BUYING A HOME IS NOT LIKE BUYING A CHOCOLATE BAR

For a person that has been seriously looking to buy a home since April of 2008, I’ve discovered how little I actually know about the “buying” part. I’ve gotten really good at looking at places, reading at feature sheets, and asking the right questions. The stuff you do when you and seller agree, well I wished I had made a dress rehearsal some time before this first.

I didn’t realize all the little things you have to do and all the paperwork you have to fill out. Here’s a protip on how to cut down on all that stuff: have a massive amount of money sitting in a single (non-RRSP) account. You can probably guess why it’s useful to have a massive amount of money. Having it in a single account though, it saves so much hassle. Your mortgage broker and/or lenders then only have to look in one place to see your assets. If you’re drawing from six different accounts, that’s six different accounts you have to get statements for, to prove you’ve got the money. Also, if those accounts happen to be RRSP accounts or stock accounts, you’ve got additional work to get at that money compared to a simple withdrawal.

I would also suggest asking your realtor to pretend that an agreement has been made upon. Ask him/her what steps happen next. Figure out how fast you can liquidate your assets and get at your money for all your sources. If you need to transfer money from one account to another, ask how long that will take. If you’re selling stock, ask your broker how fast that can be done and what fees are involved. With RRSPs, that might be the most hassle if you’re going to use them with the Home Buyer’s Plan. It usually takes a couple business days to cash out RRSPs and depending on what type they are, you’ll also have to pay fees on top of that.

The ability to close the deal in a relatively quick fashion can sometimes be the difference between getting the place or not. In this market, where some sellers can’t afford to even pay an extra two weeks of their mortgage, coming in at a lower price but offering a quick completion can allow buyers to get a bit of an advantage.

Last but certainly not least, ask your lender or mortgage broker exactly what documents are required to prove your worth. I didn’t have a great idea of what was required, so it’s taken me a few extra days to gather up all the paperwork. Since I’m working against a date where I need all this figured out, gathering and faxing documents every day has left me a bit stressed. Had all the papers been just sitting in a folder from day one, that would have a much more smoother experience.

Don’t be like me, be prepared!

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