Buying a Home?

As you all know, it is a hot market on the home front.

If you are interested in buying a home, here are some of the issues you should be putting on your checklist.

1.            You need to decide what kind of a home you wish to purchase.  Where would it be, what would be its size, and would it be a new home?  Ensure that, whatever you decide, you can afford it and be comfortable with the costs of the home including heat, hydro, realty taxes, financing costs and maintenance.  Remember, this is your home and you wish to be comfortable.

2.            Try to obtain pre-approval as to financing from your lending institution.  Given how competitive financing has become, you may wish to compare the interest rates from different lending institutions.

3.            You may have already been viewing a home in which you are interested, or you may choose to work with a real estate agent.  There are a number of advantages in choosing a real estate agent, including his or her knowledge of the real estate market.  Bear in mind that it is likely that you are not paying commission on any purchase of real estate.  If you wish to pay a fair price for the home you should compare as many homes as possible.  Also keep in mind that it is likely that your financing will hinge on the value of the home, whether you are obtaining CMHC insured financing or otherwise.

4.            Obtain a vendor disclosure statement with respect to any home that you are interested in purchasing.  This statement is given by the vendor and is to disclose a number of items regarding the home, including the physical state of the home.  Regardless of what the vendor disclosure statement indicates it is recommended that you make any agreement of purchase and sale conditional on a home inspection by a qualified home inspector. See if you can find any references for the home inspector to ensure that he or she is of good reputation.

5.            Before you enter into any agreement of purchase and sale make sure that your financing is in order and, if you have not already done so, contact your lawyer to find out what the closing costs will be.  In Ontario, the buyer of a home must pay land transfer tax at a rate of ½% on the first $55,000, 1% on the next $195,000, 1.5% on the next $195,000, and 2% on the balance of the purchase price. 

6.            Most agreements of purchase and sale are signed without the advice of a lawyer.  To be extra cautious it is recommended that you have your lawyer review the agreement before you sign it.  He or she can make recommendations as to what other terms and conditions you may wish to have included in the agreement.

7.            Once you have entered into the agreement of purchase and sale, be sure to follow up with your financier and lawyer.  Your lawyer will need a copy of the agreement of purchase and sale in order to commence the necessary searches to ensure that title to your prospective home are clear.

Whatever you do, ensure that you exercise great caution in the purchase of your home, since for most people it will be their largest acquisition in their lifetime.  Working closely with your real estate agent, banker and lawyer throughout should safeguard your interests and make the process more comfortable for you.


  

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