Articles-Buying a home

Buying: What investment allows you to have the best RRSP you could ever have, provides shelter, pride of ownership and at the end tax free money or retirement income via reverse mortgage? Your home!!!

Steps to Buying a Home:

  1. Financing - Most buyers need to obtain a mortgage when purchasing a home. The mortgage you need to qualify for, is the amount of the Purchase less the amount of Down Payment you are applying.

    There are two types of mortgages:

    • Conventional which requires you to have 25% of the Purchase price and thus no more than 75% of the purchase price for the mortgage.
    • High-Ratio Mortgage is above the 75% mentioned earlier.
  2. Find your dream home -Purchasing a home is probably the biggest investment decision that you will ever make. You definitely would want a team of professionals to assist you. A Mortgage Lender, a Lawyer, a Home Inspector are a few professional people to aid you in a safe purchase. And, who is able to help you find your home and help you contact all the others? A professional Real Estate Salesperson.

  3. Your salesperson -Selecting a professional real estate salesperson provides you with someone who can help you find the right house - remember the three words of real estate: Location, Location, Location -, negotiate the offer and assist you with financing, inspections and all relevant aspects of the purchase. The salesperson, now, has access to the MLS or Multiple Listing Service and is able to find the area and the best house for you. It is best that you select one and only one salesperson to work for you. It used to be that it was best to select a salesperson who 'worked the area'; but, that is really not the case anymore. A good salesperson can obtain all the data regarding the neighbourhood, the current 'For Sales' and the 'Solds' and ALL in a very short time.

  4. How much will it all cost?

    • Deposit - this is an amount that you need to have ready when you make an offer to purchase. If your offer is accepted by the seller then your cheque will be cashed within 48 hours.
    • Down Payment - This is the amount of cash or equity that you placing against the property purchase (this includes the Deposit)
    • Inspection Fees - These are fees that you may pay to have someone inspect the home you are planning to purchase. ie: Home Inspector and/or Pest Inspector.
    • Financing Fees - Your lending institution may require appraisal fees, application fees
    • Condominium - You may pay for documents that you and your lawyer will approve that is prepared by the Condominium Corporation. You may have to pay for up to 3 months maintenance fees on closing.
    • Land Registration Fees- Land Transfer Tax, Deed Registration and other government fees.
    • Legal Fees and Adjustments - Your Lawyer's basic fee + his disbursements (Land Transfer Tax, Deed Registration etc) and any amounts that the seller has pre-paid past the closing date (realty taxes, water, oil).
    • Survey - You may be required by the mortgage lender to provide a suitable survey. This may be obtained from the Seller but such may not be up-to-date- enough for the Lender
    • Title Insurance - Most purchasers are buying Title Insurance that protects you. Talk to your lawyer about the fees and protection.
    • Service Hook-Up Fees - In some areas you may have to pay the utility company a fee or deposit in order to have their service available.
    • Miscellaneous - In some situations you may need water or soil tests. Other expenses for the purchase and move are: Do you need to buy appliances, outside equipment such as snow shovels, gardening equipment; painting and fix-ups.
    • Moving - You should have available funds for moving
  5. The offer process -Once you know how much a home you can buy and have found the home, then you are ready to prepare an Agreement of Purchase and Sale. This process is handled by your salesperson. The offer consists of how much you are willing to pay for the property and when you want close the deal or take possession. The offer may contain 'conditional' clauses. These conditional clause are usually in the form of you doing something or checking something and if it is satisfactory to you then you will continue with the 'deal'.

    There are normally two conditions: financing and home inspection. Once you are sure that you have the financing and that the home inspection reveals no major deficiencies then you 'waive' or remove the conditions on the offer and you then have a firm and binding agreement.

  6. Get ready for possession -Start preparing for your move well ahead of the closing date. Mailing address change, telephone activation, utilities, and movers should be contacted and arrangements made for the day of closing. In the case of apartments you should check with the Supervisors in order that you would have an elevator reserved.