Home Buying Process

STEP 1

Choosing Your Agent

The purchase of real estate property is one of the largest and most significant financial investment of an individual's life. Furthermore, it is a complicated transaction involving subtleties and pitfalls which a qualified agent can help you navigate. 

Buyers have a number of options relating to the agent that represents them and the type of relationship they would like to form. The most common form of representation in the industry today is Agency Representation, which legally binds the agent to represent their "client's" interests to the highest standard of care and fulfill all of the Fiduciary Duties prescribed by the Real Estate Council of Alberta. If an individual decides to represent themselves in the purchase or sale of real estate property then there exists a "customer" relationship. The vast majority of real estate associates require a "client" relationship in order to provide the full range of services that buyers require and deserve. At KT Capital Realty we request this level of commitment in writing from all our clients to ensure we can provide them with superlative services and fulfill all of their expectations.

The process of choosing a real estate professional draws similarities from many fields. Characteristics to consider include - reputation, past performance, years of experience, market knowledge, professionalism, formal education related to the field, etc. The choice is broad and the ideal agent for every buyer will undoubtedly be different, it is important for consumers to speak with a number of agents before making their ultimate choice. 

Agent's Responsibilities

  1. Undivided Loyalty - The agent must act only in the best interests of the client and put these interests above their own and those of other people. The agent must avoid conflicts of interest and must protect the client's negotiating positions at all times.
  2. Confidentiality - The agent must keep information confidential, even after the client relationship ends. Confidential information includes personal information, information about the property, and information about the transaction (except information the law says must be disclosed or information the client agrees to disclose)
  3. Full disclosure - The agent must tell the client, in writing, about the services they will provide. They agent must also inform the client about everything the agent knows that might affect the relationship or influence the client's decision in a transaction, even if the agent does not believe the information is important. The only information an agent cannot disclose is confidential information from another agency relationship.
  4. Obedience - The agent must obey all the client's lawful, reasonable, and ordinary instructions. If the client insists on something unlawful, the agent must refuse and consider ending the agency relationship and any related agreements. 
  5. Reasonable care and skill - The agent must exercise reasonable care and skill in all their duties. They must meet the standard of a reasonable and competent member of the Real Estate industry.
  6. Full accounting - The agent must account for all money and property they receive while acting on behalf of the client.Everything a client puts in the care of an agent - for example, money, keys, or documents - is returned when the agreement ends.

Step 2

Consultation with a Licensed Real Estate Associate

Perhaps the most important step in the entire Home Buying Process is sitting down with a licensed Real Estate Associate and going over the entire process in detail. General and specific questions relating to real estate transactions and real estate properties should be addressed to ensure there are no uncertainties and complications down the line. It is imperative to establish early on the minimum and ideal requirements for the new real estate property in order to help define the search criteria and assist in the selection. Considerations should also be made regarding any areas where compromises can be made, in the event that the available budget doesn't allow for all the ideal requirements to be met.

Step 3

Deciding on Payment Options

There are a number of alternative options to finance the purchase of a real estate property and associated advantages and disadvantages with each option. Buyers should have an elementary understanding of the main sources of financing and undergo a pre-approval before committing to the physical viewing of listings. The three main sources of financing include,

  • Traditional Banks -  Ideal if you are in good standing with major banking institutions.
  • Mortgage Brokers - Mortgage Brokers utilize major banks and a number of alternative lenders to expand the options Traditional Banks have at their disposal.
  • Creative Financing - Ideal choice for investors or individuals who cannot access a mortgage through Traditional Banks or Mortgage Brokers. 

Step 4

Start the Search

After going thoroughly through your finances and deciding on the most appropriate payment option, it's time to start the most exciting part of the Home Buying Process. Searching for your ideal home within the constraints of a budget is never an easy feat, however, it is crucial to stay within your predetermine budget and avoid overspending, which is one of the most common mistakes homebuyers make. 

Step 5

Writing the Offer to Purchase

This is where the expertise of an experienced and knowledgeable real estate associate truly makes all the difference. There is no substitute for knowledge and experience, and both of these qualities are acquired and honed through continuous involvement in various real estate transactions. Conducting market research to establish the appropriate starting asking price, defining which conditions and terms should be utilized in the offer to purchase, negotiating the price and conditions with the seller's representative, are just a few of the benefits an experienced agent will provide to their clients.

Step 6

Offer to Purchase Acceptance and Satisfying Conditions 

After the Offer to Purchase is Accepted it will be time to proceed with the satisfying of the Buyer's Conditions. If the property is a detached home these conditions will usually include a Financing Condition and a Home Inspection Condition. Condominium properties will usually include an additional Condominium Document Inspection Condition and at times will exclude the Home Inspection Condition depending on a number of factors. A licensed Real Estate Brokerage will convey a multitude of services and advantages throughout this process and will ensure that everything is completed in accordance with the Alberta real estate legislature.

 

Step 7

Pre-Possession Preparation

Possessions can vary anywhere from 15 days to multiple months in the future, with a typical possession being anywhere from 30 to 60 days. There are a number of important expenses and considerations that should be addressed and taken care of prior to the possession date.

Lawyer - After all Conditions have been Satisfied/Waived and the sale is firm all relevant documentation will have to be conveyed to your lawyer who will transact the transfer of land and money. If you still have not decided on a lawyer now would be an apropos time to pick one, keeping in mind that there are numerous real estate lawyers and their prices vary substantially. When meeting with your lawyer prior to possession you will be required to provide your insurance information, make payments for any outstanding adjustments or taxes, provide the remainder of your down payment, and finalize anything else that is required by law.

Down Payment - Ensure that you are fully capable of meeting the down payment requirements established in the purchase contract and remain cognizant of the liquidity profiles of all the assets you will be devoting to the purchase. Some assets can take over 30 days to fully liquefy and failure to initiate the process early enough can leave you in a really difficult situation on the date of possession.

Movers - If you are utilizing the services of professional movers, make sure to book them early and definitely shop around. They vary substantially in what they charge and always investigate if there are any hidden fees that are not disclosed in the provided quotes.

Utlilities - Makes sure to change your utilities over to your new home and cancel them at your previous residence. This will include your phone, cable, internet, power, waters and sewer, and gas services.

Insurance - This step involves a simple phone call and/or a lengthy survey. You will be asked questions regarding the square footage of the home, the age of the structure and its main systems, including furnace, roof, electrical, and plumbing specifications.

 

Step 8

Possession Date

We will meet with you at the property on the date of possession and complete a walk-through of your new home. This will be the time to make sure everything previously agreed upon in the contract has been satisfied, there is no damage by the moving out process, all appliances are in working order, and all the home systems are performing to the required standard. At this point, if there is any discrepancies or transgressions the lawyers will be notified and the appropriate steps can be initiated by both parties to effectively resolve the discrepancies.