You can also
view MLS® listings posted to the national mls.ca web site. It
features area maps, photographs of available properties and has
links to the listing agent.
When you select
a property and decide to visit a house, there are many things to
consider. Does it have all the features you wanted? Is the neighbourhood
what you expected? Try to picture your favorite furnishings in a
room. Remember all of the technical considerations:
- what type
of wiring does the house have?
- what about
power outlets? Different appliances use different types.
- what type
of heating system does it use?
- what about
the roof and foundation?
- what condition
are the windows in?
- what about
There are other things to look at as well. If you don't have time
or don't feel comfortable doing it, home inspection services are
available for a reasonable fee. Having a qualified home inspector
look at the house is always a good idea. The older the home, the
greater the need for professional inspection.
Once you find
the house you want to make your home, you can work with a REALTOR
to develop an offer. In the offer, you should specify how much you're
willing to pay. State when the offer expires, and suggest a closing
date for the transaction. You can also propose some conditions on
the offer. Some common types of conditions are:
You will need to
present a deposit along with your offer. An appropriate deposit will
show your good faith to the seller. The seller's agent is bound by
law to bring all offers to the seller's attention.
- getting a
suitable mortgage (include the amount, interest rates and any
other figures you feel important);
- selling your
current home (the seller may continue to look for a buyer, but
will give you the right of first refusal);
- the seller
providing a current survey, or a "real property report,"
showing the location of the house on the property owned by the
seller and that there are no encroachments;
- the seller
having title to the property (your lawyer will check this out
when he or she conducts a title search to see if there are any
liens on the property, easements, rights of way or height restrictions);
- if there
is a septic system, the seller should have a health inspection
certificate, stating the system meets local standards;
- if you still
have any doubts about the home's safety and construction, you
may wish to make the purchase conditional on an inspection by
a qualified engineer;
- any inclusions
- basically, what stays and what goes.
After your offer
is accepted and all the conditions are met, the offer becomes binding
on both sides. If you walk away from the deal at that point, you
may lose your deposit. You may also be sued for damages. Therefore
make sure you understand and agree with all of the terms of the
offer before signing.
One issue for
most buyers is the affordability of the mortgage. A quick way to
calculate how much you can afford is to use the gross debt-service
formula (GDS). Most financial institutions will require that the
Principal, Interest and Taxes (PIT) on your mortgage loan not exceed
30 per cent of your gross income. Increasingly, financial institutions
will factor energy costs into the PIT formula, moving the rule of
thumb GDS from 30 to 32 per cent.
You can work
it out in reverse: multiply the monthly payment on principal, interest
and taxes (include any condominium maintenance fees) by 40. So if
your monthly payment for these items is $1,000, you'll need a gross
annual income of at least $40,000. Discuss your mortgage limit and
different types of mortgages with your REALTOR or financial advisor
before you seriously begin the search for a home.
mls.ca web site, home buyers can automatically calculate their estimated
mortgage payments on listings. Simply find your desired property
and click on the mortgage calculator to determine what your estimated
monthly mortgage payment is on that specific listing.
No matter what
type of home or property you’re buying, plan on some extra
expenses. In some provinces, you may have to pay a land transfer
tax (a sales tax on property).
You may also have to pay:
- a mortgage
- an appraisal
costs (if the seller couldn't come up with a current survey);
- a high-ratio
mortgage insurance premium.
- an interest
adjustment. Mortgages are normally calculated from the first of
each month: if your closing date is the same as the beginning
of your mortgage, there will be no adjustment. However, if your
closing date is July and you move in on June 15, those last 15
days are the interest adjustment period. Your lender will expect
you to cover the cost of the interest during that time.
have to reimburse the seller for the unused portion of any prepaid
property taxes or utility bills. As well, you must also pay any
legal fees, and, if applicable, any REALTOR fees. Be prepared to
furnish proof to your lender that you have insured your new house
Before the property
can formally change hands, there are still a few things to do. On
or before closing day, your lawyer and the seller's lawyer will
arrange to transfer title of the property from the seller to you.
The mortgage money will be transferred to your lawyer's trust account,
and then to the seller, and your lawyer will bill you all additional
expenses such as land transfer taxes or outstanding legal fees.
At this time,
be sure to check with your lawyer that everything is as stated in
the offer-to-purchase. Once you're satisfied and the keys to the
front door are in your hands, there's nothing else to say... except
(Note: The comments
contained on this site are for information purposes only and do
not constitute legal advice.)
The Canadian Real Estate Association. All rights reserved.