Steps to Buying a House

There's much more to buying a house than people think at first. If you are a first-time home buyer - you might be lost in the sea of information.

We believe that's everything you're looking for so we wrote a 10-step article that will help you purchase a new home, deal with financing, handle the legal stuff before and after the purchase of your new home.

This guide will help you and even guide you in the process of a home purchase so keep on reading to find out what's waiting for you! Buying a home can cause anxiety, but working with a great real estate agent that can guide you through the process makes the situation easier, be sure to have fun along the process – it is an exciting process to look forward to the final outcome of moving into a new place.

Steps to Buying a House

Decide on Your Budget

Even before choosing your dream house, the first step is to decide on your budget. Your budget will also be determined by how much of a deposit you can put together. If possible, put aside another 15% in your budgets for contingency and emergencies, and unexpected costs when purchasing a new home. Maybe you are looking for new furniture, or a renovation with new appliances, new paint, new carpet. Factor in condo fees or Home ownership association fees (if applicable). If you are purchasing a brand-new home, you may need to purchase window blinds, grass, fence. A budget is important to know what you are comfortable spending. Money set aside will help so that you are not overstretching yourself.

Figure Out Your Finances

When you decide on your budget, the first thing you will want to do is work out your finances. Financial advisors would be a good place to start if you are currently working with a professional, but it is not necessary when purchasing a home and you do not need to go out of your way to find someone. What we are talking about in this section is to make sure that while you go out to purchase a home, banks and mortgage brokers will need to look into your financial history to determine if you can afford and qualify for your home that you want to purchase. The worst situation is to fall in love with a home that you cannot afford.

Two types of mortgages: Conventional Mortgage and High Ratio Mortgage

Essentially, a conventional mortgage, you are putting 20% down payment or more. A high ratio mortgage means that you are putting less than 20%. All high ratio mortgages must be insured by the Canada Mortgage and Housing Corporation (CMHC), Genworth Financial Canada or Canada Guarantee.

You can put a down payment as low as 5% down for a traditional home purchase, but be mindful the Government has put in place a program called CMHC which is mortgage loan insurance for the lender. To learn more about Mortgage Loan Insurance, please visit this website:

General rule of thumb: Minimum down payment

To get mortgage loan insurance, you’ll need a minimum down payment. The amount depends on the home’s purchase price:

If the home costs $500,000 or less, you’ll need a minimum down payment of 5%.

If the home costs more than $500,000, you’ll need a minimum of 5% down on the first $500,000 and 10% on the remainder.

If the home costs $1,000,000 or more, mortgage loan insurance is not available.

Opinion: We recommend to our clients to put down a minimum of 20% down so that you avoid paying the CMHC Mortgage Loan Insurance. The fees for the mortgage loan insurance can be an extra $5,000-$10,000 on your bottom line and it does not go into paying down your house. Here is a link to the Mortgage Loan Calculator:

When purchasing a home, you can put in a conditional offer that includes a finance condition. A finance condition means that you have a period of time to ensure that you are qualifying for a mortgage. During the period of an accepted conditional offer you have time (typically it’s about 10 business days) to “waive” the condition. Essentially it means that the seller is giving you a period of time to ensure that you are going to buy their house.

A mortgage broker can help to assist you to figure out your finances prior to your home search. They will look at your credit score, determine how much you need for the down payment, and they can also provide you with a pre-approval to help you feel comfort when shopping for your new home.

A reminder, a pre-approval is just a guideline and the formal approval will happen after an offer is put in place.

When you are ready to put in an offer, reminder that you will need to put a deposit (about 2 days after an accepted offer) and a down payment (due at the lawyer’s office meeting). Deposits have a general rule of thumb of $5,000 for a condo/townhouse, and $10,000 typically for a purchase price of a home under $500,000.

Your Home Criteria

Several factors to choosing the right home.

Location: Once you get your finances in check, the fun time of finding your new home starts. To find your future home, you should first think of the community that you would like to live in.

This is a crucial decision as it will be determined by your future goals but also can lead to a thorough search of the home once you decide on the location.

Close to schools, shopping, work, religious spaces, quiet streets, green space or close to parks, hospitals and airports can be factors to choose a good location. Commute and transportation can be important in choosing your future location.

Size: What are you looking for? Apartment/Condo, Townhouse, Starter Home, Duplex, Detached Home or Luxury Home? Is this for you and your family? Are you downsizing? Size of home is dependent on your personal needs. A real estate agent is your guide, but they are not the one that will be living in the home.

Price: Knowing your budget is important, making sure that you stay within your budget will help you be successful in finding your next home. Finding the best deal may not always be your first criteria but it is important if it checks off the other factors on the list.

Property Viewings

When you know the type of house you're looking for - decide on a couple of properties you feel serious about. A real estate agent can help set up searches with your criteria. Having narrowed down your search, this will help to focus your search.

Searches are booked typically a few hours in advanced at a minimum, with a hot real estate market, showings might be available to see immediately (especially if the homes are vacant). Tenanted properties typically require a minimum of 24 hours’ notice, but sometimes tenants can be accommodating to allow for viewings in a shorter time frame.

With COVID-19 changing the dynamic of showings in homes. It is important to follow the guidelines to be safe while on showings. Masks are mandatory at this time; it may change if the restrictions relax (2020-2021 in Alberta). This is a big decision to view properties in person. In certain circumstances you may not be able to view the property, but a real estate agent can provide you with additional information to make an informed decision. Viewings are currently limited to two people with the real estate agent. Try to leave your kids and pets at home. In-laws and other important people should not be attending the meetings without permission from the seller.

Choose One Specific Property and Make an Offer

Choosing a specific property won't be easy and it will take you many visits to many different properties. However, it’s best to do your homework and trust your inner gut feeling. Think of finding a home objectively, it can be a highly emotional process and having yourself with a clear goal in mind will help to weed out the homes that may not fit.

If you're happy with the property and you feel like it's "the one" - it's the right time to make an offer.

The overview of the offer is where you set the terms for possession, conditions, terms, and price. Once an offer is put in place, you will need to put a down payment on the property. A good rule of thumb for a deposit is anywhere between 2-5% of the total purchase price.

Mortgage and Finance Conditions

When you make an offer and it gets accepted, it's time to arrange a mortgage.

By now, you should already have finances in place and it's the right time to ask for a formal mortgage offer from the lender before you can exchange contracts. The banks or mortgage broker will ask for a lot of information like your finances and

At this time, most first-time home buyers will want to put conditions in the offer to protect their best interest. The Finance condition gives the buyer extra protection to make sure that the lender will give the money for the purchase of a home. The Home Inspection condition allows for a home inspector to look around at the property to note any defects of the home and make sure that the future buyer understands what they are getting into.

Hire a Lawyer

When you have agreed on an offer for your new home - it's the right time to hire a real estate lawyer. A good solicitor will help you deal with the legal work to transfer the property ownership to you. Typically, you won’t need to see the lawyer until about 2 weeks before the home’s possession date. The lawyer does several things to protect you and makes sure that the home is properly passed off to the new home owners. They discharge any liens or mortgages on the deed (title) of the home. They process any new mortgages onto the home. They double check the Real Property Report and ensures what you are getting is in fact what you are purchasing. Title Insurance may be something to add to your home purchase if there is something regarding the title that may take extra time to resolve. The lawyer’s office is where you would pay the final deposit. The lawyer’s appointment is often where any final balances are taken care of; things like a bank draft, such as taxes, and condo fees are the biggest places of where a statement of adjustment may take place.

Complete the Sale and Take Possession of Your New Home

Once the lawyer’s appointment has taken place, you can rest easier as this is nearly the final steps to home ownership. On the day of possession, the real estate agent or lawyer will let you know when the keys are released. Make sure prior to this stage, home insurance, utilities are set up, mail forwarding is a good thing for the first few months as you transfer things over.

Try not to set up the moving trucks in on the first day in case of any possible delays.


Picking only one home from hundreds or thousands of homes available on the market is going to be a pretty hard task. Having a good idea for what you are looking for will narrow down the search drastically.

If you are not well prepared, you'll have to deal with finances and mortgage in a hurry which might even put off some sellers (meaning you might end up losing the deal).

These steps are a general guide to what you will have to go through. If you follow each step - there won't be many surprises and the purchase of your new house will be a smooth process.

What part of the process scares you the most?

We'd love to hear back from you so feel free to leave a comment below or ask any questions. Sharing the post will help others get prepared and we'd appreciate it!

Posted by AMANDA KU on


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