Dreaming of Home Ownership? Everything You Need to Know to Buy a Home

The Calgary and surrounding area real estate market has been exploding with new listings as people move on to the next chapter of their lives.

But that’s great news for you since you’re on the hunt for your first home! (or, next home!) 🥳🎉

There are many moving parts to buying your first home. And if you’re unfamiliar with how the process works, it can be confusing and overwhelming.

We don’t want that! 🙁

I want you to feel prepared and confident about your purchase. That’s why I’ve created this guide so you can feel at ease about this big leap forward.

The Home-Buying Process

Here are the major 7 steps on the road to homeownership:

1. You Need to Find Out How Much House You Can Afford

Figuring out your budget and monthly mortgage payment will make house hunting soooo much easier (trust me on this one).

You don’t want to start touring show-homes or open houses, fall in love with a house, and then realize you can’t afford the payments. 😭

Especially because you should only be spending roughly 30% of your gross monthly income on housing costs, including:

Principle and interest
Property Taxes
Condo and/or HOA Fees

I recommend speaking with an experienced mortgage broker so you know exactly what you can afford. That’s why I’ve partnered with the team at Advanced Mortgage. Their team will help you through each step along the way.

They also offer an amazing mortgage affordability calculator so you can get an idea of what your monthly payments would look like.

2. Saving for the Down Payment

Once you’ve got an idea of what you can afford, next up is to save, save, save! 🤑

In Alberta, the minimum you can put down on a house is 5%. If you’re able to, it’s best to put down 20% or more. The more you can put down, the better. This helps get you the lowest interest rate and lower monthly payments on your mortgage.

And who wouldn’t want that?! 🤩

Other things that you need to save for are:

Closing costs (typically around 2 to 4% of the purchase price)
Moving expenses (remember to budget for extra helpers and pizza!)
Furniture and/or appliances for your new place

A great way to save for these upcoming costs is to place your money into a TFSA (tax-free savings account) or a FHSA (first home savings account). These accounts are tax-sheltered, meaning that any investment growth can be withdrawn tax-free when you’re ready for it. 🤩

3. Get Pre-Approved For a Mortgage

Things are starting to get exciting now! Finally sitting down with a broker and getting a pre-approval!

A pre-approval means you’ve got a conditional commitment from a lender or bank to loan you the money for your house. 🤝

It also means that:

You’re looking at properties you know you can afford
You’re in a better position for negotiations
It shows that you’re serious about your offer
You’ll know your interest rate
You’ll close and be able to move in faster!

How are you able to move in faster? 🤔

Sellers will take your offer more seriously knowing that you’ve done your “financial homework” and have had your credit reviewed.

4. Choose an Agent and Start House-Hunting!

Choosing a real estate agent is a very personal process. It’s going to look different for every individual and family, but here are the top things to keep in mind when choosing a real estate agent:

You may need to interview a few REALTORS® before you find someone who jives with your personality
Choose someone who is honest and takes the time to answer your questions (even if you feel like they are silly!)
Look into their qualifications and accolades, and choose someone who has a proven track record
Choose someone who has in-depth knowledge of the city and surrounding neighborhoods that you are interested in (usually they’ve got a few secrets up their sleeve about the best places to live! 😉)

Psst! 👀

Hey, I’m Tara, and I’ve helped hundreds of people on their house-hunting journey! 👋

Backed by many years in the industry, on-point negotiation skills, and a commitment to excellence, I’d love to make your next move a positive one! (And FUN, too!)

5. Make an Offer

Things are getting serious! You’ve managed to drag your spouse and kids along to every house you wanted to see (and dealt with the whining!) You walked into that last house and just knew it was the one!

Kinda sounds like a movie, doesn’t it?

Even so, this is usually how it plays out! 😍

There will be something about the house that you fall in love with. That checks off every box. That gives you that homey feeling.

Now it’s time for your agent to make an offer on your behalf!

But, what goes into the offer?

Glad you asked 😜

Your chosen real estate agent will help you present an offer to the sellers
Your purchase agreement will include things like:
- Buyer and seller info
- Property address
- Purchase price and down payment amounts
- Items to be left with the home (such as curtains, furniture, and appliances)
- Contingencies (such as a home inspection)
- Closing date

6. Home Inspections & Appraisals

Woohoo! You’ve completed the most time-consuming part of buying a house! Now it’s time to work through those contingencies in the contract.

But, what are contingencies in real estate?

Contingencies are the terms of the contract that need to be met before the sale can be finalized. This protects you and gives you the chance to amicably back out (and keep your hard-earned money!) if things go south.

Seriously — do not skip contingencies, or rush through this part of the process! 🙅

Home inspections and appraisals are critical components of the sale that will provide HUGE value in the long run.

Home Inspections & Appraisals 101:

Use a trusted and well-known home inspection company to inspect the house. We recommend our trusted friends at (INSERT LINK HERE)
Depending on the age of the home, other inspections to consider would be radon testing and termite/pest inspections
An appraisal tells you what the property is worth. Your lender usually requires this to protect themselves, as well as yourself

You do not want to be paying way too much for a house that isn’t even worth the money you originally bought it for!

Properties are supposed to be an appreciating asset, not a depreciating one. 😉

7. Finalize Your Mortgage & Seal the Deal!

Congratulations! Time to bust out those red solo cups — you’re officially a homeowner!

Closing on your first home is a big deal. And because it’s a big deal, you want to make sure everything is just right.

Before you’re given the keys to your new place, there is one final hurdle: paperwork.

But don’t worry, you’re almost there! 🥳

Make sure you review everything with your broker or lender about your purchase. You’ll also need to pay:

Closing costs
Property taxes
HOA and/or condo fees (if applicable)

Final Things to Know When Buying a House

Even though the home-buying process can be lengthy, it’s such a worthwhile investment!

Riding on that “home-buying high,” there are a few final strings we need to tie together to make this process as smooth as possible for you. Some reminders to:

Get home insurance
Get mortgage or separate life insurance
Make sure you set up your utilities at the new address
Especially if you’ve just bought a newly built house — schedule duct cleaning and furnace maintenance before you move in (and get those filters!)
Give the inside of your cupboards and drawers a good wipe-down before putting your items inside

And for those who are still feeling a bit overwhelmed, or do better with checklists, here is a handy homebuyers checklist. Made by the Government of Canada and the Canada Mortgage and Housing Association, you can reference this through the whole process.

Buying a home is such an exciting time and I’d be honored to help you navigate the process. As a top-producing REALTOR® with over 15 years of experience, I’m committed to getting you the best results possible! And, of course, making your next move a positive one!