Buying / Buyers’ Guide
Buying a Home:
Finding the perfect place and then buying it is easy with the Real Estate Advertiser. Your new home is an investment; so here’s how to purchase the best house for your needs.
- Identify your needs.
- Get Pre Approved for your Mortgage.
- Find Your Home.
- Contact your Real Estate Lawyer.
- Make an Offer.
- Complete a Home Inspection.
- Seal the Deal!
Purchase and Sale Agreements:
Get access to free purchase and sale sample agreements when you create your seller account.
Buying Property for the First Time:
Make an informed property purchasing decision that’ll ensure you not just a home, but a sound long-term investment. As a first time home buyer there are some great government grants and mortgage programs offered to assist you with your first home purchase.
You’re Buying Options:
You don’t have to use a real estate agent to buy property, buying a home privately can have many benefits and is safer than you might think.
Home Inspectors:
Home Inspections are a great way to find out information that might not be easily seen to the untrained eye. Home Inspectors often find defect we might overlook. In the event the home is found deficient in any way prior to closing you might be able to negotiate the repairs before you close the deal.
Making an Offer to Purchase:
When you’re ready to buy property, you need to make an offer. Legal offer forms are available from a Real Estate Advertiser representative.
Selecting your Real Estate Lawyer:
When you’re ready to make an offer the best advice is supplied by your Real Estate Lawyer. They can provide advice and knowledge to avoid many of the pitfalls when negotiating the terms and conditions of your next home. Remember – before you sign any document – seek legal advice first. Your lawyer may advise you on matters such as conditions, title issues, mortgage terms, unpaid liens and unpaid taxes on a property before you buy.
Land & Title Registration:
The property transfer process can be drawn out and frustrating. Your Real Estate Lawyer will take care of this; items such as mortgage registration, legal documentation, large funds transactions and title registration.
Advice on Mortgages:
A great idea to help make your offer stronger is to get pre-approved and of course lock it in at the best possible interest rate and terms. Doing this beforehand is a wise choice so that when you find that home you can buy it and call it your perfect home. Talk to your mortgage specialist or banking institution and start today. It’s the best way to find out what you can afford and what your payment commitments will look like.
Closing Costs – those pesky things that can add to the purchase price:
When purchasing property, you’re liable for land transfer tax and some other costs that we might not take into account once we fall in love with the new digs! Here’s what you need to know in order to budget for buying a home.
Using a Real Estate Agent:
Real estate agents are qualified and accredited property professionals, and using one can help make your property sale run smoothly. Quite often a licensed real estate agent will ask if you are willing to pay them a commission or fixed price if they bring you someone who buys your home. This decision is yours, and while we think selling privately is a great idea, we are sure you will agree that you don’t want to restrict the buyer pool to only those people who aren’t using a real estate agent.
Why Should You Buy?
Buying a home is a good long-term investment when you buy in the right neighborhood at the right price. Do your research and find out as much as you can. Plus, buying versus renting makes sense –pay off your own mortgage rather than paying off your landlord’s mortgage.
Land Transfer Tax:
What is it, who pays for it and why do I pay more in some municipalities? Here’s Land Transfer Tax information for home sellers.
Property Insurance Advice:
Your mortgage holder will insist that you have homeowners’ insurance. But you don’t need to use their insurance provider. Find out more and get the advice you need to get the best rates and terms.
CLOSING COSTS:
Will you need to pay any additional costs?
While your down payment and mortgage will cover the purchase price of your home, it’s wise to consider the other expenses involved in buying a home.
You’ll pay some costs at the beginning of the home-buying process and others, known as closing costs or disbursements, when your home purchase is finalized.
Additional costs that could add up when you buy your first home
Property valuation fee:
Approximate Cost: $250 – $400
This is the fee for determining the property lending value for mortgage purposes. This value may or may not be the same as the purchase price of the home.
Home inspection fees: (may not apply if you are purchasing a new home)
Approximate Cost: $500
The home inspector evaluates the structures and systems that make up your home and provides you with a written report. While not mandatory, many people make a professional home inspection a condition of their Offer to Purchase.
Property survey:
Approximate Cost: $750 – $1,000
A survey indicates the boundaries and measurements of the land and positions of major structures, and any registered or visible easements (such as a driveway) or encroachments (such as a neighbour’s fence) on the property.
Land transfer tax: (if applicable)
Varies based on Province
This is charged whenever a property changes hands and is based on the purchase price. Most provinces in Canada charge a provincial land transfer tax and some cities also charge an additional municipal land transfer tax. In some cases, first time homebuyers may be exempt from a portion of this cost. You can obtain further details about land transfer tax on provincial or municipal websites to help you estimate the cost.
As an example, if you are thinking about purchasing a home in Toronto, Ontario for $300,000, the provincial land transfer tax is $2,975 and the municipal land transfer tax is $2,725 for a total cost of $5,700.
Legal fees & related expenses:
Approximate Cost: $1,300 – $2,500
These fees vary by province and are subject to GST or HST where applicable. Ensure your lawyer’s quote includes all related expenses and disbursements, not just legal fees. Make sure your interests are protected by discussing your Offer to Purchase with your lawyer or notary prior to signing.
GST/HST where applicable: (sometimes included in sale price)
Varies based on Province
Some properties are GST and/or PST sales tax exempt and some are not. Generally, HST where applicable is charged on new homes, but not on resale properties. Always ask before signing an Offer.
Title insurance:
Approximate Cost: $250
Title insurance is optional and covers problems that may arise due to encroachment issues (for example, a structure on your property is actually part of your neighbour’s property and needs to be removed), existing liens against the property’s title, title fraud, undischarged mortgages and other issues relating to the property’s previous owners.
Insurance costs for high-ratio mortgages:
Variable
Usually, mortgage default insurance premiums range between 0.5% and 2.75% of the principal plus applicable fees (may be subject to provincial sales tax which cannot be added to mortgage amount)
If your down payment is less than 20% of the purchase price of your home, you must pay a one-time insurance premium on your mortgage amount. You can make arrangements to pay the premium before closing, or it can be added to the principal amount of your mortgage. If it is added to the principal amount of your mortgage, you will pay interest on it at the same interest rate you pay on the principal amount of your mortgage.
Interest adjustments:
Approximate Cost: $100 – $1,000
You will need to pay interest on any gap between the closing date of the purchase and the first payment date of the mortgage. You can avoid an interest adjustment by arranging to make your first mortgage payment exactly one payment period after your closing date.
Prepaid property tax & utility adjustments:
Approximate Cost: $400 – $500
You will be required to reimburse the vendor for any prepaid property taxes or utility bills.
Home insurance:
Approximate Cost $450/year
Protection for your home and contents.
Mortgage life insurance:
Costs vary but can be conveniently included in your regular mortgage payment.
Mortgage life insurance is optional and provides peace of mind. It protects your family’s financial security by paying off all or a portion of your mortgage (up to a maximum of $500,000) in the event of the premature death of you or your spouse.
Don’t forget to consider general expenses such as moving, upgrades, and home decorating costs as well.