How to Search for Real Estate

Searching for real estate is about more than simply finding a property you think you’ll be happy in. That’s the easy part.

A complete and satisfying real estate search — one that ends with you moving into your new home — is a little more involved. It requires time, effort and some careful thought.

But by breaking your real estate search into steps, you can demystify the home buying process and get yourself ready for the challenge ahead.

Step 1: Figure out what you can afford

There’s no point getting your heart set on a property you can’t afford, right?

The quickest way to get a general idea of your budget is to play around with a mortgage calculator to estimate your monthly mortgage payment.

Another way to determine how much house you can afford is to talk to a mortgage specialist and get pre-approved for a home loan.

A mortgage pre-approval is an estimate of how much a lender will provide to fund your home purchase. It may not tell you the exact amount you can borrow, but it will give you an idea of the price range you’ll be working with.

Step 2: Find a real estate agent

Technically, you don’t need to engage the services of a realtor, real estate agent or broker when you buy a home. You can do it yourself and just get a real estate lawyer to look over the relevant documents when the time comes.

But real estate agents can save you a lot of time when it comes to finding properties that fit your needs. Experienced agents know their local markets, too, and can tell you which neighborhoods may be more likely to see price increases. They can also help you negotiate if you find yourself competing with other buyers.

Finding the right real estate agent can be difficult, especially if you’re in a major city that has thousands to choose from. Here are a couple of ways to narrow the search:

Step 3: Make a list of homes that interest you

Now it’s time to have a little fun and start actively looking at properties in your budget.

If you’ve retained the services of a real estate agent, they’ll be keeping an eye out for homes that fit your spending limit and tick the boxes on your dream home checklist. But you can get in on the fun, too.

Of all the online home searching resources to choose from, Realtor.ca will likely give you access to the most properties. Operated by the Canadian Real Estate Association, Realtor.ca is where agents across the country post their listings.

Step 4: Tour potential properties

Buying a home that you plan to inhabit generally requires seeing it in person and imagining what life there might be like. Is the kitchen big enough for the kind of cooking you do? Are the “needs a little TLC” blemishes something you can live with until you’re ready to fix them up? Is the basement big enough for your girlfriend’s drum kit?

Viewings also create an opportunity to ask questions you might not have thought of while sighing wistfully at the photos in a home’s listing. Ask your buyer’s agent every question that comes to mind, no matter how basic it might be. If they don’t know the answer, they can ask the seller or the listing agent.

If you’re buying a newly built or pre-construction property, this is a good time to take a long, hard look at what’s covered by the builder’s new home warranty.

Step 5: Get a home inspection

Whenever Canada’s housing market starts boiling over, anxious buyers can feel pressured to make sure a purchase goes through as quickly as possible. One step that frequently gets passed over is getting a professional home inspection.

But make no mistake, a home inspection is a critically important part of your overall real estate search. A home inspection involves a trained, third-party professional looking at a home’s various components — the wiring, the foundation, the roof, the plumbing — to make sure everything is working properly, and in accordance with safety standards and local bylaws.

Buy a home without an inspection and you don’t really know what could be hiding behind the drywall.

Step 6: Make an offer

Making an offer on a home is a big deal, both emotionally and financially. Not only are you placing yourself in a scenario that can lead to joy or disappointment, but if your offer is accepted, you’re legally bound to buy the house.

Offers can be complex. In addition to establishing a sales price, they also determine the closing date and any conditions the buyers and sellers agree upon.

Your offer should be based on your budget and what your realtor thinks the home in question is worth in the current market. It could be priced too high, priced appropriately or well below market value in the hope that it sparks a bidding war.

Step 7: Get a real estate lawyer

Once an offer has been accepted, you’ll need to find a real estate lawyer to handle a few important behind-the-scenes duties for you: holding your deposit in escrow and conducting a title search.

The deposit, which is typically non-refundable, shows the sellers that you’re serious about purchasing their home. The title search ensures the home is being sold by its rightful owner. Your lawyer can also help you secure title insurance, which protects against undisclosed property title issues, like unpaid property taxes.

Your real estate lawyer will also play a role later on in the home buying process, so it’s important to find an experienced professional you can trust. Your real estate agent or mortgage advisor should be able to recommend a few for you to choose from.

Step 8: Get a mortgage

You’re getting a little closer to bringing your real estate search to a close. It’s time to choose a mortgage lender and get serious about financing this major purchase.

First, you’ll have to officially apply for a mortgage. It doesn’t have to be with the lender that provided your pre-approval. If, during the last few steps, you found a lender with lower rates or fewer fees, you can apply with them instead.

Then you'll need to get a home appraisal, which determines the value of the home. Lenders want to be sure you’re not overpaying for a property. If you do, and you have to sell it suddenly, the amount you get in the resale may not be enough to cover your outstanding mortgage amount.

The final stage of this step is to sign your mortgage. You’ll read through the mortgage contract with your mortgage advisor to ensure you’re on board with all the details and the payment schedule you’ll soon be on. At this stage, you may even be able to do a little last-minute negotiating to see if you can pay a slightly lower interest rate. It never hurts to ask.

Step 9: Close on the property

On closing day, the day you’ve agreed to take possession of your new home, you’ll once again require the services of your real estate lawyer.

Once the lawyer receives the mortgage funds from your lender, as well as your down payment and any relevant closing costs, they’ll pay the seller and register the home in your name. Then the deed and the keys will be yours.

Step 10: Enjoy your new home

Life as a homeowner means new expenses and a few challenges, but that doesn’t take anything away from the fact that buying a house in Canada is a huge accomplishment. That’s something you’ll be reminded of every time you open the door and step inside.