Joanna Cutaia-Beales
Real Estate Broker

Hamilton Ontario Real Estate Agent

5 Things You Need to Do Before Buying a Home

When you decide to purchase a home, there are several factors that come into play throughout the home buying process. While it's an exciting time for everyone, there is far more to purchasing property than simply house hunting for the perfect home! 

In the case of first time home buyers, getting your "ducks in a row" in order to actually purchase a home can be slightly confusing; you're likely to have questions about things you need to prepare, or items you have to have in place, before you can fully follow through. When it comes to real estate, there are 5 key things I always recommend people do before diving into a real estate transaction.

Work with a Realtor who actually knows your city and its neighbourhoods

While you may have spent several weeks (or months) looking at homes online, or trawling through real estate sites for available properties, rarely can these sites provide enough information on listings and homes to prepare you for purchasing a property. This is where an experienced, knowledgeable Realtor comes in. 

Of course, not every home buyer chooses to work with a Realtor, but those who do benefit greatly from the Realtor's expertise and first-hand knowledge of the city and its neighbourhoods. For example, a Realtor (like yours truly!) who knows Hamilton inside and out would be better equipped to provide you with current market stats, up-to-date information, buyer resources, and guidance + advice. Realtors can also provide CMAs (comparable market analyses) if you're curious about the value in a property or the homes in a certain neighbourhood. 

Know what you can afford (and what you may need to save for)

Everyone has a vision or idea of their perfect home, but it's rare to find a home that has every single thing you want, in the right price range, to boot. That's why it's important to understand what you can afford as well as the amount you're willing to spend on renovations, updates or repairs when thinking of purchasing a home. 

Obviously, no one can account for every type of update or repair a home may need, however, knowing what you're able to afford and how much you're able to spend on "extras" (like renovating a kitchen, for example) is extremely helpful as a home buyer when you're scouting prospective properties. You may need to sit down with your bank representative or accountant to understand your finances and be aware of how much you can spend. 

Ensure you can cover the deposit and down payment

When you purchase a home, you will need both a deposit as well as a down payment (the difference between the two is explained here). One important step in the home buying process is to ensure you have the funds to cover both of these payments. Some home buyers have family members who are willing to help cover these expenses, while others may have to secure a loan. Whatever of your situation, your Realtor will be able to assist you in figuring out the costs for the property you're interested in, and can advise you on the professionals you may have to meet with to secure the funds for these costs. If you're a savvy saver, you may already have enough to cover these two costs!

Get pre-qualified and pre-approved

Especially important due to the new pre-qualification guidelines set out in 2018 for Ontario, getting pre-qualified and pre-approved for a mortgage is key in your home buying process. But what do these terms mean, and how do they impact you as a buyer?

To put it simply, pre-qualification refers to the amount you could potentially afford, given your current income, expenses, etc. Pre-approval refers to the process in which you are approved for a loan from a lender. 

Before purchasing a home, it is crucial that you meet with your financial representative or banking institution to determine your pre-qualification and pre-approval for a mortgage. It's also important to understand that pre-approval does not equal approval, and thus getting these ducks in a row will help you greatly when you're ready to seriously consider buying property. 

Go with a home inspection

If you're at the stage in the buying process where you've found a property and are ready to invest by purchasing it, you'll want to consider doing a home inspection. 

A home inspection is basically a professional walkthrough and inspection of a property to determine its condition; it focuses not on the aesthetic of the property, but rather, the "performance" of the home. You may wish to have a home inspection done to better understand what state the property is in, such as the condition of the roof, foundation, insulation, etc. I recommend home inspections to my clients because they help to ensure that there are fewer "surprises" that could catch you off guard as a home owner. 

One thing to bear in mind is that home inspections are not insurance policies, nor are they energy audits or guarantees. For example, home inspectors aren't able to "see through walls," nor can they predict that there will never be any issues with the property. What a home inspection does achieve is a professional assessment of the systems and condition of the home as the inspector believes it to be.