First-Time Buyer's Guide: From Pre-Approval to Closing

Buying your first home is one of the most exciting—and overwhelming—experiences you'll have. This comprehensive guide breaks down the entire process into manageable steps, so you know exactly what to expect.

Step 1: Get Pre-Approved for a Mortgage (Before House Hunting!)

This is the most important first step, yet many first-time buyers skip it. Getting pre-approved tells you:

• How much you can afford: Your maximum purchase price
• Your interest rate: Locked in for 90-120 days
• Your monthly payment: So you can budget accordingly
• Gives you negotiating power: Sellers take you seriously

What you'll need: Employment letter, recent pay stubs, tax returns (2 years), credit check authorization, and down payment proof.

Timeline: 1-2 business days

Step 2: Determine Your Down Payment

In Canada, your down payment requirement depends on the purchase price:

• $500,000 or less: Minimum 5% down
• $500,000 to $999,999: 5% on first $500K, 10% on remainder
• $1 million or more: 20% down required

Important: If you put down less than 20%, you'll need mortgage default insurance (CMHC, Sagen, or Canada Guaranty), which protects the lender if you default.

Step 3: Find a Real Estate Agent

A good agent is invaluable for first-time buyers. They'll:

• Help you understand the local market
• Find properties that fit your needs and budget
• Negotiate on your behalf
• Guide you through paperwork and deadlines
• Recommend other professionals (lawyers, inspectors)

Best part: As a buyer, you typically don't pay your agent—the seller does!

Step 4: Start House Hunting

Now the fun begins! Armed with your pre-approval, you can confidently shop for homes within your budget.

Must-haves vs. nice-to-haves: Make a list of non-negotiables (location, bedrooms, school district) versus features you'd like but can live without (finished basement, pool).

Timeline: This varies widely—some buyers find their home in weeks, others take months.

Step 5: Make an Offer

Found the perfect home? Your agent will help you submit a competitive offer that includes:

• Purchase price: Based on comparable sales and market conditions
• Deposit: Typically 5% of purchase price
• Conditions: Financing, home inspection, review of status certificate (condos)
• Closing date: Usually 60-90 days out

Pro tip: In competitive markets, be prepared to move quickly and potentially compete with other buyers.

Step 6: Conditional Period (Your Safety Net)

Once your offer is accepted, you typically have 5-10 days to satisfy conditions:

Home Inspection ($400-$600)

NEVER skip this step! A professional inspector will identify:

• Structural issues
• Roof condition and estimated lifespan
• Electrical and plumbing problems
• HVAC system condition
• Foundation concerns

If major issues are found, you can negotiate repairs, a price reduction, or walk away.

Financing Condition

Your lender will order an appraisal to confirm the home's value supports your mortgage. They'll also verify your employment and review any changes to your financial situation.

Status Certificate Review (Condos Only)

Your lawyer reviews the condo corporation's financial health, rules, and any pending litigation or special assessments.

Step 7: Finalize Your Mortgage

Once conditions are satisfied, you'll:

• Sign final mortgage documents
• Lock in your interest rate
• Purchase mortgage default insurance (if applicable)
• Arrange for home insurance (required before closing)

Step 8: Hire a Real Estate Lawyer

Your lawyer handles all legal aspects of the purchase:

• Conducts title search
• Reviews all documents
• Calculates land transfer tax and adjustments
• Registers the property in your name
• Handles money transfers on closing day

Cost: $1,500-$2,500 including disbursements

Step 9: Final Walk-Through

24-48 hours before closing, do a final walk-through to ensure:

• Agreed-upon repairs were completed
• All fixtures and appliances included in the sale are present
• The property is in the same condition as when you made your offer
• Utilities are working

Step 10: Closing Day!

On closing day:

• Your lawyer registers the deed and mortgage
• Funds are transferred to the seller
• You receive the keys (usually around 6 PM)
• Utilities are transferred to your name

Congratulations—you're a homeowner!

Closing Costs to Budget For

Beyond your down payment, expect to pay 1.5-4% of the purchase price in closing costs:

• Land transfer tax: 0.5-2% of purchase price (varies by province/municipality)
• Legal fees: $1,500-$2,500
• Home inspection: $400-$600
• Appraisal: $300-$500
• Title insurance: $200-$400
• Home insurance (first year): $1,000-$2,000
• Property tax adjustments: Varies
• Moving costs: $500-$2,000+