YOUR ULTIMATE REAL ESTATE GUIDE – FOR BUYING YOUR NEXT HOME
STEP 1: Mortgage Pre-approval
A pre-approval or pre-approved mortgage is a written commitment from a lender that details how much money they will lend you, at what rate and at what terms; this tentative approval is subject to their evaluation of the house you intend to purchase.
Lenders will typically guarantee their interest rates for 90-120 days.
Monthly costs of home ownership:
- Mortgage
- Maintenance
- Property Taxes
- Utilities
- Insurance
- Strata fees
STEP 2: Do Your Research
Finding your dream home is easier if you’ve done your research first!
Identify your preferred neighbourhoods, those must-have features for your home; and be sure to separate your needs from your wants while keeping realistic goals.
You will also need to be realistic about what you can afford and be careful to work within your budget.
STEP 3: View Homes With Us
As your REALTOR®, I help you find a home within your budget that fulfills all or most of your needs and as many of your wants as possible. I find potential properties for you, arrange appointments and accompany you to showings at your convenience.
I will also debrief with you after every showing. Once you find the perfect home, we help you present an offer relevant to the value of the home; I will always strive to get the best possible price for you.
STEP 4: Purchase Agreement
Here are some terms you will need to familiarize yourself for a smoother transition and leverage bargaining power:
PURCHASE PRICE = The amount you are offering to pay for the home.
TERMS = The conditions under which you are making the offer.
INCLUSIONS & EXCLUSIONS = The items you want the seller to leave and those you want the seller to remove.
DEPOSIT = The amount of the deposit you are prepared to give, usually 24 hours after final subject removal.
COMPLETION DATE = The date the property legally transfers into your name.
POSSESSION DATE =The day you can finally move into your dream home.
ADJUSTMENT DATE = When you become responsible for the property tax and other expenses.
CONDITIONS = These are clauses in the contract that must be fulfilled in order for the purchase to proceed. The subjects, such as financing, insurance, PDS, title and strata clauses, are included to protect the buyer.
STEP 5: Satisfying Conditions:
A Lawyer or Notary Public prepares documents for transferring property ownership, as well as money from your lender to the seller. A Notary Public maybe a cheaper option, but a lawyer has advantages as they can act on your behalf if complications arise.
Your lawyer or notary does all the legal work for you according to the contract. You will likely meet with your lawyer or notary approximately one week before possession and he or she will advise you what to bring to the meeting; this may include ID, insurance documents, the balance of your down payment, as well as payment of fees, adjustments or taxes. In short, you will finalize all the documentation required before you own your new home.
STEP 6: Hire A Lawyer
Now is the time to complete the conditions of the Purchase Agreement. Typically, the buyer and/or seller, is given 7-10 days to fulfill all the conditions.
If the buyer is dissatisfied with the results of the purchase agreement, he or she may walk away from the purchase without penalty or further obligation. The deposit cheque will also be returned.
As your Realtor®, I play a significant role in ensuring all the conditions are met and to ensure the whole process runs smoothly.
FINANCING =Your lender will usually conduct an appraisal on the property to ensure the home has sufficient value in relation to your mortgage loan. An appraisal fee ranges from $200-$400.
HOME INSPECTION = This is usually done to ensure the home is free from any defects so you can feel confident moving in. A home inspection costs approximately $300-$750 depending on the type and size of home.
INSURANCE = A check is done to ensure the home qualifies for fire and flood insurance.
PROPERTY DISCLOSURE STATEMENT = PDS:This ensures that the current owner has disclose everything about the property.
TITLE SEARCH = Ensures there are no judgments, covenants, rights of way or liens against the property that would affect it’s value or use.
STRATA CLAUSES = You have a right to review the bylaws, rules, general meeting minutes,etc. of the strata(if applicable).
The deposit agreed upon in the Purchase Agreement, is usually due within 24 hours of Subject Removal. This deposit is different from your down payment and signifies you are 100% committed to the purchase. It forms part of a legally binding agreement.
The deposit is held in trust until the condition is fulfilled and will be applied to your closing costs and down payment. If you simply decide to back out of the sale, your deposit will not be refunded.
STEP 7: Completion Day
DOWN PAYMENT.
PROPERTY TRANSFER TAX = 1% on the first $200,000 and 2% of the balance for properties under $2 million. Properties over $2 million will incur a PTT of 3% on the portion from $2 million to $3 million. Further, 2% on residential property over $3 million. Newly build home exemptions: Full exemption for homes purchased under $750,000. Partial exemptions for homes purchased between $750,000 and $800,000.
FOREIGN BUYER TAX = An additional 20% tax on the purchase price is required if the Buyer is a Foreign National.
GST. = 5%ofthepurchaseprice.To be paid on new or substantially renovated residential property. A federal rebate reduces the GST to about t3.5% for homes valued at $350,000 or less.
LEGAL FEES = $850 and up depending on the complexity of the transaction and whether a mortgage is involved.
TAX ON MORTGAGE INSURANCE = If you have less than a 20% down payment, your lender will require that you obtain mortgage default insurance. The insurance fees typically range from 1%-4% of the mortgage amount.
PREPAID COSTS = Reimbursements to the seller for any property taxes, water bills or utilities paid in advance.
DISBURSEMENTS TO LAND TITLES OFFICE = Registering your name on the title, which ranges from $300-$400.
STEP 8: Possession Day
Congratulations! This is the day you have been dreaming of—moving into your new home! It is exciting to get the keys, but there are some things you need to do as you start the process of moving in.
- Make arrangements with a moving company — this needs to be made ahead of time.
- Switch over services such as telephone, cable, internet, gas and hydro
- Inform banks, investments, credit card companies, subscriptions, memberships & clubs of your new address.
- Inform your place of employment, CRA, MSP & all relevant government bodies of your change of address.
- Change your drivers’ licence information
- Inform school(s), doctors, dentists, & health clinics of your new address.
- Obtain school & sports records for your children (if applicable).
- Forward your mail by filling out a change of address form at the post office.
- Provide forwarding information to your landlord if, applicable.
