CREA – The Canadian real Estate Association – provides a number of different and useful resources to help the public buy or sell a home. A summary of the tips will be provided in a series of two articles. This first part will start with a summary of CREA’s advice for house buyers.
Tip 1 – Before starting to search for a house:
- Consider what features do you need (number of bed rooms, garage, backyard, fireplace, etc.), create a list and decide what’s most important for you.
- Think about the ideal location in terms of distance to work, schools, shopping and entertainment. It may be somewhat limited by the price range you can afford.
- Evaluate what kind of property you would like to look for: detached, semi-detached, townhouse, high rise, how many storeys, freehold or condo, etc.
- Consider the budget you have available and note that there are numerous additional expenses that need to be paid to complete a purchase of a home, such as land transfer tax in certain provinces; a mortgage broker fee; an appraisal fee; surveying costs; a high-ratio mortgage insurance premium; a mortgage interest rate adjustment if closing date is not the first of the month; reimbursement to seller for unused portion of any prepaid taxes or utility bills; legal fees and, if applicable, realtor fees.
Tip 2 – Select a realtor to work with who can answer questions and help you navigate through what can be a complicated business transaction.
Tip 3 – Search for a house. The realtor can search for multiple properties available to try to find the ones that meet your specifications. You can also view listings in Board MLS (Multiple Listing Service®) Systems.
Tip 4 – When you decide to visit a house compare against your list of features, evaluate the neighbourhood, imagine your furnishings in place and also inquire technical characteristics such as type of wiring and power outlets, type of heating system, maintenance level of roof and foundation, condition of windows and general state of the plumbing. Hiring home inspection services is also recommended, especially on older homes.
Tip 5 – Once you find a house you are interested in, the next step is to make an offer. On it you should specify the price you are willing to pay, the day when the offer will expire, suggest a closing date and propose some conditions like:
- Getting a suitable mortgage amount and mortgage rate
- Selling your current home
- Obtaining a “real property report” showing that there are no encroachments on the property
- The seller having title to the property
- If there is a septic system, the seller having a health inspection certificate
- Any inclusion of appliances – what stays and what goes
- A professional inspection
A deposit needs to be presented along with the offer
Tip 6 – Once the offer is accepted, it becomes binding on both sides. Before the property can change hands you need to prove to your mortgage lender that you have insured the new house. On or before closing day, both sides lawyers 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. Your lawyer will bill you all additional expenses such as land transfer taxes or outstanding legal fees.
At this time, check with your lawyer that everything is as stated in the offer-to-purchase.
The comments provided by CREA to help house buyers are for informational purposes only and do not constitute legal advice. The next part of this article will summarize CREA’s advice for Sellers.