Real Estate Talk:
The purchase process in 2023

Searching for a property with a broker and the step-by-step purchase process

By Joseph Marovitch

Updated August 29, 2023

If you are buying a property for the first time, it can be an overwhelming endeavor. There are questions such as, Where do I start? Where do I look? Should I use a broker or do this alone? How do I arrange financing? What if the house has problems? Am I paying a fair price? Will I get my money back when I sell, and the list goes on and on.

To provide a better understanding of the real estate process and all that is entailed, we will provide a series of articles that include topics such as the purchase process, the selling process, the pre-approval process, inspection, financing, cash or mortgage, marketing process, income property, buying with or without warranty, purchasing a second home and other issues. You can also contact me anytime for questions about topics presented or any other real estate issues.

Buying a property for the first time can be an overwhelming endeavour. There are questions such as where do I start? Where do I look? Should I use a broker or do this alone?… And the list goes on and on.

In this article, the first topic addressed is searching for a property with a broker. You can search online or through ads in the local newspapers, however, this is a time-consuming process and much effort can be wasted. An experienced broker does not cost you and can narrow your search to specific criteria such as location, number of bedrooms and bathrooms, style, and price range.

The first step is to meet several referred brokers and find chemistry, integrity, and trust. In a meeting, you will determine if the broker appears informed, professional, and trustworthy.

Questions to ask include:

• How long have you been a broker?
• Have you purchased many homes?
• How do we finance?
• Can you recommend a mortgage broker?
• Can you recommend an inspector?
• Can you recommend a notary?

These are not complicated questions but you want to detect knowledge, patience, integrity, professionalism, the ability to negotiate, and commitment to you… and not just a sale. If your gut feeling is positive, then use the broker. If not, go to the next broker.

The wrong broker to buy or sell a property can lead to legal issues and plenty of frustration. The broker should ask you several questions as well to determine and create a foundation of trust. After all, you will be working together intensely for a time.

‘The wrong broker to buy or sell a property can lead to legal issues and plenty of frustration.’

The following is the purchase process step by step.

Meet the broker at your home or in their office to determine:

• Type of property – residential, detached, semi-detached, condo
• Number of bedrooms
• Number of bathrooms
• Parking or garage or both
• Location
• Price range
• Style – old, new, concrete, wood, brick, stone
• Financing – mortgage or cash? You and/or your broker should arrange a pre-approval or prepare a proof of cash.

The process

1. The broker searches and reviews listings based on criteria provided by the buyer.
2. The broker emails listing to the buyer to preview.
3. If the buyer finds any listings to be of interest, the buyer informs the broker.
4. The broker arranges visits.
5. The broker checks for liens, mortgages, registered rights, etc.
6. The broker compares property to other comparable sold property.
7. Using all the previous information, the broker determines the best price possible, with the buyer.
8. The broker prepares promise to purchase with price and conditions.
9. The broker prepares counteroffer if required.

Once an offer is accepted

1. The broker ensures all required documents are provided to the designated notary.
2. The broker ensures financing is arranged with bank evaluations.
3. The broker ensures inspection deadlines.
4. The broker handles miscellaneous problems: certificates, loans, servitudes, non-conformities, septic, well, weeping field, etc.
5. The broker arranges the signing

Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, click here.

Next article: The financing process: Pre-approval or proof of cash

State of the market

Bank Of Canada Rate today: 5%
Canada Inflation today: 3.3%

Across Canada, many homeowners who purchased during the pandemic at very low interest rates have their mortgages coming up for renewal. Buyers who acquired rates of 1.2% during the pandemic will be hit with rates of 7% if they take a 5-year mortgage. The rate will be even higher if the term is shorter.

As well, as the rates increase, these buyers have had increasing carrying costs over the past four years. If the buyer sought to take advantage of pandemic rates and had to borrow the down payment, it would be very difficult to maintain their property. The forecast is for a slowdown in the economy and another possible interest rate hike. What is there to do?

‘If the buyer sought to take advantage of pandemic rates and had to borrow the down payment, it would be very difficult to maintain their property.’

If a buyer borrowed from family or a credit card for a down payment and their financial situation has not improved, it would be wise to sell and cut further losses. If their financial situation has improved and they can afford to maintain the property, then hold until the economy improves and interest rates decrease. If a buyer has extra cash available, now is a good time to purchase property. An all-cash purchase may provide a discounted price.

There is demand for homes, and there are sellers who want to sell. Therefore, a seller may be inclined to sell if they know the buyer is solid and not dependent on a loan and interest rates. A buyer may also acquire a short-term interest rate of 1 or 2 years, but the interest rate will be exceedingly high. A variable rate is also an option, but the rate will be high, and there is a risk that rates increase.

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Feature image: Andrew Burlone

Other articles by Joseph Marovitch