Buying your first home is an exciting milestone, but it’s also a complex process filled with important steps. Whether you’re purchasing a downtown condo or a cozy suburban home, being prepared is crucial to avoiding costly mistakes. Here’s a checklist of 10 essential steps every first-time homebuyer should complete before closing the deal.
- Get pre-approved for a mortgage
Before you even begin house hunting, secure a mortgage pre-approval. This tells you how much a lender is willing to loan you, giving you a clear price range and increasing your credibility with sellers. A pre-approval also locks in your interest rate for 60 to 120 days, protecting you from market fluctuations.
- Calculate all the costs
Beyond the down payment, there are numerous hidden costs such as land transfer taxes, legal fees, home inspections, insurance and moving expenses. It’s a good idea to budget for at least 1.5% to 4% of the home’s purchase price for closing costs to avoid surprises later.
- Hire a real estate agent
A knowledgeable real estate agent is your best ally. They will assist you to navigate the market, negotiate offers and connect you with other professionals like lawyers and inspectors. Best of all, in most cases, their commission is paid by the seller − not the buyer.
- Shop around for the right property
Take your time researching neighbourhoods, property types, school districts and transit access. Make a list of your must-haves and nice-to-haves, and don’t settle for less than what works for your lifestyle and budget.
- Make a competitive offer
Once you find the right home, your agent will help you make a strategic offer based on comparable sales, current market trends and the condition of the property. Be prepared for counter-offers, especially in competitive markets.
- Conduct a home inspection
A home inspection is crucial to uncover potential problems, such as foundation issues, roofing damage or outdated electrical systems. This is typically done before finalizing the sale and can save you thousands in future repairs.
- Secure final mortgage approval
After your offer is accepted, submit the purchase agreement to your lender for final mortgage approval. The lender will also conduct an appraisal to ensure the home’s value supports the loan amount. Don’t make any major financial changes − like changing jobs or making large purchases − before closing.
- Hire a real estate lawyer
A real estate lawyer is needed to handle the legal paperwork, review the purchase agreement, check for liens or encumbrances and facilitate the transfer of ownership. Your lawyer will also ensure all fees and taxes are properly paid at closing.
- Arrange home insurance
Before you get the keys, you’ll need home insurance to protect your property and satisfy your mortgage lender. Shop around for the best policy that covers everything from fire and theft to liability and water damage.
- Do a final walkthrough
A day or two before closing, conduct a final walkthrough to ensure the property is in the agreed-upon condition. Check that appliances work, repairs have been completed (if any were negotiated) and nothing has been removed that shouldn’t be.
Final thoughts
Closing on your first home is a thrilling achievement, but it requires careful planning and due diligence. Take your time, seek expert advice and stay organized. With the right preparation, you’ll be turning the key in your new front door with confidence. Remember, if you’re in the market for a new home, I’m here to support you.
