JUMPing In: What To Expect When Buying

JUMPing IN: What To Expect When Buying

It’s time to JUMP IN. Here is what you can expect when buying.

The goal of this page is to help provide our buyers with more knowledge and a better understanding of the real estate purchasing process. The following is a breakdown of the steps in you’ll take in buying a new home:

1. Obtain a Mortgage Pre-Approval Letter

If you are planning to finance your purchase with a mortgage, start by getting in touch with a lender. Your Jump agent will provide options for you. A pre-approval is a “preliminary” approval letter provided from a lender indicating how much you can spend. Most pre-approvals are valid for 90 days and it is included in the offer package to indicate their offer is backed up financially with minimal risk of falling through. For more on Pre-Approvals, check out our post.

2. Submitting Your Offer

As the buyer, your agent will prepare the offer paperwork. This will outline the main terms you, the buyer, are offering to the seller to purchase their property. This includes price, deposit amounts, performance dates, additional provision, and conditions (if any). The offer is submitted either electronically or the seller may have an in-person offer presentation. The seller will either accept, reject, or counter your offer. If an agreement is reached, the offer is signed. Acceptance must be communicated to make it a legally binding and enforceable agreement. Delivery of the deposit occurs within 24 hours of acceptance.

Possible scenario: Multiple Offers

This occurs when a seller receives two or more offers on their property. If the seller’s agent expects this, an “offer deadline” is typically set. Prior to this date, the seller’s agent is not allowed to disclose any offer prices without the seller’s consent. If a pre-emptive offer is viewed, your agent will be notified and you’re given a chance to offer as well. Once the seller has reviewed all offers they will either: accept the best offer in their opinion, negotiate on an offer, or ask for a “highest and best” from all the bidders to see if any buyer will up their offer. However, in today's market the seller will most likely accept one of the offers without negotiation so it is important for you to make your best offer when you submit.

3. Amounts & Dates of Deposits

The first deposit is due 24 hours after the acceptance of an offer and is to be delivered to the listing brokerage. The cheque will be held in Brokers Trust and should be made payable to the listing brokerage unless otherwise noted. If further deposits are required as per the agreement of purchase and sale, they must be made on the dates outlined therewithin. Should a condition not be met, deposits can only be returned with a mutual release.

4. Getting Your Offer Accepted

Your offer is considered ‘accepted’ once the buyer and seller come to an agreement, both parties sign the offer, and acceptance is relayed. At this point the contract is binding and enforceable.

5. Schedule Your Home Inspection

The timing of this step can vary. In today’s Windsor real estate market this step will most likely happen earlier. An offer with a condition of inspection will almost certainly find itself at the bottom of a seller’s list of offers. Some seller’s will have the home pre-inspection for peace of mind for buyers. If it is not, it is advised to bring an inspector with you when viewing the home. This can be costly over time to only hire an inspector on a home you have serious intentions on. Don’t be afraid to view the home and if it is right, bring an inspector through on another visit. This step is vital and should never be skipped. Learn all about home inspections in our blog post here.

6. Hire Your Real Estate Lawyer

It is critical you hire a real estate attorney when purchasing a property. Ideally, it is one whose primary focus is on real estate and will protect your best interest’s every step of the way. A real estate attorney will prepare all the legal documents, ensure there aren’t any liens, easements or covenants on the property, and make sure the property has clear title.

8. Review & Complete Your Agreement of Purchase & Sale

This is the extensive, legally binding contract between you, the buyer, and the seller. The terms outlined in the document reflect the terms outlined in the offer that was submitted. Changes can occur but only if they are mutually agreed upon. This agreement defines what each party must do prior to and up to the closing date.

9. Continue Mortgage Application Process

The mortgage application process starts when you apply for your pre-approval and your lender does an initial evaluation of your financials. The lender will outline all of the items they need from a buyer at the very beginning of the process and it is extremely important that you provide timely and accurate information to your lender.

10. Appraisal From Lender

An appraisal is an evaluation of a home’s value conducted by a licensed appraiser. They are an unbiased, 3rd party and the purpose of an appraisal is to allow the lender to ensure that the home’s value is enough to warrant the mortgage you are looking to secure. The appraiser has specific guidelines to follow in order to determine the value in their opinion. If issues arise from the appraisal, your agent will contact you with a plan of action.

11. Monitor Your Mortgage Commitment Date

A critical date, it is the date by which your lender must provide their commitment to financing your purchase. Keep an eye on this date as it approaches. It should never pass without commitment, extension, or notice of termination. Failure to secure financing can result in legal action against yourself.

12. Schedule & Conduct Final-Walk-Through of Property

Before you close on your property, a final walk-through is completed. This helps ensure that the property’s condition hasn’t changed since the acceptance of the offer, any agreed upon repairs have been made, and the agreed upon terms of the contract have been met. This typically takes place the night before the closing date or the morning of closing.

13. Time To Close

This is the date on which the deed is executed and transferred to you. This officially makes you the homeowner! The date itself is usually a firm date that is not easily changed. Delays can occur due to various reasons such as title issues, an extension may be granted and both parties would have to agree to a new date. The property does not officially transfer to the buyer until funds have been dispersed and the property goes on record at the Registry of Deeds.

Here at Jump Realty our agents will give you honest advice on what course of action is best for you in their professional opinion and will always put taking care of your best interests first! With offices in Windsor, Tecumseh, Kingsville, and Chatham, no matter where you are, a Jump agent is ready to help. Please contact us for any housing needs and let us give you a better real estate experience!