The Buying Process
Finding the perfect home doesn’t happen in one day. There are a number of things you can do to simplify the process, including defining financial parameters, potential neighbourhoods and the desired features in your next home.
Do you need an extra bathroom, a garage, a fenced backyard, or lower utility bills? Do you want a fireplace, a short drive to work, or maybe minimal yard work? Once your list is complete, decide what is most important to your lifestyle.
Then it’s location, location, location.
Location affects your day-to-day living and is one of the most significant influences on value. Your choice of location may be limited somewhat by the price you can afford. Even so, make sure you consider such things as distance to work, schools, shopping and entertainment.
What type of property do you want? A single-family detached home is attractive to many people because it typically provides more living space and land. On the other hand, a condominium may be a more appropriate choice for you, with an emphasis on maintenance-free living.
A REALTOR® can help you analyze all of these buying issues. A REALTOR® working as a buyer’s agent works to find the connection between homes available in the market and the needs and financial capacity of buyers. Talk to and compare the services of REALTORS® to help you navigate through this complicated business transaction. Be comfortable and confident with the REALTOR® you are selecting as your business partner.
As your agent, the REALTOR® owes you the duties of utmost care, integrity, confidentiality and loyalty. Make sure you discuss agency with your REALTOR®. In most provinces, if a REALTOR® is showing you homes, they are automatically deemed to legally be your agent, and owe you all of the associated obligations.
A REALTOR® will use various tools to try and find properties that meet your specifications including the MLS® service. One of the important search tools will be the local MLS® system. By sitting down at a computer the REALTOR® can key in your needs, choice of neighbourhoods and price range and immediately come up with a list of suitable properties available through the MLS® system. You can also view listings posted to the national realtor.ca web site.
When you select a property and decide to visit a house, there are many things to consider.
Does it have all the features you wanted? Is the neighbourhood what you expected? Try to picture your favorite furnishings in a room. Remember all of the technical considerations:
- What type of wiring does the house have?
- What about power outlets? Different appliances use different types.
- What type of heating system does it use?
- What about the roof and foundation?
- What condition are the windows in?
- What about the plumbing?
There are other things to look at as well. If you don’t have time or don’t feel comfortable doing it, home inspection services are available for a reasonable fee. Having a qualified home inspector look at the house is always a good idea. The older the home, the greater the need for professional inspection.
Once you find the house you want to make your home, work with a REALTOR® to develop an offer.
In the offer, you should specify how much you’re willing to pay. State when the offer expires, and suggest a closing date for the transaction. You can also propose some conditions on the offer. Some common types of conditions are:
- getting a suitable mortgage (include the amount, interest rates and any other figures you feel important);
- selling your current home (the seller may continue to look for a buyer, but will give you the right of first refusal);
- the seller providing a current survey, or a “real property report,” showing the location of the house on the property owned by the seller and that there are no encroachments;
- the seller having title to the property (your lawyer will check this out when he or she conducts a title search to see if there are any liens on the property, easements, rights of way or height restrictions);
- if there is a septic system, the seller should have a health inspection certificate, stating the system meets local standards;
- if you still have any doubts about the home’s safety and construction, you may wish to make the purchase conditional on an inspection by a qualified engineer;
- any inclusions – basically, what stays and what goes.
You will need to present a deposit along with your offer. An appropriate deposit will show your good faith to the seller. The seller’s agent is bound by law to bring all offers to the seller’s attention.
After your offer is accepted and all the conditions are met, the offer becomes binding on both sides. If you walk away from the deal at that point, you may lose your deposit. You may also be sued for damages. Make sure you understand and agree with all of the terms of the offer before signing.
No matter what type of home or property you’re buying, plan on some extra expenses.
In some provinces, you may have to pay a land transfer tax (a sales tax on property).
You may also have to pay:
- a mortgage Broker’s fee:
- an appraisal fee;
- surveying costs (if the seller couldn’t come up with a current survey); and,
- a high-ratio mortgage insurance premium.
- an interest adjustment. Mortgages are normally calculated from the first of each month: if your closing date is the same as the beginning of your mortgage, there will be no adjustment. However, if your closing date is July and you move in on June 15, those last 15 days are the interest adjustment period. Your lender will expect you to cover the cost of the interest during that time.
You’ll also have to reimburse the seller for the unused portion of any prepaid property taxes or utility bills. As well, you must also pay any legal fees, and, if applicable, any REALTOR® fees. Be prepared to furnish proof to your lender that you have insured your new house as well.
Before the property can formally change hands, there are still a few things to do.
On or before closing day, your lawyer and the seller’s lawyer will arrange to transfer title of the property from the seller to you. The mortgage money will be transferred to your lawyer’s trust account, and then to the seller, and your lawyer will bill you all additional expenses such as land transfer taxes or outstanding legal fees.
At this time, be sure to check with your lawyer that everything is as stated in the offer-to-purchase. Once you’re satisfied and the keys to the front door are in your hands, there’s nothing else to say… except welcome home!
(The comments contained on this site are for information purposes only and do not constitute legal advice.)
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