Buyer
Information
Whether it's the first time you buy a home or the 10th time, it is an
exciting time for you and your family and it is important that it also be a
pleasant time. You can read all the books you want and listen to all the advice
your friends and family are going to be giving you (whether you want the advice
or not) but the final decision is going to be yours and yours alone. That’s an
exciting time but also sometimes a scary time. There are a lot of questions you
are going to have and where do you find the answers ?
- What kind of a house are we looking for ?
- Where do we want to live ?
- How do I find a house (I hear the market is hot and I don’t want to miss
the right house) ?
- What can an agent do for me and does it cost me money ?
- How do I find out about agency, home inspections, engineers, lawyers,
mortgages and all that other information ?
Buying a home is likely to be the biggest single financial
transaction of your life. It can be a very exciting and emotional experience,
but sound advice from your real estate professional will go a long way to making
it a smooth and problem free process.
Typically, there are many steps involved in the process of buying a home,
including:
- meeting with your realtor
- determining your needs
- financing options
- looking at properties
- making an offer - the contract of purchase and sale
- completion and moving
- additional costs
While not every real estate transaction will involve all of these steps, we
have provided information on each so you will know what to expect.
Let's take a look at a brief outline of each of these steps.
- Meeting with your Realtor
As with all major financial decisions, seeking sound professional advice is
certainly prudent. Meeting with Peggy Arnold, a competent
realtor is an important part of this process. Peggy Arnold is a
licensed real estate professional, adhering to a strict ethical code and
committed to representing and promoting your best interests.
- Determining your needs
What
are you looking for? What do you need versus what you want? By
determining your needs from the outset, this will provide a focus to make
efficient use of both your time and your realtor’s time. Peggy Arnold
will help you put together a prioritized list of your requirements such as
price, your location, accommodation and other needs or preferences you may
have. Peggy Arnold will then bring her experience into play and
counsel you with regard to your various options.
- Financing options
Mortgage pre-qualification: what does this mean to you? Peggy Arnold and the
mortgage broker or financial institution will discuss financing options and
provide you with a mortgage amount and rate guaranteed for a certain period
of time. Being pre-approved is advantageous for the following reasons:
- it may help you refine your search parameters;
- the guaranteed interest rate lock in period protects you from interest
rate fluctuations; and
- it will allow you to act more quickly when you find a property you
would like to make an offer on.
- Looking at Properties
By now you should have your requirements and your financing in place. Now
you're ready to start looking at properties! Of course, you may have already
been looking at homes advertised in the newspaper or on the internet.
However, your realtor has access to the database of all properties for sale
on the Multiple Listing Service ® and can provide you with specific
information you may not have access to. Furthermore, they may also have
access to listings on the MLS ® that may not have been advertised yet.
In many cases, once you've looked at some properties, it may be necessary to
redefine your search criteria. Depending on availability and market value,
your realtor will help you juggle your "wants" and
"needs" and find you that perfect home!
- Making an offer: the Contract of Purchase and
Sale
So you’ve found the perfect home! This is when your realtor’s knowledge
and training becomes invaluable - they will construct a legally enforceable
contract containing terms that suit your needs and protect your interests.
Part of this stage involves determining market value, ascertaining the
condition of the property, stating how much you’re willing to pay, paying
a deposit, suggesting a closing date, expiration of the offer, and a
proposed set of conditions. Your realtor will:
- negotiate on your behalf under the terms of the agency outlined in the
contract;
- explain the whole legal process; and
- what you are committing to.
Typical conditions may include a subject to financing, subject to
inspection, subject to survey, subject to the sale of another property, and
so on. Realtors are trained to use the appropriate legal terminology to suit
the type of property you’re interested in purchasing. The issues can be
complex.
The offering process often involves making or receiving counter-offers which
your realtor negotiates on your behalf.
- Completion and Moving
Now it's time to close the deal.
When an Offer has been accepted and all subject clauses removed, a deposit
of at least 5% is normally held in Trust in accordance with the Real Estate
Act. This amount forms part of the purchase price upon Completion.
Completion may be any date in the future as stipulated in the contract, and
is typically 60-90 days between Acceptance and Completion. As Completion
approaches, you will need legal representation – your realtor can help you
with this. Your legal representative will arrange to transfer title of the
property from the seller to you, the mortgage financing will be transferred
to your legal representative’s trust account, then to the seller, and the
financial closing details will be recorded on a statement of adjustments.
You then take possession of the property, normally a day or two later, as
set out in the Contract of Purchase and Sale.
- Additional Costs
In addition to the purchase price, you will need to take into account
additional or extra closing costs that may be involved in the purchase.
For example:
- property purchase tax of 1% on the first $100,000 and 2% on the
balance will be applicable;
- G.S.T. is applicable on all new home purchases (which will be covered
in your Contract of Purchase and Sale);
- if you have high ratio financing , a mortgage insurance premium of up
to 2.5% may apply;
- moving expenses;
- home insurance;
- appraisal fees;
- surveying costs;
- your share of property taxes and utilities as outlined in the
statement of adjustments; and
- legal costs and disbursements;
It is obviously prudent to cover all of these issues with your realtor as early
as possible.
The above steps will vary from transaction to transaction, but in all cases,
early consultation with a realtor will streamline the process and ensure a more
pleasant home buying experience.
CALL PEGGY ARNOLD TODAY (204)
334-2800 or EMAIL peggyjeanarnold@aol.com
These comments are for information purposes only and do not constitute legal
advice.
