Buying a home can be both exciting and sometimes overwhelming.
This guide outlines the steps you and your REALTOR® will follow to make your search a successful one.
Determine What You Can Afford
Purchasing a home involves one-time costs and monthly expenses. The largest one-time cost is the down payment, which typically represents between 5 — 25% of the total price of the property. In addition to the actual purchase price, there are a number of other one-time expenses outlined in this document that you might be expected to pay for.
Obtain a Pre-Approved Mortgage
A pre-approved mortgage protects you against interest rate increases while you look for your new home. Your REALTOR® and Mortgage Specialist will help you find the right home and select the best financing. Once you’ve found the home you want to purchase you’ll require the following in order to confirm financing:
- A copy of the real estate listing of the property.
- A copy of the offer to purchase or the building contract.
- Documents to confirm employment, income and source of pre-approval.
Typical One-Time Expenses
- Mortgage Application At time of application & Appraisal Fee (if applicable)
- Property Inspection (optional) At inspection
- Legal Fees Closing
- Legal Disbursements Closing
- Property Survey (sometimes provided by seller) Closing
- Land Transfer, Deed Tax or Property Purchase Tax Closing (in Quebec within 3 months following signing)
- Mortgage Interest Adjustment Closing & Take Over Fee (if applicable)
- Adjustments for Utilities, Property Taxes, etc. Closing
- Mortgage Insurance Closing (and Application Fee if applicable)
- Home and Property Insurance Closing & ongoing
Typical monthly costs incurred with home ownership are mortgage payments, maintenance, insurance, condo fees, property taxes and utilities.
Depending on local market conditions, your opinion of value, and marketing information provided by your REALTOR®, the price you offer may differ from the seller’s asking price.
The deposit shows your good faith and will be applied against the purchase of the home when the sale closes. Your REALTOR® can advise you on an appropriate amount.
This includes the total price offered and the financing details. You may arrange your own financing or ask to assume the seller’s mortgage, especially if it has an attractive interest rate.
These might include “subject to home inspection”, “subject to buyer obtaining financing” or “subject to buyer selling their property”.
Inclusions and Exclusions
These might include appliances and certain fixtures or decorative items, such as window coverings or mirrors.
Closing or Possession Date
Generally, the day the title of the property is legally transferred and the transaction of funds finalized unless otherwise stated (except in Manitoba and Quebec). Note: In B.C. the Possession Date is legally 1 to 3 days after the closing.
The Major Elements of an Offer
How to Make an Offer
When it comes time to make an offer, your REALTOR® can provide current market information and will assist you in drafting your offer. Your REALTOR® will communicate your offer, sometimes known as an Offer To Purchase*, to the seller, or the seller’s representative, on your behalf. Sometimes there may be more than one offer on a property coming in at the same time. Your REALTOR® can guide you through this process. *Offer To Purchase: a legal document which specifies the terms and conditions of your offer to purchase the home. The offer can be Firm or Conditional.
Firm Offer To Purchase
Usually preferable to the seller, because it means that you are prepared to purchase the home without any conditions. If the offer is accepted, the home is yours.
Conditional Offer To Purchase
Means that you have placed one or more conditions on the purchase, such as “subject to home inspection”, “subject to financing”, or “subject to sale of buyer’s existing home”. The home is not sold until all the conditions have been met. In the province of Quebec, this is referred to as a “Promise to Purchase”.
Acceptance of the Offer
Your Offer to Purchase will be presented as soon as possible. The seller may accept the offer, reject it, or submit a counter-offer. The counteroffer may be in reference to the price, the closing date, or any number of variables. The offers can go back and forth until both parties have agreed or one of you ends the negotiations.
Hire a Legal Professional
A legal professional is there to represent your interests and to provide the legal documentation required. Your REALTOR® can provide you with the names of legal professionals who specialize in real estate.
The legal process differs from province to province. Your REALTOR® or legal professional will advise you on the steps to be taken before the keys to your new home are presented to you.
Have the Home Inspected (optional)
Having the property inspected by a qualified home inspector will give you the added confidence that you’ve made the right decision (costs vary). When the procedure is complete, you may wish to ask for a full written report plus estimated costs for any necessary repairs.
With You at Every Step
Your REALTOR® brings invaluable knowledge and expertise to the home-buying experience — and are dedicated to your needs from the search and purchase to the move-in process. Please don’t hesitate to call your REALTOR® if you have any questions.