| One step at a time. It is imperative that
you not try to jump the gun by first finding a house then finding a
realtor and then seeing if you can afford it. That is sure recipe
for frustration and maybe a serious mistake. It should be done in
the following order. 1. CHOOSE A REALTOR TO ASSIST IN THE
SEARCH: See "". Remember that
Realtors are now required to enter into "Buyer's Agreements"
with purchasers. Ask for explanation on what "agency"
means and which party does your Realtor represent.. You should
also shop around for a lawyer for the transaction. Ask your Realtor
for several names (from different firms).
A realtor has the information you need. You don't
have it by driving around, going to open houses, by reading the
advertisements, by listening to your uncle Harold, or even by shopping on
the internet. It's the realtor's job to have the all the available
information and the experience to know what is useful and valuable to you,
so use it.
2. ARRANGING FINANCING: This should be
done before any houses are seen. Being pre-approved gives you an advantage in assuring the
Vendor that you are serious and able to complete the transaction. Do not sign for a
mortgage, just ask the bank to review your credit status and provide you with a letter
indicating the amount to which you are pre-approved.
Remember
when actually going in to arrange for the mortgage there will be additional costs such as
an appraisal fee, which most lenders will waive if pushed, administration fees, or
insurance premiums, which may reduce the amount actually received, or increase the amount
of the mortgage required. Take note of clauses in the mortgage such as prepayment
provisions, the possibility of changing the size of payments (up or down), and whether or
not the mortgage may be transferred to the next property you buy or assumed by the next
purchaser to buy the property you are just purchasing.
3. DO A CAREFUL SEARCH:
Work with your Realtor to ensure both you and the Realtor fully understand
what your really want. See "" Don't keep anything back in your communication
because it will only lead to frustration and a fruitless search.
Fully explain your needs and wants remember the two are not the same
thing. Tell you Realtor when you are available to see homes.
Give your email to your Realtor to obtain quick news of new
listings. Give feedback when the listings don't seem to match what
you want.
Also, don't buy the first thing you see unless your are
absolutely sure nothing else will do. It is O.K. to spend time
reviewing your options or even waiting until the right home comes on the
market. Remember, the good ones with the right price are sold
quickly so move quickly, again, only if you are sure this is the one for
you. (Notice how caution and a sense of urgency can lead to a bit of
stress!)
Finally, go back for a second look. Sit quietly in
the living room or kitchen. Take an hour if you wish - if you can -
to ensure this is the home for you. Some people spend more time on
buying a new computer that is outdated in three years than in buying the
most expensive and necessary part of their lives.
4. PREPARING AN OFFER:
After selecting your new home, discuss the
requirements of the purchase with your realtor who can advise on such things as closing
dates, necessary conditions, and closing costs ( and above the
actual cost of the property). Also ensure your Realtor is up-to-date on of your financing
arrangements.
Your Realtor will use pre-printed forms. They contain clauses which have
been tested in the courts. When writing standard subject clauses the Realtor will use
standard, approved phrases. For example just to say "subject to suitable
financing" is not adequate and could lead to an unenforceable contract
Conditional clauses set out the conditions which must be met before the
Agreement of Purchase and Sale becomes a binding contract. Common subjects concern
financing, deposits, sale of purchaser's property, inspection by a building inspector
(strongly advised even when buying a new home), lien holdbacks (for new
homes), etc. They
will also show whether or not they are for the purchaser's or the vendor's benefit, i.e.
who may 'remove the condition'.
5.
PRESENTING THE OFFER: After the offer is signed by all the
persons who are to be on title, the Realtor will arrange to present it to the vendor. At
this time the vendor may: accept the offer; reject the offer; or counter the offer. The
Realtor will then discuss the vendor's decision with you. You, the purchaser, may then
accept, reject, or counter (sign back) the vendor's counter offer. This is when most
people start to feel the serious stress. Remember the win-win principle. Both parties
should feel that they have gained from the negotiations.
6. AFTER THE OFFER IS ACCEPTED AND CONDITIONS REMOVED:
Your Realtor
will send instructions to your lawyer along with a copy of the offer. Your lawyer will
search title, order copies of a survey if required (to make sure you are getting the
property you think you are), and find out if there are any charges on title that won't be
discharged by the Vendor (such as liens or easements).
Upon receipt of mortgage instruction from the lender, your lawyer will
prepare the documents including a statement of adjustment, which itemizes all the money
you are paying or getting. The lawyer will ask you to come in for signatures and give you
any instructions concerning other documentation as needed.
Before going to your lawyer to sign the documents, ask for the amount
you will have to pay through him on the closing date. (So you are sure you have everything
in place and there are no nasty last minute surprises.)
The balance of cash to complete the purchase must be delivered to your
lawyer office by certified cheque the day before closing.
7. VIEWING THE PROPERTY BEFORE CLOSING:
This should happen more than
it does. It is important to see the property close to the closing date to ensure that what
you are buying has remained relatively the same as when the decision was made to buy. This
viewing right can be part of the Offer of Purchase and Sale. If you are certain that
the condition is acceptable, you may wish to see the property again to take measurements.
The viewing should be arranged by your Realtor.
8. POSSESSION of your new home is not usually given until noon or
later depending on the time the funds are received by the vendor or their lawyer.
The more likely time is 3:00 p.m. Be very
careful when thinking of asking for early access as there are serious liability and legal
considerations. Also be careful when arranging for movers. You may end up paying for
movers to sit in their van while waiting for the key. |
