assets.
  • Source and amount of down payment and deposit.
  • Proof of source of funds for the closing costs.
pre-approved-mortgage calgary

House Hunting

Time to Go Shopping

Once those preparations are out of the way, it’s time to find the right property for you. You’re likely to spend years in your new home, so finding the right one is crucial.

Take a Drive

Get to know the communities, complexes, or subdivisions, which interest you. Drive around and get a feel for what it would be like to own a property in the area. Start getting a sense of the amenities available in those areas.

Narrow your Search

Select a few properties that interest you the most and have the YYC Club make appointments to visit them.

Time to Buy

Once you have picked out the property you want to purchase the YYC Club will help you make an offer that the seller will accept. The YYC Club will investigate the potential costs and expenses associated with the new property.

home shopping calgary

The Process, Step-by-Step

The deposit is usually delivered to the listing brokerage upon acceptance of the offer. The deposit will be held in trust until closing and then applied to your purchase price. For example if the purchase price is $410,000 and the deposit is $5,000 then $405,000 will be owed at closing.

Once your offer is accepted the conditional period begins. All of the conditions in your offer must be met before it can become firm and the deal finalized. Most offers contain the following conditions:

  • Finance – Mortgage approval for the purchase will need to be obtained to meet this condition. We would be happy to recommend an experienced mortgage specialist.
  • Appraisals – Sometimes mortgage providers will order an appraisal on the home to make sure that the home is worth what they are lending you to purchase it. If an appraisal is required it will be scheduled by your mortgage provider.
  • Inspection – A professional home inspector will thoroughly check the home and let you know if there is anything you should be concerned about. We can recommend an experienced home inspector for you.
  • Insurance – If you are obtaining a mortgage, you will be required by your lender to purchase insurance on the property. You may be able to save money on homeowners insurance by shopping around for insurance.

And sometimes …

Sale of Purchasers Property or SPP

  •  If you are purchasing a property and still need to sell your current property you might make this condition part of your offer. The YYC Club can  guide you on whether to include this condition in your offer or not.

When all of the conditions have been met and the appropriate paperwork is signed and submitted the offer is considered firm.

Conditions, Inspections & Appraisals

An experienced group like the YYC Club will add tremendous value during the home search, the drafting of the contract, negotiations and closing of the purchase.

Now that all of the conditions have been met and your offer is firm, congratulations you just bought a new home! All that’s left to do is to get ready to move in on closing day.

It’s almost time to sit back and relax in your new home! But there are still a few things you need to think about. The final section of our Home Buyer’s Guide focuses on packing to move as well as switching over utilities, changing your address, and preparing for your closing.

Once the offer is firm and both parties have signed off on it, it’s a good idea to start looking at movers. The YYC Club has several moving companies our clients have dealt with and can recommend to you.

If you opt to pack and move yourself then it’s a great time to start collecting boxes and get to packing!

You should also start contacting utility companies and government bodies to let them know about your new address. Once your offer becomes firm the YYC Club will send you a closing package which includes a checklist of everywhere you should call to change your address.

We will also provide you a list of useful numbers for the activation of home services and utilities in your new home.

The YYC Club is here to assist you should an unforeseen glitch pop up, even at this last stage. Something at the property breaks down, or some other minor detail – no need to worry. We have encountered these problems before so we know how to handle them efficiently and in a timely manner.

The biggest misconception when it comes to closing is that come closing the new owners get the keys right away and can start moving in, although this would be ideal it’s simply not the way things work.

In order for the keys to be passed from the seller to the buyer you have to wait for the title to be transferred. The title transfer is handled by your lawyer, who is the buyer’s biggest ally come closing day. Your lawyer will notify the YYC Club after the title has transferred and allow the keys to be handed over. This generally happens between 10:00am and 5:00 PM.

If possible we recommend scheduling movers in the afternoon or the day after closing – this way you avoid paying movers to sit around while you`re waiting for the keys.

Once you do get possession of your new home it’s a good idea to do a quick check of the house to make sure everything is as you agreed i.e. appliances are in good working order, if something isn’t right contact your lawyer right away.

home-buying-proces
  • BOOK A CONSULTATION

    Whether you are buying or selling a home, we can help! Let's have a chat over coffee or your preferred drink and we will get you started. We offer a casual environment with absolutley no obligation or commitment.