If you’re dipping your toe into the real estate market for the first time the journey can seem overwhelming and complicated. There are downpayments and mortgage rates, closing costs, home inspections and the list goes on and on. One way to help? Familiarize yourself with the steps before you start and do your research. In this article, you’ll learn about the ten key steps to navigating the homebuying process.

1. Start your research

Start your research, and start it early. Begin by following local newspapers, blogs and magazines with real estate sections in your city. Follow realtors on Instagram and listen to real estate podcasts. Keep an eye on how properties are moving in the market; how long are they staying on the market, what is the asking price vs. selling price etc. The key here is to start to get a feel for the trends in specific areas. Your realtor will have great insights as well.

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2. Build a budget

Take a deep dive into your finances; what can you realistically afford? What are your current spending and saving habits? Take note of what you have available for a down payment as this will impact the mortgage you will be approved for, and ultimately, the price of the home you are able to buy. Guidelines state that your gross debt service (GDS) should be no more than 32% of your income. The other ceiling is the total debt service ratio (TDS), which cannot exceed 40% of your gross household income.

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3. Know your credit score

Your credit score will impact what kind of mortgage rate you can qualify for. Stay on top of your credit score and understand how credit really works. You may find after doing your research, building a budget and looking at your credit score that right now isn’t the right time for you to move forward with the homebuying process. You can think about options like Key, which allow you to build home equity sooner without the need to qualify for a mortgage.

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4. Look at mortgage options and get pre-approved

If you decide you’re ready to go the traditional route, it’s time to start shopping around for mortgage options--there are so many different types of mortgages from fixed to variable interest rates and closed or open mortgages. Do your research, talk to a mortgage broker, and get pre-approved before you start house hunting. Though, it’s important to keep in mind that mortgage pre-approval doesn’t mean a guarantee.

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5. Find the right realtor

A realtor can help ease the homebuying process; plus as the purchaser, they come at no cost to you! These licensed professionals are important partners when you’re buying a home and come with a wealth of knowledge about homes, neighbourhoods, negotiations and pretty much every step of the home buying process. Look online or ask your friends and family for realtor recommendations.

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6. Start house hunting

This is the fun part! Start touring homes in your price range, keep notes, take photos and pay attention to all of the little details. Take as much time as you need to find the right home, and remember, you’ll likely have to be flexible about your first home requirements.

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7. Make an offer

You’ve found the place, now your agent helps you prepare a competitive offer and present it to the seller. The listing price is only the starting point; are there any contingencies to your offer? The seller will either come back with a yes, no or a counteroffer. Once you and the seller have reached an agreement, the house goes into escrow, this allows for you to complete all of the remaining steps in the home buying process--we’re not over the finish line yet!

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8. Get a home inspection

Typically, purchase offers are contingent on a home inspection. This contingency protects you and gives you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant issues. This process has a third party assess the house from top to bottom to determine if there are any problems with it that may make you think twice about moving forward. Think signs of structural damage, an old furnace or a roof that needs replacing. Plus, lenders may ask for a home inspection report when you apply for a mortgage.

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9. Get a home appraisal

Even if you had pre-approval for a mortgage, the lender will still need to conduct a home appraisal. This is an independent estimate of the value of the property you are buying, and is meant to protect you from a bad deal. Here’s more information about the appraisal process.

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10. Close the sale

Now comes the paperwork! This is when you’ll finalize the deal including the final approval of your mortgage, meetings with your lawyer to finalize details like insurance and title. It typically takes a couple of days for your loan to be funded after you’ve completed the paperwork with your lender. Starting to understand the steps of the homebuying process is just the first step (this article will help you with step one, research). It is a big decision (probably the biggest financial transaction in your life thus far), so make sure that you are looking at all of the different options and innovative models on the market. Take it one step at a time and make sure you have the right professionals in place to support you along the way.

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