Congratulations! You’re finally at a point where buying your first home seems possible. You’re scared but excited, intimidated but optimistic, nervous but determined. Buying a home can be a rollercoaster of emotions with many steps. In this guide, we’ll walk you through the home buying process in Nova Scotia, from getting pre-approved for a mortgage to finalizing your purchase.
The Emotional Rollercoaster of Home Buying
Envisioning Your Dream Home
Imagine you’re out with your realtor looking at homes. After seeing about six, you arrive at the doorstep of your dream home. The moment you walk in, you can see yourself and your family living there. It’s perfect; the one you’ve been dreaming of! Unfortunately, you’re not the only one who thinks they’ve found “The One.” Twenty others have viewed this home because of its great location and low price. You make an offer that’s much higher than the asking price—no one is getting in the way of you and your dream home. The offers are presented; the seller decides to go with someone else. Your offer is declined. You are heartbroken.
Every other house you view just doesn’t compare. You feel defeated and are losing hope. Then, five days later, you get a call from your realtor. The other offer on the home fell through… and yours has been accepted! Everything changes with that quick phone call. You are ecstatic, jumping with joy! There’s hope again.
The Reality Check
You call your mortgage broker and they start preparing the financing. You call the property inspector to set up a time to view your future home. You feel like things are finally coming together and start telling all of your friends and family about your new home. You’ve got Pinterest boards, design ideas, and paint choices figured out. You already know how you’re going to add your special touch to each room. Then the property inspection reveals a major structural crack in the home. Without digging up the foundation, they can’t tell whether it’s a simple fix or a huge project that could cost tens of thousands.
You’re already emotionally invested in this house. You’ve told all of your friends and family about your dream home, so what do you do now? Do you act on emotion or logic? This common scenario gives you a glimpse into the emotional rollercoaster that buying a home can be. Is it always like this? No, it’s not, and I hope this isn’t the case for you. I want it to be a simple, straightforward, and enjoyable process for you. I just want you to be aware of what the process may look like and be prepared for unexpected things that can come up.
My best advice is to not emotionally commit yourself until your financing and inspection conditions have been met. Telling your friends and family about your new home before you have all the facts ties you to it and clouds your judgment. Once you have been fully approved for financing, the property inspection has come back up to your standards, and the offer has gone firm, then you can tell everyone you know. Throw a party, pop some bubbly, show them all your design ideas and paint swatches until they can’t tell one from the other. The odds of something falling apart and the house not closing after the conditions are met is very slim.
The Home Buying Process
Get Pre-Approved for Mortgage Financing
Before you even begin to look at homes, you should get pre-approved. There is no point in getting your hopes up and looking at homes only to find out later that you do not qualify for that amount or that there is something holding you back from getting approved. A pre-approval will not only tell you the maximum house price you qualify for, but it will also allow you to have a realistic idea of how much your monthly payments will be.
Start Searching for Homes with a Realtor
A good realtor acts in your best interests. They are free for the buyer to use, and they will not only negotiate to get you the best price but will also provide valuable guidance and reassurance throughout the process. As a new buyer, it is very important that you have someone who can guide you. It is not recommended to use the same realtor who is selling the house you are looking to buy. They have an obligation to look out for the seller’s best interest first, and not necessarily yours. However, the exception is new construction homes, as the price tends to be firm with the builder, so using the listing agent in that scenario can be acceptable.
Make an Offer
Once the offer is made, you will need to wait until it is accepted. This usually takes about 48 hours. After the offer is accepted, you will have an accepted purchase and sale agreement with the sellers of the home. Your offer has a couple of deadlines, but we will explain the two main ones here that are related to mortgage financing. The first date is the conditions date, which is typically around seven business days from the time the offer is made. The second date is the closing date. The conditions date is the time you have to get all of your financing approved and your inspections completed. When this date arrives, one of three things will happen. You will either:
- Waive the conditions, which means the deal goes firm and you have bought the home;
- Terminate the agreement because you were unable to meet the conditions or the house is not up to your standards; or
- Request an extension for more time if something unexpected has come up or there have been delays in the process.
After the deal goes firm, you are in a binding contract with the seller to purchase the home on the closing date.
Final Steps Before Closing
Get Approved for the Mortgage
One of these conditions is the condition of financing. When an offer is made, you will need to have your realtor send it to your mortgage broker right away. Check in with your broker to ensure they have received it. The broker will send this offer in for approval. Once the mortgage is approved, a commitment will be issued. From the time the broker submits the offer to the time a commitment is received typically takes 48 hours. A commitment is essentially a conditional approval. It outlines all of the terms and conditions from the lender and states the documents they require to approve the file. The standard documents they will ask for will be in relation to income and down payment, but additional documents may be required for each individual circumstance. These documents are outlined in subsequent chapters for specific situations. You will need to bring these documents to your broker and sign the commitment. After that, your financing can be approved!
You Wait
This is the hard part. You’ve done your part, everything is approved, and the condition period has passed. Now, you essentially play the waiting game. Sometimes, this is non-existent, and sometimes it’s so long you forget that you just purchased a house to begin with. About a week before the closing date arrives, your lawyer will meet with you to sign the final paperwork and obtain a bank draft for the necessary funds. At this point, the best advice I can give you is to ensure that you meet with your lawyer at least two days before closing, especially if your closing date is a Friday! I have witnessed firsthand scenarios where a client goes in to sign on the morning of closing, only to forget a crucial item that has been requested. And when it’s Friday, you can be certain that nothing is going to be happening until Monday. This creates a domino effect when the seller of the home you are purchasing has their own offer on another home that is supposed to close that day. You can see how your transaction can impact others who are relying on this sale.
The House Closes
You do your final walkthrough and the house is finally yours. Congratulations—you’re officially a homeowner!
A Word on Home Inspections
Unless you are buying a new construction house or a condo, practically every property is going to have something wrong with it. Whether it’s asbestos in that home built in the 1930s or roof shingles that have been ripped off in the last storm. A home inspector’s job is to find all of the defects in the home. They are only there to present the facts, so ultimately, it’s up to you to decide what the correct course of action is.
Conclusion
Buying a home in Nova Scotia can be an emotional and complex process, but with the right preparation and guidance, it can also be a rewarding experience. Make sure to get pre-approved, work with a reliable realtor, and understand the steps involved in making an offer and finalizing your purchase. If you’re ready to take the plunge into homeownership, reach out to Alex Lavender, your trusted mortgage broker, for expert advice and assistance. Secure your dream home with confidence and enjoy the journey of becoming a homeowner.