Realtor Dennis Faulkner walks through the eight steps of buying a home.

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You have viewed several homes and found the one you want. You feel excitement and a bit of apprehension as you prepare to write the offer on your new home.

Step 1: Know what you can afford.

Ideally, you have already done a lot of preparation before you started looking at homes. That preparation will have included contacting your mortgage broker or bank to determine how much money you are qualified to borrow.

In addition, you have calculated the total cost of homeownership, including taxes, insurance, utilities, condo fees, legal fees, mortgage registration and maintenance and repairs. You have determined the total monthly cost of your purchase and are comfortable with that amount for your housing costs.

You have consulted with your realtor to ensure you are aware of your total closing costs for the purchase of your home and, ideally, have an emergency fund for unforeseen expenses such as mechanical or appliance repairs and replacements.

Step 2: What is the home worth?

The asking price is not a reliable determination of value. The home could be overpriced, as the seller may be reaching, testing the market or have an emotional attachment to it.

This is where you rely on your trusted realtor to evaluate the market value of the home that you would like to purchase.

Your realtor will review recent sales of similar properties, as well as active listings, to determine the home’s market value in its current condition.

With your realtor’s guidance, you can then decide on an appropriate starting price for your offer. Many factors will influence your initial offer price, including market conditions, days on the market, the home’s condition, and other potential candidates that you have viewed.

Your offer will likely involve some back-and-forth negotiation with the seller.

Step 3: Decide which conditions to include.

The 3 most common conditions are financing, inspection and, if it’s a condo, a review of condominium documents.

In Alberta, the conditions are not a simple pass or fail; they are subjective. They are worded such that you must be satisfied with the financing, inspection and condo document review.

You may qualify for financing; however, you may not be satisfied with the terms of the financing and could therefore walk away from the deal and recover your initial deposit.

If you are selling a home to purchase another, you might also include a contingency for the sale of your existing home.

In some cases, albeit somewhat rare, a seller could also include a condition requiring the finding and securing of a deal on their next home.

Step 4: Terms of the sale.

Terms will include the obvious, such as price, possession date, which appliances are included, whether you get a real property report or title insurance and the deposit amount. A real property report or title insurance is often required by your lender in order to secure financing.

The terms will also outline what else is included in the sale, such as window coverings, and whether any repairs must be completed before possession.

The terms will be buyer- and home-specific and can include a variety of items. You, in consultation with your realtor, will decide on what terms you may want to include or leave out. Generally speaking, a buyer might get a better price on a home if they don’t require the seller to jump through several hoops to complete the sale.

If there are multiple offers, it may be in your best interest to limit the terms of the sale to make your offer more attractive.

Step 5: Submit the offer.

Your offer will include a time frame outlining how long the seller has to finalize the offer. It is typical in most negotiations for there to be some back and forth negotiation on the price and terms.

Market conditions will play a role in how the negotiations go and which side they may favour. The relative motivations and urgency of you and the seller will also factor into the outcome of the negotiation process.

Step 6: Offer acceptance.

Once the offer is accepted, you will have a time window agreed upon by both parties to satisfy all the conditions of sale.

Most buyers will wait until financing is approved before conducting an inspection, which can cost $500 or more. There is no point in paying for an inspection if you can’t secure financing.

I recommend obtaining an insurance quote before removing your conditions — not after. Knowing your coverage options and their limitations before finalizing the sale protects you from an unwelcome surprise at a point when it may be too late to walk away.

You may also decide to hire a professional to review the condo documents when purchasing a condo. Keep in mind this will not only cost around $500.00 but also take time to complete.

Step 7: Finalizing the sale.

Once you are satisfied with your conditions, you can waive them in writing, at which point the home is considered sold and your deposit is no longer refundable. Your deposit will go towards your down payment and purchase price.

Step 8: Arrange for home insurance, utility hookup, address change and movers.

Around one week prior to your possession date, your lawyer will meet with you and ask you to bring in the balance of the monies (down payment, closing costs) and sign the final documents for the title transfer.

Possession day is one of the most exciting moments in the home buying process. Once the seller’s lawyer has confirmed receipt of the purchase funds, your realtor will reach out and arrange to meet you at your new home — keys in hand — to officially welcome you through the door.

Dennis Faulkner, B.A. Economics, works as a realtor at eXp Realty. He can be contacted for a free market evaluation and to answer your real estate questions at dennis.faulkner@icloud.com