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How Do I Find and Get the Right House?

 

When you start to look for your next home, consider these factors to make a smart decision:

Examine Your Needs and Lifestyle Choices

Before deciding which house to buy, think about your lifestyle, your current and anticipated housing needs, and your budget. You'll soon discover finding the right house involves striking a balance between your "must-haves" and your "nice-to-haves". Here are some things to consider:

Look At How You Live

To start, take a look at your lifestyle. If you love to cook, you'll want a well-equipped kitchen. If you're into gardening, you'll want a yard. If you're planning your office at home, you may want a room for a separate library or work space. If you have several cars, you may require a larger garage or parking spaces.

Think About What You Might Need in the Future

As you think about your housing needs, it's important to consider how long you may live in your home. If you're newly married, you might not be concerned with a school district right now. But you could be in a few years. If you have aging parents, you may want to look at homes that offer living arrangements for them as well as you.

Identify Neighborhoods You Like

You need to think about a home's location just as carefully as you do about a house's features. In addition to considering the distance to work, you need to evaluate the availability of shopping, police and fire protection, medical facilities, school and day-care, traffic and parking, trash and garbage collection, recreational facilities, even places of worship.

Driving or walking around neighborhoods, looking at street maps of various neighborhoods, and talking with people you know who live in the neighborhood will help you better understand the pluses and minuses of the places you're considering. A real estate agent can further help you identify neighborhoods where homes are more likely to appreciate in value.

Consider The Cost Of Living

Where you choose to live does make a difference from a cost of living standpoint. Not only can property taxes vary significantly from area to area, but so can the costs of commuting and home association fees.

Decide On The Type Of Home You Want

Do you want a condominium, a town house, or a detached single-family home? Do you want brick, stone, stucco, wood, vinyl siding, or something else? Do you prefer a new home or an older one?

If you have the time and money to invest in fixing up a home, you might want to buy an older home that needs some work. A construction renovation mortgage can help with the expenses. Otherwise, you may opt to buy an older home that has the renovations already complete, or a new one that's completely energy efficient.

Consider A Real Estate Agent

Some people turn to a real estate agent or broker to help find the right home for them. Finding a broker or agent who is familiar with the areas you're interested in, has access to up-to-the-minute listing and is willing to do a lot of the legwork for you in finding homes that fit your criteria can be a big advantage. Be careful about walking into open houses or contacting listing agents directly since those agents legally represent the seller and it is in their best interest to get you to pay as high a price as possible. Always tell sellers' agents that you have your own realtor representing you.

One alternative to the traditional agent is to hire a "buyer's broker", or someone you pay to represent you. Buyer's brokers usually share in the commission, get paid an hourly rate, or earn a set fee if they find a home you wind up purchasing. They can help you negotiate the lowest price and make sure you get full disclosure about any problems the home might have.

For more information or help in finding the right house, visit the National Association of Real Estate Brokers or the National Association of Realtors.

Avoid Expensive Surprises

There are always uncertainties when you're buying a house - and most homebuyers don't have the background and knowledge to know how to make sure that there are no major problems with the property. While some communities today require inspections and some even require that the seller provide a warranty, even if it's not required, it's worth hiring a professional inspector before signing on the bottom line. Here are some things they'll inspect:

  • Structural components, including foundations, floors, walls, columns, ceilings and roofs
  • Exterior conditions, including wall flashings and trim, doors, windows, chimneys, decks, balconies, stoops, steps, porches, eaves, vegetation, grading, drainage, driveways, patios and walkways
  • Plumbing systems, including pipes, drains and traps and the operation of showers, toilets and faucets
  • Electrical systems, including wiring, grounding equipment, amperage and voltage ratings, circuit breakers, lighting fixtures and receptacles
  • Heating systems, including boilers, thermostats, heat pumps, insulation, radiators and automatic safety controls
  • Air-conditioning systems, including central controls and distribution systems such as fans, pumps, ducts and air filters
  • Interiors, including walls, ceilings, floors, cabinets, doors, windows and stairs

Pre-Qualify for a Mortgage

You'll find getting pre-qualified for a mortgage not only gives you added confidence, it defines you as a serious buyer with realtors and sellers and gives you a big advantage over other yet-to-be-qualified buyers whose financing may or may not be approved. Best of all, once you've selected a house, being pre-qualified helps to accelerate the mortgage process.

Apply now for your pre-qualified amount. Just stop by an RBC Bank banking center or call us at 1-800-789-1108. We'll get the process moving.

Negotiate the Price

Once you've found that perfect house, it's time to negotiate the price so you can get the best possible deal. Here are some things to consider:

  • How much can you afford to bid based on your budget and your loan pre-qualification?
  • Is it a buyer or a seller's market? Not only does the economy play a big role but the market can vary from area to area. Even the time of year can make a difference.
  • Compare prices of similar properties. Make sure you're comparing apples to apples, including the neighborhood, when the house was built, its condition, number of rooms and amenities.
  • Review the inspection report and appraisal information and call out possible repairs as reasons to adjustment the sales price.
  • Agree on personal property, including fixtures, appliances, carpeting, draperies, landscape plants and other items, that will be included in the price.

Understand the Sales Contract

Here's what should be included in your sales contract:

  • Sales price
  • Address and legal description of the property
  • Amount of your earnest money deposit, which reserves the house for you while the contract is prepared and executed
  • Amount of down payment
  • Terms of your mortgage, allowing you to withdraw from the sales contract if you can't qualify for a mortgage or if interest rates rise so much that you can no longer afford to buy the home
  • A contingency clause that allow you to back out of the agreement if you can't sell your current home within a certain specified period
  • Terms of assuming the seller's mortgage, if applicable, which may allow you to obtain a lower rate than is currently available in the market
  • Details of owner financing, if applicable, which should include repayment terms, interest rates and down payments (the contract should not impose a prepayment penalty)
  • Closing details, such as when and where the closing will take place
  • Date of occupancy so it's clear when you can move in
  • Type of deed required to be transferred to you from the seller at closing
  • Personal property and fixtures that are included with the house
  • Repairs the seller agrees to make, including necessary inspections - and a contingency clause in the agreement that allows you to withdraw from the contract if the inspection uncovers something that needs to be corrected
  • Explanation of easement rights, which give someone else-such as a utility-the legal right to use your land
  • Amount of the broker's fee, if any, and who will pay it (usually the seller)
  • Account where your earnest money and down payment will be kept, usually in escrow in a special bank account - also, conditions under which you can receive a refund of these funds
  • Proration of home ownership costs, specifying how property taxes, utility bills and rent from tenants will be split during the period between the signing of the contract and when you take possession
  • Provisions about which title insurance company will issue the title insurance policy and who must pay for the title search
  • Warranty against liens, stating that all renovation or repair bills and taxes have been paid
  • Financing arrangements, specifying that you will apply for a mortgage loan