Understanding the Buying Process

UNDERSTANDING THE BUYING PROCESS

So you've decided its time to buy a house. Whether its your first house or your third, its still an exciting time!

With the new mortgage approval process now in place, it is probably in your best interest to be pre-approved for whatever dollar limit you will be looking to buy a house for. This comes in very handy when dealing with a multiple offer situation.

So, now that the legwork is done and you've found the house that you'd like to buy, the buying process begins:

- The first step is to put in an offer to purchase (Agreement of Purchase and Sale).

- The offer will indicate the address of the house, the offered purchase price, the date you take possession of the house, the list of chattels included, and the Schedule A which will have the conditions of the sale.

- The conditions will vary for many purchases, but most standard offers will contain the following:

the sale is conditional on the buyer: securing financing; having a home inspection; getting insurance (used more for older houses); selling their home first; and ensuring that the water and the septic system are ok (for homes not on municipal services).

- There is also what's called an 'irrevocable date' - this is the date and time that you, the buyer, can't change your mind and take back your offer to purchase. So the seller then has until the date and time set as the irrevocable time in the offer to respond to your offer. (Example: Irrevocable till 5pm on November 15, 20XX. You should get either a counter offer or a confirmation of acceptance to your offer before this deadline goes by.)

- So now that the offer has been countered the necessary number of times for both of you to agree on the purchase price, you have now conditionally bought the house! This is where the clock starts ticking on the conditions that you have in the offer.

Financing: you need to get financing approved by whatever time and date set out in the offer. You'll get a copy of the fully executed Agreement of Purchase and Sale to give to your bank. They will then get the financing condition completed for you. NOTE: If you can't get your financing in place by the deadline date that you have set in your offer, as long as the seller is agreeable, you may be able to write up an amendment to extend just the financing portion of the conditions. You should continue to show good faith and work on achieving the remainder of the conditions in your offer.
Home Inspection: home inspections are done for almost all homes these days. It's up to the buyer as to whether they want one, but very few houses are sold without one anymore. The home inspection is booked usually once you know that you've got your financing, as you will have to pay money for a home inspector (the price can range anywhere from $200 to $400 and you'll be provided with a written report from most inspectors). Just remember that the home inspection isn't your 'out' for this deal, but rather its so that you know what minor or major issues may be associated with this house. You then decide whether you can live with the issues, afford to repair/replace/fix some of the issues, or if they're really large enough, request a price reduction (normally larger issues are already taken into account when setting the list price of the house). And if they are really too serious, then the waiver for this condition is not signed off and the deal is over.
The above 2 conditions normally have the same deadline date, so they can be waived together. This will then leave the condition of the sale of your house. This will usually take a while, so if you have this condition in your offer, most likely the seller will still be allowed to have other people look at the house and put in an offer. If an offer comes in that is acceptable to the seller, you'll then be notified that you must remove your condition for the sale of your home from your offer. If you can, you will, if you can't, you won't and you loose the house. But otherwise, if you don't sell it in the given timeframe you can do an amendment to extend the date to continue to let you work on getting your house sold. Once your house is sold the purchase continues and you then plan on starting to pack and move!
Here is a link to the Buyer Process, similar to the one found on the Seller Process page.

UNDERSTANDING THE BUYING PROCESS

So you've decided its time to buy a house. Whether its your first house or your third, its still an exciting time!

With the new mortgage approval process now in place, it is probably in your best interest to be pre-approved for whatever dollar limit you will be looking to buy a house for. This comes in very handy when dealing with a multiple offer situation.

So, now that the legwork is done and you've found the house that you'd like to buy, the buying process begins:

- The first step is to put in an offer to purchase (Agreement of Purchase and Sale).

- The offer will indicate the address of the house, the offered purchase price, the date you take possession of the house, the list of chattels included, and the Schedule A which will have the conditions of the sale.

- The conditions will vary for many purchases, but most standard offers will contain the following:

the sale is conditional on the buyer: securing financing; having a home inspection; getting insurance (used more for older houses); selling their home first; and ensuring that the water and the septic system are ok (for homes not on municipal services).

- So now that the offer has been countered the necessary number of times for both of you to agree on the purchase price, you have now conditionally bought the house! This is where the clock starts ticking on the conditions that you have in the offer.