By Mary Couturier – Broker of Record – Couturier Realty Group
Buying a home can be an exhilarating albeit scary process. This flyer will guide you, along with your Realtor, through the steps to make buying your home a piece of cake.
Know Your Limit
Unfortunately, buying a house can be expensive, there are one-time expenses and monthly payments that have to be made. Most likely the largest one-time payment you will make is the down payment on the house. The down payment usually consists of 5%-25% of the purchase price.
For down payments that are less than 20% of the purchase price, mortgage insurance is usually needed. In addition, if the purchase price is $500,000 or less than the down payment can be no less than 5%. However, if the purchase price is $500,000 and up, the 5% minimum is still required but an extra 10% on the remaining portion will be added to it.
Adding to the purchase price, there are other multiple singular expenses that might arise.
Getting a Pre-Approved Mortgage
Acquiring a pre-approved mortgage can have many benefits. Foremost, a pre-approved mortgage can guard you against rising interest rates, giving you plenty of time to go house searching. Secondly, it can give you a good idea of what exactly you can afford, limiting the houses you’ll look at, and saving your time.
When you do find the house you want to buy, you will need these three things to affirm you funding.
- Documents that prove you have employment, an income, and a copy of last year’s income tax assessment.
- The real estate listing of the property
- The offer to purchase or the building contract
Common One-Off Costs
- Legal fees and disbursements, due on closing
- A property survey (this is optional and sometimes it is provided by the vendor)
- Mortgage insurance (if it applies), due on closing
- Property inspection fee (optional), due on completion of the inspection
- Home insurance, due on closing and it is ongoing
- Adjustments (such as property taxes), due on closing
- Mortgage insurance (optional), due on closing and ongoing
- Mortgage application and appraisal fee (if it applies), due when the application is submitted
- Property purchase tax, due on closing (in Quebec, its due within 3 months of closing)
Common Monthly Costs
- Mortgage payments
- Maintenance expenses
- Insurance payments
- Condo fees (if applicable)
- Property taxes
Making an Offer
When you choose to make an offer, your Realtor will help you in drafting it and inform you of any concerns they might have.
Your Realtor will give your offer to the vendor or their representative. Keep in mind that the vendor might have other offers as well.
Whether your offer is firm or conditional it is still a legal document, and once accepted, becomes a legal contract.
A Firm Offer
This type of offer is great for the seller, because it means that the property could be sold right away. As soon as the offer is accepted, the deal is ready to close.
A Conditional Offer
When you make a conditional offer, it means that the house will not be sold until all the conditions are waived or fulfilled.
When the Offer is Accepted
Once your offer is given to the vendor it could either be accepted, rejected, or the vendor could make a counteroffer. A counteroffer can then be accepted, rejected, or another counteroffer could be made by the buyer. A counteroffer can bounce between parties until the terms are agreed upon or one of the parties no longer want to carry through with the deal.
Though property inspections are optional, they are highly recommended. An inspector can ensure you that the property is fine in fine condition or that it could use some major work. You will also get a report and an estimate for any repairs.
You may also want to give serious consideration in hiring a legal representative, they can guide you through the legal process of buying a home and supply you with the required legal documents. Your Realtor can suggest several suitable legal representatives.
Since the process of buying a home is different for each province, your Realtor or legal representative will help you to navigate the steps you need to take before purchasing your home.
The 6 Main Elements of an Offer
Based on the Market, area, and you Realtor’s advice, the price you offer may be different from the listing price.
A deposit shows your serious intent to carry through with the sale, and the deposit will be deducted from the final purchase price. Your Realtor advise on the proper amount for the deposit.
The terms include the final purchase price that is being offered. The terms will also include the financing details, you may choose to set up your own financing or ask the vendor if you could assume their mortgage.
If you want to purchase the house exactly how it is, you can make a firm offer. If you want to base your offer on conditions, such as, approved financing or an inspection of the property, you can make a conditional offer. Your Realtor will inform you on the factors you may need to consider.
- Inclusions and Exclusions
Certain chattels or fixtures can be included or excluded from the final purchase. Inclusions will stay with the property upon closing, and exclusions will leave the property upon closing.
- Closing Date
Usually, the closing date is when legal possession of the property and the funds switch hands, unless it’s a special case. Each province has their own regulations about closing dates, your Realtor will be aware of any regulations in your area.
We Are with You Every Step of the Way
We assure that our Realtors will provide priceless knowledge and experience and will be absolutely committed into making the adventure of buying your home as straightforward as possible.