Buying Guide

You may have heard it said that home buyers are not responsible for paying agents because they are paid on commission from the sale of the property. Regardless how they are paid, they receive thousands of dollars for helping buyers with the purchase of a home. With that much money on the line, why is it that some buyers sign contracts with the first agent they speak with?

To help you find the best agent for you, we have compiled a list of questions to ask and some tips to find the best fit for you.

How do I go about finding an agent?

Common methods buyers use to find agents:

• Friends and Family: Many people know someone, or have a relative who is a real estate broker or agent. Just because you are familiar with this person does not mean they will make the best agent for you. You have to determine if he/she knows the neighbourhood in which you are looking to buy? Are they tough when it comes to negotiations? Will you feel comfortable discussing things with them when you are not satisfied, or finding another agent if they are not getting the job done right? If you are going to engage their services, you should be willing to hold them to the same standards you would expect from an agent you have just met.

• Referrals: Referrals are a great way to find a good agent, but do you know anyone who has just gone through the process of buying a new home. The agent you choose should be familiar with the areas you are interested in and capable of dealing with your special requirements. Can they work to shorten the process of buying bank-owned properties that are on the short sale list?

• Internet: Most brokerages and real estate agents these days have websites where you can examine testimonials and see what others are saying. Yelp.com and other review sites are other places you can go to find out more about agents in the area.

• Open Houses: By entering your name and contact information on the guest registry at open houses you are placing it on the calling list of the agent showing the home. This is not a recommended method of locating a good agent, however, if you do want to do this, first do some homework. (take a look at our Questions to Ask an Agent, below).

Tip: Hold on Don't Sign Right Away

There is a procuring cause in real estate that basically means that agents get paid as buyer's agents once the buyer has signed the document stating that "this is the agent who made my home purchase possible." Technically, this is the buyer's agency agreement. By signing this agreement you are locking yourself into a contract with the agent. It can be quite difficult to divorce yourself from an agent who has this signed document, even if you decide that you want to use another agent. This can come into play particularly if you buy a home what was shown to you by the ex-agent that showed it to you first. At some point, you will be asked to sign this agreement, but before doing so:

• Ask the agent to work without an agreement for a short time, but spell out how long that will be.

• Determine the length of time for this agreement and shorten it if possible.

• Find out if there is an "escape clause" included in the contract that allows you to get out of it if you are not satisfied with the service the agent provides.

• Get everything in writing, particularly any requested changes.

• At the end of the day, in all fairness, if you finally buy a home shown to you during this trial period be sure to purchase it through this agent.

Researching an Agent

Not long ago, it was difficult to learn about an agent without having some first-hand experience with them. Other than getting personal references or calling the Better Business Bureau, little could be done to get inside information about the performance of any agent.

This has all changed in a very short time. Today, researching an agent is easier than ever. We have provided some online resources for doing this.

• Yelp.com: This is a site where customers can submit ratings and reviews of businesses and that includes real estate brokers and agents.

• Google: See what is out on the Internet about an agent by placing their name in Google's search bar.

• LinkedIn: This is a professionals networking site where many agents have profiles. This is a good way to find out about their connections with other professionals and where colleagues and clients have the opportunity to post testimonials.

• MLS Licensing Board: There is a lot that can be learned about agents by going to the MLS Licensing Board of the province/city in which they operate. Information displayed there varies, but you should be able to find their license number and status and the name of he real estate agency they work with. Some real estate boards also have information about continuing education credits and any disciplinary action that has been taken against any agents that do not respect the MLS code.

Questions for a Real Estate Agent

Prior to agreeing to work with a real estate agent or real estate broker, you should make every effort to ensure that you can work with them. Here is a list of questions that you should and an agent before actually signing a contract to have them work on your behalf.

No matter where or how you find a real estate agent, asking a few questions right at the beginning can save you from a considerable amount of trouble further down the line. Below are a few questions to ask a real estate agent before you decide to do business with them:

Is This Your Full Time Job?

Do you do this full time, and if so, how many clients do you work with per year on average? An agent who does this sort of work day in and day out will almost certainly be familiar with current market trends and current laws.

How Many Transactions Have You Dealt With In My Chosen neighbourhoods?

Ideally, you want to use an estate agent who is familiar with the local property market in the various neighbourhoods where you are willing to buy.

All Businesses Have Unhappy Customers, How About You?

If a real estate agent says they've never had an unhappy client, they're most likely being dishonest. Don't fret too much if they tell you they have had sour clients, but at least ask them what caused those clients to be unhappy.

Have You Ever Had An Official Complaint Filed Against You?

Many people feel a little uncomfortable asking this sort of question, but if that's the case, then you can inquire at the State Licensing Board.

How Are The Fees Determined?

Pay close attention to the answer you get to this question, bearing in mind that the seller is responsible for paying the agent, using the money you will be paying for the property. While there isn't any risk for you, you can still help to ensure the agent is treating the seller fairly. To do this, ask the agent what his commission will be if you buy. This will also give you an idea if the agent is trying to sell you a particular property purely because he'll be getting better than average commission.

Apart From Negotiations And Escrow, What Other Services Do You Offer?

You might even want to draw up a list at this point, bearing in mind that their services should include all negotiations; all necessary paperwork, as well as contingencies. This is the minimum you should be willing to accept.

At What Point Do I Become Obligated To Work With You?

Numerous people get involved in the buying process without actually realizing it could make them legally obligated to work with a particular agent. This can happen regardless of whether there's a contract or not.

Who Else Will I Be Dealing With?

It's not unusual for an agent to be supported by a team, but the person you are dealing with should do most of the work.

Am I Obligated To Work With Other People, Including Lenders And Inspectors?

A ""Yes"" answer to this question should immediately set your alarm bells ringing. Many agents can recommend top class lenders; inspectors and other service providers, but they should never pressure their clients into using people they recommend. It is also illegal for any real estate agent to force their clients into using a service provider recommended by them.

Do You Represent Both The Buyer And The Seller?

When an agent represents the buyer and the person selling the property, it's known as a ""dual agency"" and it's a situation which is best avoided. If your agent is representing the seller, their job is to get the best possible price for the seller, so how can the agent then also try to get you the lowest possible price?

What Qualities Do You Have That Other Agents Don't?

Many clients tend to get swept away by the enthusiasm of a real estate agent, but in fact, they should rather look for expertise. Ideally, you need an agent who has experience in your preferred neighbourhood, and also a long list of satisfied clients.

What Options Do I Have If I'm Unhappy With Your Service?

Virtually all real estate agents get paid once you've bought the property, so it stands to reason that they want to finalize the deal as soon as possible. Once you've signed the papers, you're pretty much at the mercy of your agent, so it's a good idea to ask them if they can guarantee your satisfaction. Also ask them what sort of recourse you will have in the event of a bad experience.

Can I See Reviews And/Or Client Testimonials?

Nearly all agents have some clients who think the world of them, but really good agents will deliver an outstanding service consistently, and therefore have more than just a handful of happy clients. Reading through a few handpicked testimonials is not going to tell you much. You want to also see the not-so-good testimonials. A good agent has nothing to hide, and they should be more than happy to share some of their negative experiences with you as well.

There are several different roles that real estate agents play during the process of buying homes. Following are some of the most common of these and some important advice to consider as a means of avoiding what is called dual agency.

Buyer’s Agent

When shopping for a home, it is typical to turn to an agent for advice. They will help gain access to the home for a tour, assist in determining an appropriate offer and work to negotiate a good price. The common term used here is the buyer’s agent. Nevertheless, within the real estate industry these individuals are commonly called the selling agent. (It is confusing, we know, but you need to know that this term may be present on paperwork and you need to know what it is all about.) You should know a little about what a buyer’s agent does.

The primary duty of a buyer’s agent is working to ensure that the best interests of the buyer are represented. These are some of their duties while performing this task.

• Assist as you tour homes

• Advise on homes for sale

• Does CMA or comparative market analyses for you

• Offers advice about pricing and develops your offer

• Negotiates on price and repairs with the seller

• Offers advice and assistance in finding lenders, inspectors and other service providers

• Gives assistance during closing and contingencies

How to choose a good agent

There are a couple of steps that must be taken while choosing a good agent. These involve finding one and then making sure that they are a perfect fit for what you need. You can read our page dealing with finding an agent and learn about each of these steps.

Seller’s (Listing) Agent

In the same way buyer’s agents should work in the best interests of the buyer they represent, a seller’s agent (listing agent) should also work in the best interest of the seller.

Seller’s Agent

The seller’s agent should always work to obtain the best deal possible for their client. That means securing the highest price possible for the home being sold. This is only one way that success can be measured. Another is selling the home as quickly and trouble free as possible. In truth, it may not be worth all the trouble of getting full price for a property if it takes two years to do it and a lot of headaches caused by multiple failed deals.

Generally speaking, seller’s agents are charged with these roles:

• Perform CMA and advise on pricing

• Help locate service providers such as stagers and photographers

• Markets homes to buyers

• Host open houses

• Negotiate repairs and prices with buyer

• Handle communications with buyer’s agents

• Assist sellers during contingency and closing process

Tip: Be Cautious About Dual Agency

This scenario may happen to you. You are attending an open house when the seller’s agent asks if you are working with an agent. You answer no, but the agent says there is no problem with that. They are able to represent you as well as the seller at the same time. It is very important that you do not step into this trap of dual agency. This situation is not good, particularly for buyers.

Take a look at it like this; the seller’s agent is looking out for the interests of the seller who is interested in getting the most money possible for the property. Is it possible for that same agent to perform dual duty getting the best price for the buyer as well as the seller? In addition to that, the seller’s agent typically gets a larger commission when the home sells than the buyer’s agent. This presents a conflict of interest when dual agency is used.

The advice is simple: do not go with dual agency. Your agent should always be working solely for you.

Is it possible for me to work as my own buyer's agent?

There are instances when the best agent to work with is you. Even though we typically advise that buyers to work with an agent, particularly those who have never bought property before, you are the only one who can decide what is right for you.

You real estate agent plays a pivotal role in your search for a home. Choosing the right real estate agent is an important decision – an agent can either make or break your experience. Just because your friend had a good experience with an agent, doesn’t mean they are the right agent for you.

It’s important to find an agent who is responsive – returns phone calls and emails in a timely manner – and who you feel comfortable around. Similar to a lawyer, you’ll want to find an agent that specializes in the types of properties you’re looking at. Here are our tips for hiring the right real estate agent.

Referrals

Chances are you know someone who has bought or sold a home recently. Asking family, friends, coworkers and even professionals for advice is a great way to get referrals. Although word of mouth is a great place to start, it shouldn’t be your only source.

While one agent may not be a good fit for a certain buyer, he or she may work well with another buyer. It all comes down to personalities and styles. First-time homebuyers typically need an agent who is more hands-on – sometimes agents just don’t have the time to dedicate, so it’s important to find an agent who does. New construction is a lot different than resale, so you should look for an agent who specializes in the type of home you’re looking for.

Open Houses

What better way to find an agent who knows your neighbourhood like the back of their hand than open houses? Not only are open houses a great way to gauge the market, they’re a good way to meet real estate agent. If you’re buying new construction, chances are the only open house you’ll attend is an onsite visit from the sales manager, but there’s nothing stopping you from visiting resale homes and speaking with agents there.

Advertising

Real estate agent are in the business of buying and selling, so it should come as no surprise their faces are plastered everywhere. From direct mail to billboards, you can find out the name of a real estate agent just by walking down the street. Although the agent with the biggest advertising budget doesn’t always translate to the best agent, it doesn’t hurt to give them a phone call and hear what they have to say.

Real Estate Brokerages

If you walk to work, you probably walk by at least one real estate brokerage. If you’re looking to buy or sell a home, agents will be more than happy to help out. Take a moment to stop inside and setup an appointment to meet with a real estate agent of your choosing.

Multiple Listing Service (MLS)

The MLS website isn’t just a great place to find a home; you can also find an agent. Visit the website today and search for an agent near you today. Be sure to set up an appointment face to face before making your final decision.

As you do a home search online, you will discover that you have access to a wide selection of powerful tools.

Searching For Your New Home

The website www.realtor.ca displays full MLS listings. This is different from other real estate websites that will only give you a small fraction of the listings. These full listings will help you to find a home.

As you do a home search online, you will discover that you have access to a wide selection of powerful tools.

Look at the Home's Details Page

As soon as you find a home, it will be time to review the details. While browsing the home details page, you will be able to find all the information you have access to, listed in one place. You can browse photos, details about the house along with information on previous sales, changes in price, all county records and the local housing price trends. You'll even be able to see homes in the area with similar features and more that can help you with your home search.

Different Property Types

• House: This is the typical choice for searches. This is a detached building that is a single family home. With this type of sale, the property is included with the land.

• Condominium: With the condo, you own a single unit in a multiple unit structure. This is similar to an apartment. Each of the condos is owned by a person, while there are common areas that the community shares in the complex. Typically, there is a homeowner's association on these properties you have to pay each month, but the property is cared for and any policies in place are enforced.

• Townhouse/Townhome: This style of home is usually a two or even a three story unit. The structure shares an adjoining wall with an adjacent unit. With these structures, a property owner owns their home as well as an undivided interest in the community's common area. Traditionally, the townhouse owner owns the physical structure instead of the airspace where the home is located, unlike a condo where a small space is owned. Modern townhouses are different though, as more builders are using the term to describe a construction style.

• Multi-family: When you are looking to find a home that is a little different, the multi-family unit can be s mart choice. This s a home where multiple people share the home and can include places like a duplex or even a condo, the duplex though has the land recorded on a deed. In comparison a condo owner will own their unit and that is all. Home.ca will show you the multi-family homes for sale in the MLS and we can service tours and offers on these properties with up to four units.

• Land: While you can include this in a home search, this is land that has no permanent residential building or has a tear down item. While Home.ca doesn't offer services for this property type, it is possible to add it into your search results, so you can gather more info.

• Other: When there are properties that might not fit into other categories, they will be listed here. This can include parking structures, timeshares and even ranches. While Home.ca won't service these properties, they should still be an option to consider when you are searching listings. That way you get the most accurate information possible.

Listing Types

• MLS-Listed Home: When reviewing these listings, you will note that they have been entered into the Multiple Listing Service by the owner of the property or their agent. This is the majority of the listings you will find.

• MLS-Listed Foreclosure: Listed by the agent or the owner in the MLS, the marketing remarks will have the keywords listed in the comment section as foreclosure or bank-listed-foreclosure.

• Foreclosed Home: This is the list of homes in foreclosure. The homes may not be for sale at the moment, but they may be listed in the future after the bank has had time to process them. They will then be listed in the above mentioned section.

Schools

• School: Home.ca will show you the local schools in an onscreen map with your results. When you click on the school, you can read additional information with your results. It is important to note that close proximity is not a guarantee your child can be enrolled. If you have questions, you should consult with the school.

Looking for a home is fun and hectic at the same time. There is no set way to start out on and carry through with this task. We have three steps we like to recommend when people go out to view homes. They can be done in any order and repeated as often you want. To get the most done with the maximum benefits in a short time, we recommend:

Selection 1: The Open House Event

Open house events are actually fun to attend. The real estate agents representing the current homeowner host the open house. Your agent does not need to be with you, so you can check out the home yourself.

It's common for potential homebuyers to spend the day looking at the various homes in the area holding open-house viewing. The event usually takes place between 10 in the morning and 4 in the afternoon on Saturday and Sunday. Be sure you arrive between those times so you have a chance to look around the different homes.

There are a few pitfalls that might occur because your agent is not accompanying you. Following are some dos and don'ts that will avoid problems.

1.DON'T arrange or attend a follow-up meeting either the agent hosting the open house or directly with the listing. Your own agent will accompany you if you want another look.

2.DO avoid misunderstandings by indicating that you are or intend to be represented by an agent. This option should be offered on the sign-in sheet for the open house.

3.DON'T fall for the occasional trick where a listing agent says that you have to work with her or him because you failed to clearly spell out that you already had representation when you were at the open house event. Fortunately, this scam is seldom encountered.

4.DO ask your agent to schedule a follow-up showing and attend it with you.

5.DON'T visit new homes sales centers or construction open house events until you speak to your own agent. He or she will check to be sure it's okay for you to attend without them. MLS offers cooperating brokerage offerings, but quite a few new construction projects are not part of the local MLS. It's possible the builder can refuse to recognize your agent as your representative.

It can take as little time as a few minutes to evaluate the property to about thirty minutes. There might be some areas that are off limits, but those will be locked or you will be told them. Other than that, feel free to walk around and look at the property, outbuildings and home. You can actually stay for the entire time of the open house, if you desire.

Selection 2: Book a Home Tour

One of the things you will discover when attending an open house event is that it often gets very crowded. This might be a home you are interested in buying, yet there is not enough time to ask all your questions. In addition, there may be some areas you cannot during the open house.

You'll need to book a home tour, which gives you a detailed house viewing, through a buyer's agent. If you haven't been preapproved for a loan yet, the agent might require you to have it done before booking the home tour.

A Real Agent will email the directions to the house, as well as the confirmed time for the home tour. The two of you will meet and go through the first home you want to look at. If there are other homes on your list for the day, you and the agent will get back in your respective vehicles and head for the next location.

Selection 3: Discovery through a Drive-By

It always makes sense to drive around an area that you are considering for your home, especially the immediate neighborhood where the home or homes are located. This tour is often referred to as a drive-by. It's designed to let you gather the information needed to decide if you're interested enough to attend an open house event or talk with an agent.

There are a lot of things you can do in a drive-by to learn more about the neighborhood. You want to feel as if you and your family will fit in here before you sign a contract of purchase. Ride your bike, drive your car, or walk around the area to get an idea of what it's like. What are the ages of other homeowners? Is there a grocery or convenience store nearby? What about an urgent care clinic and the location of schools?

Talk to the people that you meet to get their opinion of how they feel about their area. Use these tips and online resources to help make the drive-by a good use of time.

Judging Walkability

Walkability includes a number of factors besides paths and sidewalks that take you from one place to another. Enjoying a walk because of shopping, friendliness of people, and a worthwhile reason to stroll down the walkway are some considerations. Park the car near the home you are considering and walk a ways to get an impression. You can also drive around to see how busy traffic is and the concern drivers have for pedestrians, property and one another.

Consider these two categories:

Destinations: Are the places you like to visit within walking distance? A no-cost ATM, grocery store, coffee shop, fitness gym, and park are things to consider.

Sidewalks: If there are no sidewalks, what takes their place? Is it level and safe to walk on? How easy is it to ride a tricycle, use a wheelchair, or push a stroller? Are there marked crossing areas for bicyclists and pedestrians, and how safe is it to cross the street?

Walkscore.com is an excellent online resource to help you find these answers.

Homes for Sale

When you see a lot of listing or foreclosure signs in a neighborhood, it might indicate more than financial problems. Look into the situation carefully to avoid buying a home in a troubled area.

Are you planning to move sometime soon? The idea of uprooting yourself and moving on is traumatic enough, but even more so would be the idea of moving into the wrong neighbourhood. That being the case, let’s have talk about some of the factors you should consider before making or even fully planning the move.

The School District

If you have children, or at least plan to have children, then this is probably going to be at the top of your list. You need to make sure you are looking at a decent school district, from funding, to the quality of the structures. There are some cases where the community fails to find the school, resulting in lower education and even outdated textbooks. If possible, investigate the school for each area that you are planning to move to!

The Economical Situation

What does the neighbourhood look like? Does it look like there is a lot of activity, or is the entire place boarded up? More importantly, what kind of activity are you seeing? Does it look productive, or does it look like you’re dealing with a breeding ground for gangs?

Another factor to consider is the likeliness of the economy to remain stable. Does it stay consistent throughout the year, or does it change with the seasons? The best way to find out is to walk or drive through the neighbourhood and even check the local newspaper. This can provide you with a wealth of information!

The Crime Rates

While we might try to ignore it, crime happens no matter where we live. It could be against you or it could be your property. There is always a chance of it happening, but how strong a chance? You may do well to check the statistics before you move in to ensure the safety of yourself and your family.

Amenities

To pass the time, there need to be a few things for you to do in your neighbourhood, these could include: Shopping, Movie Theatres, Restaurants, Clubs, Libraries, Parks, Etc...

If you really want to find out, search online, and most importantly use Walkscore. This is a website that will rate neighbourhoods based upon their amenities and how easy it is to walk to each one.

Commuting & Traffic

What is the traffic like? How easy will it be for you to get to and from work during rush hour? To get a feel for this you will want to go there early and actually try the commute. Once you do, you will need to ask yourself whether or not it is a trip you will actually want to take twice a day.

Character

If you want to get a good gauge of a neighbourhood’s character, see how it feels when you walk around. Does it feel safe? Welcoming? Unwelcoming? Busy? Before you move in, make sure you really belong here and that you truly want to be here for the foreseeable future!

It is both lovely and exciting to be searching for your first home or your dream home. Deciding to make an offer on a home can seem like a mysterious and intimidating process. And, while there can indeed be many ups and downs along the way, most agents follow a similar pattern. Never be afraid to ask for assistance and you can even ask your agent or attorney to walk you through an offer to purchase step by step so that you feel more comfortable about the entire procedure.

Making the first offer

You have found the home of your dreams. Before you submit your offer, first ensure that you have a loan which has been pre-approved and is already in place. This will just make the process smoother and quicker and most sellers require this before even looking at an offer. This will also be an indication to the seller that you are a person who is making a serious offer. Your attorney will draw up the proposed offer and present it to the seller.

The seller’s response

The seller normally has approximately 72 hours in which to respond to your offer. The response may come in the form of a counter offer, outright rejection or the acceptance of your offer. The reason for the time delay may be that there are other offers pending or waiting for a bond approval.

Negotiating the offer

Should the seller counter your offer with a higher one it usually indicates that the seller requires a higher purchase price for his property. It may also involve a time stipulation on behalf of the seller. The seller may for instance rather want a cash offer and not an offer which is reliant on a bond. Your attorney or the estate agent will do all the negotiating on your behalf. This can turn into a lengthy procedure and either party is free to walk away at any time.

The acceptance of your offer

Your offer has been accepted by the seller. Both parties will now sign a purchase contract which will be drawn up by your legal representative. Once you have signed this contract you are now legally bound to honour it and will need to place your deposit down for security.

Rejecting your offer

Many first offers end up being rejected. It can be a difficult and disappointing road to negotiate. You end up feeling demoralized at losing a home you had already set your heart on. Do not give up. Go back through the process with your agent and learn from it. Next time you will be more prepared.

The process of presenting an offer

The agent you have appointed to help you with this process will call the seller’s agent and check whether or not the seller is still open to offers and if there are any offers already pending.

The next step is for your agent to confirm that you have already been approved for a loan. A letter of pre approval from the institution offering you the loan will prove to the seller that you are a serious buyer. Should you need assistance with finding a home loan institution you need to ask your agent.

Your agent now needs to discuss with you a strategy regarding your offer. This is important, particularly if there are already other offers on board.

Next, your agent will have a letter drawn up for your signature which will be sent to the seller’s agent. The other party can take up to 8 hours or longer to respond to your offer.

Now the negotiating begins. Your attorney or agent will negotiate on your behalf with the seller and their agent and will eventually agree upon a deal which suits all parties concerned. This may take several rounds of discussion and counter offers. Once the acceptance is reached you will be in a stage called mutual acceptance. Should this not happen and your offer is rejected outright then you need to put it behind you and carry on with your search for your dream home.

As a home buyer, you will need to be prepared for rejection. The truth of the matter is that there are areas where homes are limited and a number of buyers are trying to buy the same property. There are some common reasons why a seller will reject a home and things you can do when you have had an offer rejected.

Why was my offer rejected?

When your agent gives you the bad news, this will be one of the first questions that you will likely ask. Because of that, why do offers often get rejected?

Lowballs: For this, the simplest answer, is that you gave the seller an offer that was well below what they are willing accept and if you are intentionally putting in low offers, you need to accept a high risk of rejection. While some sellers will bump you up and try to haggle a better cost, others won't even respond to you.

Bidding Wars: This is when a seller is getting bids from several people. A good agent is going to help you to devise a strategy to get the property with some techniques. Just keep in mind like any auction, you may be outbid.

Specific Terms: While your initial offer might have been okay, the seller will still have special conditions that they will need you to meet. They might want a shortened closing time or they may need to rent the home from you before they move out. If you are unable to meet their needs, you may lose your offer to a buyer who will agree to these terms, even if they offered slightly less.

Financing Issues: There may be a case where you find that even though you have been pre-approved for a loan, the seller of a home may have a preference they won't budge on. For that, you will need to avoid using FHA or even the VA. There may be a case of cash only buyers who won't be rejected for their loan at the last possible minute.

Seller Weirdness: For no reason whatsoever, you may have a weird person. They will have no logical reason for rejecting you, they will just reject you. Sometimes, they will give no reason at all, sometimes they don't you're your aura and other times you might have looked like someone they don't like.

Emotional Attachment: There are some sellers who don't have a good idea of what their home is worth. Sometimes, there is a buyer who offers a fair and supported sum of money and has the finances to back the offer and gives very reasonable terms. However, the seller still rejects it. This is often the result of an inflated sense of value in the home that results from emotional connection, rather than real world experience.

Agent Weirdness: A lot of trust is put into your agent, as part of their job. But what if they are tough, rude, condescending and law with everything or items are done wrong? In that case, the unprofessional can cause you to lose the without you ever having a chance.

What To Do (And Not Do) After a Rejection

Do speak with your agent. You will want to go over why the offer was rejected. Typically, the listing agent will tell you why the offer wasn't chosen. You can ask questions about the negotiation. If the agent speaks ill of the seller or other agent, they may be responsible for the blown deal.

Do not let your emotions get in the way. When you find out you didn't get a home, no matter how much you loved it, it isn't a personal decision against you. Most sellers won't reject you out of spite. Instead, they will make their decision on finances.

Do re-evaluate the strategy you are using. Perhaps you thought you could breeze through your negotiations and ask well below the list price and still get the home. You might have also misjudged the state of the market. You might even be overgeneralizing things, even in areas where home prices have fallen. A good agent will be able to look at the current situation and give you a realistic feel for the state of the market and they will let you know when they don't think your approach is wise.

Don't change your strategies for no reason. You can be a lowball buyer or have specific conditions to close the sale of a home. When you reevaluate your strategies, but don't abandon them just because things started off rocky. Sometimes buying a home takes a little longer than some people like.

Do keep looking. You shouldn't just throw in the towel. Sometimes, it can take months for you to find a home. While you want to stick to the 90 day window that a lender offers (some or more or less check with your lender) you need to be prepared for any setbacks that may happen.

Don't get desperate. If you have been rejected a number of times, you may end up just settling on any old home. That can be a mistake. Instead, think about the place you are looking at. You need to be happy living there for ten years or more. If not, will you really be glad that you settled into a place you didn't really like just to be done with it?

Do widen the options you are looking at. There is a chance that homes where you are looking at are more than you can afford. You might even find you are frequently outbid in the market as a result. You may even discover that the items you thought were essential aren't really all that important. Sometimes, it can help to reevaluate things in your buying efforts to be successful.

Do consider waiting it out. You will find that as homes are on the market longer, the seller will reconsider an offer. Just keep an eye on the listing and there is a chance you will have the home when you want it a few months later. You can even ask your agent to remind the seller about the initial offer if you like.

From the moment you decide to buy a home you think of what needs to be done. Making an offer on the home you want to buy and having the offer accepted is most of the battle in purchasing a home. Now the deal has to be closed to the satisfaction of the buyer and the seller. Here are important steps to take so everyone is happy in the agreement.

Seller Disclosure

Depending on state law where the home is located, the buyer may received a disclosure from the seller stating any known problems with the property. This helps identify things that might need maintenance at a later date, among other things. The disclosure usually arrives before the mutual acceptance takes place.

Mutual Acceptance

Once the seller and buyer agree on the price and terms as laid out in the Purchase and Sale agreement, the contract is signed by both parties indicating mutual acceptance.

Payment

Once both sides agree to the mutual acceptance, it is time to deposit the payment. This money is held by a neutral third party, which is usually the escrow company or an attorney. Again, it depends on the governing agency's laws. This helps the sale go through correctly.

Title

Often an attorney or title company will review the ownership history and check that the home’s title is intact. Easements, encroachments and liens are checked to determine their affect on the title. It is important to learn more about titles, reports, and insurance before the buying process.

Financing Process

Find a lender if you haven't already done so. A pre-approval letter is not a guarantee of financing, so get everything in order so that the loan will go through smoothly. Learn more about how to get a mortgage so that you can follow the process clearly.

Time to Sign

One of the most important part of the buying process is the signing meeting. It means the inspection has been complete satisfactorily, title review is approved, and you've qualified for mortgage. Just one step from owning your home, you'll be given a stack of documents to review, initial and sign.

Closing the Deal

Once the seller has access to the money, the documents are signed and the sale recorded with the proper government agency, the deal is considered closed. Now just pick up the keys, which are usually with your agent.

Purchase and Sales Agreement

Once there is mutual acceptance of an offer, the Purchase and Sale agreement is created. It has the final information regarding the sale, such as the price and purchase conditions. Specific requirements vary by state. Keep this document in a safe place in case you ever need to refer to the conditions again. The contract usually includes the following items.

Final Sale Price

The price often changes during negotiations before the closing date. It is important to always check that the final sale price on the purchase and sales agreement is the agreed upon amount.

Financial Details

The agreement will include information such as the money deposits and the dollar amounts of all expenditures. It also lists how the deposit will be made, including any personal deposits such as cashier checks within the first three days after the mutual acceptance. This check is held by a third party until the completion of the deal, as mentioned above.

Closing Date

This date marks the closing of the sale and purchase. Property transfer is recorded with the local government, while the seller gets the money from the sale. The buyer and seller will normally meet with their agent, attorney or title company to sign the documents a few days before the closing date. Sometimes an unexpected situation might arise where it takes an extra few days to close the sale.

Title Condition

The P&S includes an agreement that a marketable or clear title will be given to the buyer by the seller.

Title Insurance Company

The buyer has the right to select a title company. The buyer may have already selected one and the name of that Title Insurance Company will be included in the P&S document. If this presents a problem to you, discuss the matter with your attorney or agent.

What are Contingencies?

Contingencies are conditions that detail what needs to be done before the purchase is completed. Without compliance, either the seller or buyer can cancel the proposed sale. It is important to know about and make sure all contingencies in the contract are met. Below are some examples of the common contingencies that might be present. Check with your agent or attorney if you have any questions.

The Inspection Contingency gives the buyer the right to have the home inspected prior to purchase. If there are any problems present in the home, the buyer can renegotiate any deals with the seller. The seller might want to repair any problems or offer a credit as compensation for the difficulty. If there is a serious problem, the buyer can back out of the purchase without losing the earnest money deposit previously posted.

The Financing Contingency requires that the buyer has to get approved for a mortgage before the purchase is completed. If the buyer is unable to get approved, but can show a good faith attempt, it is sometimes possible to back out of the deal.

A Title Contingency provides a title review for the buyer so any situations affecting clear title can be reviewed, such as conflicting claims of ownership. If there is a serious problem, the buyer can back out of the deal.

The Appraisal Contingency gives the buyer an opportunity to cancel the purchase when the appraisal shows the house is worth less than what was requested in the mortgage.

The Home Sale Contingency is less common than other contingencies. It provides that the buyer can back out of the deal if the home currently owned cannot be sold.

If you’ve made the decision to use a real estate lawyer, then your first priority will be to actually find one who is experienced in this particular field, and preferably one with a solid reputation. Below are a places where you could consider looking:

- Your real estate agent or broker

- Recommendations from friends and/or family

- Online records of lawyers in any number of companies

- Title or Escrow company

CAUTION: Think carefully before following up on a recommendation from your lender.

Lenders are often able to recommend a real estate lawyer but you should think twice about following through with such a recommendation. The reason for this being that you might run into problems if you decide to change lawyers at a later date.

Important Questions To Ask A Lawyer

Before you enter into any type of agreement with a lawyer, there a few questions which you really do need to ask:

1) Do You Specialize In Real Estate?

This might seem like an unnecessary question, but you need to be sure your chosen lawyer is a specialist in the field. You should ask how many transactions they process every year, and how many purchases have they actually helped with.

2) Have You Worked On A Similar Case?

A lawyer might have plenty of experience with big and complex transactions, but that doesn’t automatically mean they have experience with less common cases such as bank owned homes and etc. In short, if you pending transaction falls into a niche category, you need to determine if your lawyer is familiar with that particular niche.

3) What Are Your Fees And How Are They Calculated?

You need to know whether your lawyer charges a flat rate or an hourly rate. In the vast majority of cases, a flat rate is best. When fees are calculated on the basis of an hourly rate you are leaving yourself wide open to inflated costs. Also, complicated transactions can take far longer than you or your lawyer ever thought possible.

4) Can You Refer Me To Past Clients?

Ask the lawyer at least 4 or 5 referrals so that you can contact them to inquire about the sort of service they received. When you do contact them, ask them a few questions such as:

- What type of transaction did the lawyer handle for you?

- Do you believe you got good value for your money?

- Were you completely satisfied with the work they did?

- Did the lawyer come across as being very efficient?

- Would you ever personally recommend this lawyer to one of your friends?

Another name for settlement is closing, the final act before a home is officially sold. It is a very busy time. Money from the sale is given to the seller. The property is transferred to the buyer. Closing costs are paid and any remaining contracts are signed. With few exceptions, the keys are given to the buyer.

Closing date tasks for the buyer

This is an important event in your life, so have everything in order before the closing date. The funds for closing costs and the down payment should be ready for deposit before the closing, preferably as a cashier's check or as a confirmed wire transfer. Review the paperwork on closing day to be sure everything is in order. Initial or sign where required. In return, the keys are presented to you.

Getting the keys to the home

A signing appointment is scheduled in some parts of the country. The buyer signs the paperwork several days prior to the closing date. Those papers are sent in for recording with the local government, such as the County Recorder, which is generally done within 2 or 3 business days. Confirmation of receipt of money from the sale should be provided by the seller. As with other locations, the keys are given to the buyer on the closing date.

Can I move in once I have the keys?

Usually the buyer can move in to the home once they have possession of the keys. Exceptions usually have to do with arrangements made with the seller. Sometimes it is inconvenient to move for a few days to several weeks, such as when school is still in session. Those contingencies are part of the sales contract, and may result in the seller paying rent for the time he remains in the home.

Just because you’re buying brand-new, doesn’t mean you should skip the home inspection. Although new construction homes won’t have the same wear and tear of resale properties, it’s still important to have a certified home inspector check your property to ensure it’s free from defects. Builders are often on tight deadlines, so it’s possible that something could get missed. It’s a lot better to have a home inspector find an issue and remedy it now before you’ve moved in, rather than after you’ve occupied your new home.

What is a Home Inspection?

A home inspector should take about two to three hours. Condo inspections typically take less time than house inspections, as there’s less square footage to cover. Home inspectors are free to charge what they like, although home inspections usually cost about $500. What your inspector checks depends on the type of home you’re buying. For example, if you’re buying a house, an inspector should check to ensure the roof has been installed properly, the home is energy efficient and the windows are sealed property. Unlike a resale home an inspector won’t need to worry about outdated wiring and asbestos, although he should keep his eyes open for defective materials.

Although a condo is usually a lot smaller than a house, it’s still important to get an inspection done. Since your condo fees cover major expenses like the roof, an inspection should check your condo unit to make sure it’s free and clear of any issues. An inspector should look at the heating and plumbing to ensure they were installed properly. When looking for an inspector, it’s a good idea to find an inspector who specializes in condos, as they are a lot different than houses.

Certification

Home inspectors play a pivotal role in the home-buying process, so you’d think they would be regulated by the government. Unfortunately, when it comes to home inspectors it’s buyer beware in most provinces. Besides B.C. and Alberta, home inspectors are mostly unregulated in other provinces.

Since almost anyone open a business tomorrow and say they are a home inspector, it’s important to check the credentials of home inspectors. Find out if your home inspector is a member of the Canadian Association of Housing and Property Inspectors (CAHPI), Certified Home Inspector, National Certificate, Holder or Registered Home Inspector. Be sure to check on each associate’s website to see if the inspector really is certified; don’t’ just take their word for it. Some inspectors may claim they aren’t certified due to the expense, so you’ll have to use your own judgment.

Experience

A home inspector that misses costly repairs and upgrades like knob and tube wiring or a leaky roof can cost you thousands of dollars in repair. You’ll want to make sure you choose an inspector who is experienced and know what he’s talking about. The ideal home inspector will be experienced in the trades, as a builder, or as a city inspector. It’s also helpful if they have a background in engineering.

Purchasing a home is most likely the single largest financial transaction of your lifetime. Real estate contracts can go by many names; for example, it’s known as the Agreement of Purchase and Sale in Ontario. Contracts are quite often over 20 pages long and written in legal jargon. Unless you’re well versed in legalese, it’s a good idea to have your real estate lawyer review it before signing on the dotted line.

A real estate contract is slightly different when buying new versus resale. When buying resale you usually sign a standard contract. However, when buying new, the contract is written by the builder; it should come as no surprise that many of the clauses favour the builder. Let’s take a look at some important clauses to keep an eye out for in your contract and how you can protect yourself.

Unconditional Offers

You should never sign a clean offer without having your real estate lawyer review it first. Signing an unconditional offer means you’re largely at the mercy of the builder. It’s not unheard of for the final selling price to be several thousand dollars higher than the base price due to closing adjustments. Protect yourself and let your lawyer review it ahead of time.

Tarion Home Warranty Protection

Tarion is a warranty program that assists buyers of new homes in Ontario. If you run into any problems with your new home, Tarion is supposed to be there to lend you a helping hand. It’s important to find out who is responsible for footing the bill – quite often builders pass the cost onto buyers. While there isn’t much you can do about it, at least you’ll be able to budget for it.

Additional Charges

When buying a new construction home, there are charges on top of the closing costs you’d pay with a resale home. Additional charges include development charges, levies, and connections for gas, hydro, and water, and can add up to thousands of dollars. A good real estate lawyer should ask your builder to cap these charges to protect your pocketbook.

Get It In Writing

The salesperson may promise you a discount on upgrades, but unless it’s in writing and included in the contract it’s not binding. Even if it’s in the sales brochure, it’s not considered binding if it’s left out of the final signed contract.

Floor Plan

Although floor plans can always change and aren’t written in stone, it’s important to have your new home’s floor plan included as a schedule with your offer. If your new condo ends up being 150 square feet smaller than it should be, at least you’ll have the measurements to back it up in a dispute to perhaps negotiate a reduction in price.

Square Footage

Measurements can be deceiving. When builders provide the square footage of your house or condo, it’s the measurements of the exterior of new home, not the interior. Although your builder can reduce the square footage of your condo by up to two per cent, it’s a good idea to get a minimum size in writing to avoid unpleasant surprises.

Have you ever purchased a new sweater from the department store you thought looked great, only to change and your mind and return it the very next day? That’s buyer’s remorse. When you buy something from the mall, as long as you have your receipt it should be relatively easy to return. When you purchase a new home, it’s not always so easy.

Although there’s a 10-day cooling off period for new home buyers to change their mind, once the 10 days are up and all conditions have been satisfied, you could lose your deposit and possibly get sued if you back out of the deal. Here are some ways to avoid buyer’s remorse and avoid second guessing yourself in the first place.

Do Your Homework

A home is a lot more than a structure – it’s a place to raise your family. Before you sign on the dotted line, it’s important to do some research about the neighbourhood. There’s a good reason why the three most important rules in real estate are location, location, location. While you can improve the look and feel of your home, location is one thing you have very little control over. You’ll want to do some careful research ahead of time to make sure where you’d like to purchase is an ideal place to raise a family.

Get a Second Opinion

If you’ve ever watched real estate shows like Property Virgins and Income Property, you’ll notice that homebuyers rarely look at properties alone. Sometimes it’s good to have a second pair of eyes alongside your own. It’s easy to be mesmerized by a property and ignore its shortcomings – a friend or family member can help keep you grounded by pointing out any potential pitfalls.

House Poor

Just because your lender says you can buy a $550,000 home, doesn’t mean you should. One of the biggest mistakes homebuyers make is overextending their finances on a home. The last thing you want to do is be a slave to your mortgage. It’s important to have some savings in case life happens and you lose your job or become ill. You’ll be glad you have a financial cushion to protect you.

Get Your Team in Place

Real estate isn’t a solo effort – it’s a team sport. Three key players in the home-buying process are your real estate agent, lawyer and home inspector. Your real estate agent will help translate your needs and wants into actual properties to find your dream home. Your real estate lawyer will review your offer and ensure the deal is in your best financial and legal interest. Finally, a home inspector will check your new home to make sure it’s in good shape and everything is to up to code. Receiving a passing home inspection will seal the deal for a lot of buyers and help assure you you’ve made the right decision.

Condos are an attractive option for homeowners looking to avoid the upkeep and expenses that come with owning a house. Once you’ve decided to buy a condo, your next big decision is new versus resale. When it comes to new and resale condos, there are a lot more differences than simply the purchase price – although you can customize the look and feel of a new condo, they often come with a higher upfront cost. Here’s what you need to know when purchasing a new condo to avoid being caught off guard.

Closing Costs: Your closing costs are usually pretty straightforward when you’re buying a resale condo. You’ll need to budget for your down payment, plus your other closing costs, such as your home inspection, real estate lawyer fees, and land transfer tax. When your buy a new condo, not only do you need to pay those expenses, but there are additional expenses you may owe, including development and education charges, and installation of water, hydro, and gas meters. If you have a car, you’ll also have to budget for parking. All these expenses can add up to thousands of dollars extra.

Deposit and Down Payment: With a minimum five per cent down payment, resale condos offer a more affordable option for homeowners. With resale it’s simple – you put make deposit at the time of offer and your down payment on closing. With new condos it can be a lot more expensive – some condos require as much as a 25 per cent down payment. If you’re buying a new condo for $400,000, you could have to come up with $100,000 yourself. Although you won’t have to come up with the money all upfront, builders will spread your deposit over a number of days, typically leaving 10 per cent owing on closing.

Completion: With resale condos you know exactly when you’re moving in – the typically closing is between 30 and 90 days. With new condos your move-in date may be known in advance, but can always change with adequate notice from your builder due to delays in construction and permits. Typically occupation starts from the lower to top floors – once you’re moved in you’ll have to paying “phantom rent” for your condo until it’s registered, which usually takes three to six months.

Customization: A big advantage of buying new is that you can customize the look and feel of your condo. There are plenty of upgrades you can choose from, including hardwood floor, granite countertops, and backsplashes. Typically you start with some basic upgrades – if you’re like further upgrades you’ll have to pay out of pocket. If you’re not happy with the basic unit, it’s important to budget for upgrades, as the cost can quickly add up.

10-Day Cooling Off Period: An advantage of buying a new condo is that if you change your mind within 10 days of signing your contract you can back out of the deal. For example, if you find a better condo or lose your job you can still change your mind. It’s a good idea to have your real estate lawyer review the builder’s contract to make sure it doesn’t have any hidden clauses that may not be in your best interest.

Similar to resale homes, new homes have closing costs, too. Whether you’re purchasing a new condo, house, or townhouse, it’s important to budget for closing costs. Closing costs are not just a drop a drop in the bucket, they represent a major cash expenditure – they can add up to anywhere between 1.5% and 4% of your home’s purchase price.

When you’re buying a new home you’ll still have to pay your standard closing costs – home inspection, land transfer tax, and real estate lawyer fees – as well as some additional closing costs unique to new homes. Let’s take a look at some closing costs new homebuyers face.

Estoppel Certificate Fee – If you’re purchase a condo, it’s very important to obtain an Estoppel Certificate. For a fee of $100, this certificate will outline the amount of condo fees you’ll pay, how often, if there are any fees in arrear, and if the current owner is in default.

Pre-Delivery Inspection (PDI) Fees – When you buy a new home, you have to do a walkthrough with the builder known as the PDI. The fee for the PDI can typically range from $250 to $500. Generally, the greater the square footage of your home, the higher fees will be.

HST/PST – A major expense for homebuyers of new homes is HST (Harmonized Sales Tax) and PST (Provincial Sales Tax) (when you purchase resale you don’t have to pay HST/PST). Whether you pay HST or PST depends on the province in which you reside; for example, in Ontario you’ll pay HST. HST/PST is usually included in the base selling price, but it’s still a good idea to confirm this with the builder. You may be eligible for a rebate depending on where you live; speak to your real estate lawyer for more information.

Tarion New Home Warranty Program – When you purchase a new home in Ontario, you must enroll in the Tarion New Home Warranty Program. This program offer protection for buyers from a variety of issues that can arise in new homes. Although the builder is supposed to pay this fee, it usually passed onto buyers. It’s important to ask your builder if the fees are including in the base selling price. Depending on the selling price of your home, fees typically start at $600 and higher.

Utility Connection and Installation – In order to have heat, hydro, and water, you’ll need to pay for utility connection and installation fees. You may also have to pay a water meter charge.

Development and Education Levies – Levies represent a major expense for buyers of new homes; they can often add up to thousands of dollars. The cost of levies depends on the municipality where you’re buying. Levies cover the cost of services required for new communities, such as schools and hospitals.

While it’s easy to get caught up in the excitement of buying a new home, there are many mistakes homebuyers can make along the way if they aren’t careful. From forgetting about closing costs (which can amount to thousands of dollars) to becoming house poor, buying a home can be complicated to say the least, so it’s important to do your homework beforehand so you’re well-prepared. Let’s look at some of the biggest mistakes homeowners can make, so hopefully you can avoid them yourself.

Location, Location, Location

You’ve probably heard it before – the three most important rules in purchasing real estate are location, location, location. Purchasing a new home, while ignoring your surroundings, is a big mistake. Often when you’re purchasing new, there will be plenty of space for development in your surroundings. You don’t want to find out a new condo building is going up right in front of you that will block your picturesque view after the fact. Although you can ask the builder about future developments, you should get your real estate agent and lawyer to do some digging to see if there are any new developments in the works that could help or hinder the value of your property.

Becoming House Poor

For most families their mortgage represents their most costly monthly expense. Just because a lender says you can purchase a home for $600,000, doesn’t mean you should go out and buy a home at the very top of your housing budget. Before pre-approving you for a mortgage, lenders look at your ability to carry mortgage debt. The two most common measures are the Gross Debt Service Ratio (GDS) and the Total Debt Service Ratio (TDS). Although it may be challenging to find a new home in your budget with a GDS of 32 per cent and a TDS of 40 per cent in expensive cities like Toronto and Vancouver, exceeding these ratios by too much can lead to being house poor. Being house poor means you’re a slave to your mortgage – your mortgage expenses eat up so much of your take-home pay that you’ll have very little left over to enjoy the finer things in life, let alone pay your other bills.

Forgetting About Closing Costs

A common mistake by first-time homebuyers is to forget to budget for closing costs. Closings costs can amount to thousands of dollars, so it’s important that you put some money aside in advance. Closing costs typically amount to between 1.5 per cent and 4 per cent of the purchase price of your new home. For example, if you’re purchasing a new condo for $350,000, your closing costs could add up to as much as $14,000 – still sound like pocket change? Closing costs cover expenses such as your home inspection, land transfer tax, real estate lawyer fees, and deposit. By not budgeting for closing costs you might have to borrow money or worse, walk away and lose your deposit.

Not Shopping the Market

While it’s easy to fall in love with the first property you see, not taking the time to shop the market can lead to overpaying for a home when there are better options out there. One of the advantages of buying new is that, although there is a limited supply of homes, you don’t have to deal with the frenzy of a bidding war. Buyers are typically in the driver’s seat and can take the time to shop the market to see what else is out there. A home is a long-term investment, so you should see at the very least two or three more properties before you make your final decision.

Although the negotiations are a bit different when buying new construction over resale, there’s still some room for negotiation. When you’re buying new, all you have to rely on is the show room and the floor plans – unfortunately, what you see isn’t always what you get. Although there usually isn’t much room for negotiation on price, you can still negotiate with builders on upgrades.

Upgrades

Unlike resale there is usually no room for negotiation on the base selling price. However, there is room for negotiation when it comes to upgrades. When you’re looking at new homes, it’s easy to be wowed by the show home. If you’d like some of the same upgrades in your home, there should be some room for negotiation. Builders make most of their profit on upgrades, so there should be some wiggle room when it comes to upgrade costs. The more you spend on upgrades, the bigger of a discount your builder should offer.

Get It In Writing

When you’re buying brand-new, you’re usually relying on sales brochure or an artist’s rendition to see what your finished home will look like. Unfortunately, a lot of buyers are disappointed and feel deceived when they finally move in and discover their home isn’t as glorious as they thought it would be. Don’t just take the salesperson’s word for it – be sure to get everything in writing. Buyers are often surprised when their home is a lot smaller than first promised – at least if you have it in writing, you might have a leg to stand on in a dispute.

Needs and Wants

Unless you’re exceedingly wealthy, you probably won’t be able to afford to get every upgrade available. That’s why it’s important to review the upgrades and create a list of needs and wants that fall within your budget. While it would be nice to have hardwood floors throughout the main floor, maybe you can settle for just the living room and choose less costly laminate in the bedrooms. By picking and choosing the upgrades that add the highest resale value to your home and that you’ll enjoy, you’re more likely to avoid being disappointed.

Don’t Reveal Too Much

Similar to buying resale, it’s important not to reveal too much personal information to the builder. For example, if you’ve been approved for a maximum purchase price of $650,000, don’t blurt it out to the builder. The builder may try to upsell you on a more expensive unit or be less willing to negotiate on upgrades. If you’ve ever dealt with a lawyer, you’ll know the importance of keeping as much information personal as possible.

The Builder

Do some research and try to find out as much as you can about the builder. Although there usually isn’t any room for negotiation on base price, the builder may be willing to lower the price if there are only a few less desirable units left. It’s also important to find out about the reputation of the builder; if the builder has received a lot of complaints, you should probably stay clear.

If you’ve been a renter your entire life, it can be a tough road to homeownership, especially if you’re not adequately prepared. Home affordability has been a popular topic in the media – as home prices continue to skyrocket, buyers are forced to purchase homes at the very top of their housing budget. Although your purchase price is important when you buy a home, other expenses like your closing costs and carrying expense matter just as much. The last thing you want to do is overspend and end up “house poor.”

Mortgage Payments

As mentioned, when you’re house hunting it’s a good idea to get pre-approved for a mortgage. Not only does a pre-approval give you a rate hold, it also helps you determine what your mortgage payments will be. If the letter from your lender doesn’t include your mortgage payment, you can easily calculate it online with the mortgage payment calculator on RateHub.ca. Simply enter your purchase price, the amount of your down payment, and the mortgage rate and you’ll know exactly how much your mortgage payment will be – it’s that easy!

Household Expenses

Owning a home is a lot more than simply paying your mortgage. There is a host of bills you’ll be responsible for paying, including heat, electricity, water and property taxes. While some bills will be monthly, others will be less frequently. It’s important to stay on top of your bills if you don’t want your electricity turned off. If you choose direct deposit, be sure to have sufficient funds in your chequing account to ensure you don’t accidentally go overdraft.

If you’re buying a condo, be sure to ask about condo fees. Condo fees are a major expense for condo owners. Condo fees typically cover utilities, amenities and repairs to common areas. What’s included in condo fees often vary from building to building (for example, some building include cable, while others don’t), so be sure to find out how much your condo fees are and what they include.

Household Debt

When you apply for a mortgage, household debt is an important factor with lenders. If you have a lot of consumer debt, not only can it hurt your credit score, it can also make it difficult to meet your monthly mortgage payments. For example, if you owe credit debt at over 20 per cent, it probably makes sense to pay down your debt before taking on a mortgage. If you have your debt under control, be sure to include your other debt such as car loans and student debt in your budget to ensure you can continue to pay them and carry your home.

Closing Costs

A lot of first-time homebuyers forget to budget for closing costs. Contrary to popular belief, your lender will not cover your closing costs; it’s your responsibility to budget and pay for them. Closing costs typically amount to between 1.5 per cent and 4 per cent of your purchase price and include expenses such as a home inspection, land transfer tax, and real estate lawyer fees. Instead of buying a home at the very top of your housing budget, put some money aside for closing costs.

With home prices skyrocketing in many markets across the country, saving for a down payment is more difficult than ever. With some cities like Toronto seeing double-digit price increases, you can quickly find yourself priced out of the market if your savings don’t keep up.

When you’re living out on your own and paying rent, student debt, and a car loan, it can seem next to impossible to save towards a down payment. As you’ll soon learn saving a little can go a long way. Although you’ll need a down payment of 20 per cent to avoid mortgage insurance, you can make a down payment of as little as five per cent. Here are some tips to help you reach your down payment sooner.

Home Buyers' Plan (HBP)

One of the biggest hurdles going from a renter to a homeowner is saving towards your down payment. Even saving a down payment of five per cent can be tough, especially when you have a family to support. To help make saving towards a home easier, the government introduced the Home Buyers’ Plan. Under the HBP, first-time homebuyers can withdraw up to $25,000 from your RRSP to buy a qualifying home. With the HBP plan saving towards a down payment is a lot easier – you’re able to invest pre-tax dollars inside your RRSP that grow tax-free. When you’re ready to purchase your home, you’re able to withdraw the funds tax-free. As long as you manage to pay back the withdrawals to your RRSP within 15 years it won’t be added to your income.

Pay Yourself First

The easiest way to avoid an empty bank account at the end of the month is to pay yourself first. Paying yourself first is easy and painless. Lenders like ING Direct offer automatic savings plan where you can choose a set amount of money that is automatically deposited into your savings account. Your employer may also allow you to have a portion of your pay deposited into your savings account, your RRSP or a TFSA. As your savings grows, you’ll be that much closer to reaching your goal of homeownership.

Pay in Cash

Today spending is quick and painless. With Mastercard PayPass, with a simple tap of your credit card you can spend $50 or more in an instant. While it’s convenient, it’s also an easy way to let your spending get out of control. If you have a problem overspending and managing debt, try paying for purchases in cash instead of credit. Give yourself an “allowance” each week – once the money is all gone, that’s it for purchases. That way you can meet all your regular expenses without dipping into your down payment savings.

Home Buyers’ Amount

First-time homebuyers can claim the home buyers’ amount of $5,000 towards the purchase of a qualifying home. This non-refundable tax credit is worth up to $750 and can be claimed on line 369 of your income tax return. The definition of a qualifying home is pretty broad – it includes single-family houses, semi-detached houses, townhouses, condos, apartments and even mobile homes (it also includes new construction). You’re considered a first-time homebuyer if you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years.

Finding your dream home is only half the battle – unless you’re wealthy and can afford to pay for your home in cash, you’ll also need a mortgage. The days of buyers only visiting their local bank for a mortgage rate are numbered – today more buyers than ever are shopping the market for the best mortgage product. Saving even 0.10 per cent on your mortgage can mean saving thousands of dollars in interest over the life of your mortgage.

While your local bank is a good starting place, it shouldn’t be your only stop. You should take the time to visit other banks and meet with a mortgage broker to see if you’re really getting the best rate. Here are our tips to find the best banker or broker.

Referrals

Similar to finding a real estate agent, referrals are a great place to start for bankers and brokers. Be sure to ask family, friends, coworkers and even professionals if they know of any bankers or brokers. It’s important to find a banker or broker you’re comfortable with, as you’ll want the mortgage product that best suits your financial needs.

Banks and brokers quite often offer a lot of ancillary services besides simply searching for a mortgage rate. From all-in-one mortgages to cashback mortgages, there are hundreds of products out there. A banker or broker can help narrow the field to the products that are right for you. They can educate you about mortgages and provide helpful advice on paying down your mortgage faster.

The World Wide Web

Buying a home is a busy time – it can be especially challenging when you’re buying and selling at the same time to find time to book appointments with lenders. Today you can save time by shopping the mortgage market from the comfort of home. Mortgage rate websites make shopping for the lowest mortgage rate a breeze – you can secure the lowest mortgage rate even while you’re in your pajamas! You can find rates from banks, as well as secondary lenders like credit unions that you probably would have never thought of. With a few clicks of the mouse you can be pre-approved for a mortgage in no time with a rate-hold of up to 120 days, which will protect you if mortgages rates go up.

Your Local Bank

There are still some benefits of shopping for a mortgage at your local bank. If you’ve found a better deal elsewhere, your bank may be willing to match it to keep you as a customer. If they aren’t able to match, they may be willing to throw in perks like a free chequing account. Be sure to bring a copy of your pre-approval from another lender with, as your banker may need approval from their manager before they can offer you a matching or lower rate.

Buying a home is most likely the single biggest financial transaction of your lifetime, so it’s crucial that you find an experienced real estate lawyer who will help you along the way. When you’re purchasing new construction, you’ll have to sign a contract from the builder to finalize the deal. The contract is often many pages long and full of legal jargon impossible for the average person to understand. It’s a good idea to have a real estate lawyer experienced in new constructions to review your contract to make sure it’s in your best interest. Now that we’ve convinced you of the importance of lawyers, here are some tips to choose the best real estate lawyer on your next deal.

Start Early

Whether you’re buying or selling, it all comes down to timing. You shouldn’t wait until the last moment to get pre-approved for a mortgage, and you shouldn’t wait until you’re ready to sign an offer to find a real estate layer. Once you’ve decided to purchase a home, start searching for a real estate lawyer. Time flies once you’ve purchased a home – it will be one less thing to worry about. Websites let you search for real estate lawyers in your neighbourhood from the comfort of your home.

Get it in Writing

When you’re phoning around for estimates, it’s important to get your quote in writing. A real estate lawyer who offers lower fees may make up the difference through hidden costs. If the fees are a lot different from your original estimate and you have it in writing, you’ll at least have a leg to stand on in a dispute, otherwise it’s just your word against your lawyer’s.

Referrals

If you know someone who has recently bought or sold a home, asking them for a referral on real estate lawyers is a good place to start. Choosing the right real estate lawyer is more than just choosing the lawyer with the lowest fees – you want a lawyer who is easy to reach, organized, and does their job. Be sure to ask family, friends, coworkers and professionals for referrals. Ask them how the home-buying process went and if they would use the same real estate lawyer again.

Experienced

There are all sorts of lawyers out there – criminal, immigration and real estate lawyers to name a few. A real estate deal is a lot different than criminal case in front of a judge, so you’ll want a lawyer who knows all the in’s and out’s of real estate deals. Today most lawyers specialize in their area of expertise, so you should have no problem finding a real estate lawyer. Buying new construction is a lot different than resale, so be sure to ask about a lawyer’s experience in newly-constructed homes.

The Selection Process

It’s a good idea to interview at least three real estate lawyers before you make your final decision. If a lawyer can’t explain their services to you in a straightforward manner during the interview, chances are they aren’t the right lawyer for you. Your lawyer should make your home-buying experience easier, not more stressful. By taking the time, you can find the lawyer who’s the right fit for you.

Just because you’re buying a newly-constructed home, doesn’t mean you can skip the home inspection. It’s still a good idea to get a home inspection on a new property. Although there are standards your builder must follow, it’s always possible things can go wrong – it’s easier to fix them with the builder (and perhaps negotiate a price reduction) before your closing date. Things such as the heating and wiring should be checked by an experienced inspector. A new townhouse is a lot different than a new condo, so you should find an inspector who specializes in the type of property you’re buying.

Start Early

It’s a good idea to get pre-approved for a mortgage before you start house hunting; it’s also wise decision to choose a home inspection early as well. Although you don’t have to deal with multiple offers when you’re buying a new home, it’s still important to have a home inspector in place ahead of time. Once you’re found your dream home, be sure to give your home inspector as much notice as possible. Inspectors often have tight schedules to meet, so the more notice you give your inspector the better. Be sure to choose at least two home inspectors – you’ll be glad you have a backup in case your first choice is unavailable when you need him the most.

Referrals

If you’re looking for a home inspector, a great place to start is with the people you trust most. Family, friends, coworkers and professionals are a great source for home inspectors. They can give you their honest opinion about the services provided and most importantly, whether they would use a home inspector again. The inspector who charges the lowest fees might not necessarily be the best inspector, so it’s good to get a second opinion.

Certification

Home inspectors play a pivotal role in the home-buying process, so you’d think they would be regulated by the government. Unfortunately, when it comes to home inspectors it’s buyer beware in most provinces. Besides B.C. and Alberta, home inspectors are mostly unregulated in other provinces.

Since almost anyone open a business tomorrow and say they are a home inspector, it’s important to check the credentials of home inspectors. Find out if your home inspector is a member of the Canadian Association of Housing and Property Inspectors (CAHPI), Certified Home Inspector, National Certificate, Holder or Registered Home Inspector. Be sure to check on each associate’s website to see if the inspector really is certified; don’t’ just take their word for it. Some inspectors may claim they aren’t certified due to the expense, so you’ll have to use your own judgment.

Experience

A home inspector that misses costly repairs and upgrades like knob and tube wiring or a leaky roof can cost you thousands of dollars in repair. You’ll want to make sure you choose an inspector who is experienced and know what he’s talking about. The ideal home inspector will be experienced in the trades, as a builder, or as a city inspector. It’s also helpful if they have a background in engineering.

Your credit score matters a great deal to lenders when you’re in the market to buy a home. An excellent credit score can mean the difference between paying a low mortgage rate and being forced to seek out a mortgage at a higher rate with secondary lenders.

While your income and down payment help determine the size of mortgage you qualify for, your credit score helps determine the interest rate you’ll pay. A mortgage is most likely the largest debt of your lifetime, so lenders want to make sure you have a track record of paying off debt. A good credit score tells the lender you’re a trustworthy borrower and are less likely to default.

What is considered a Good Credit Score?

Credit scores for individuals typically range from 400 to as high as 900. While a credit score between 600 and 749 is considered good, a credit score of 750 or higher is considered excellent. If you have a credit score above 700, you should have no problem getting a mortgage from a primary lender at a lower mortgage rate.

How Can I Get a High Credit Score?

Not only does a high credit score give you bragging rights at a cocktail party, it can also save you thousands in interest over the life of your mortgage. For those who don’t have high credit scores, although there’s no quick fix, there are still things you can do to improve your credit score.

1. Review Your Credit Report

It’s generally recommended that you review your credit report once a year. Requesting your credit report is easy and won’t cost you a dime – Canadians are entitled to a free credit report once a year from Equifax and TransUnion. Once you receive your credit report, carefully review it for any errors. If there are any errors, be sure to report them right away to help improve your credit score.

2. Pay Your Bills on Time

One of the easiest ways to lower your credit score is to constantly pay your bills late. Even a bill just a couple days late will cause a hit to your credit score. Those who constantly pay their bills on time will be rewarded with a higher credit score.

3. Reduce Consumer Debt

How much credit you have at your disposal is another factor that can affect your credit score. For example, if you have an unsecured line of credit for $20,000, even if you only have a balance of $1,000, it can still cause your credit score to fall since you have so much money at your disposal. Next time your credit card company sends you an offer in the mail to increase your credit card limit, just say no.

4. Don’t Open New Accounts

If you’re trying to improve your credit score, obtaining a new credit card is the last thing you should do. Instead you should focus on paying off credit cards you’ve had for a long time to maintain a decent credit history.

You’ve found your dream home and you’d like to make an offer – the only thing that separates you from homeownership is the offer to purchase. Simply put, an offer to purchase is a legal document that spells out the buyer’s intent to purchase a property from the seller. So what exactly is an offer to purchase and why does it matter? Let’s find out.

What is the Offer to Purchase?

As mentioned, the offer to purchase is a legal, written document spelling out the buyer’s interest to purchase a property. Along with the offer to purchase, the buyer must include a deposit, usually in the form of a certified cheque. The deposit assures the seller your offer is serious and in good faith. Unless the seller fails to meet any of the conditions included in the offer, they will be entitled to keep your deposit as damages. If your conditions are met, your deposit is applied towards your down payment and the purchase price of your new property.

Firm Offer vs. Conditional Offer

There are two types of offers: firm offers and conditional offers. A firm offer is an offer free from any conditions – once the seller accepts the deal, there’s no backing out. In a seller’s market, a seller will often choose a firm offer free from conditions with a slightly lower offer price over an offer with conditions and a slightly higher offer price.

A conditional offer is prepared by the buyer and it includes conditions that allow the buyer to get out of the deal. The most common two conditions are home inspection and financing, although you can include a condition for almost anything. If the conditions are not met by the seller, you can abandon the deal; although the seller can hold up your deposit should they not agree (although they cannot list their property again until your deposit is returned).

What is included in an Offer to Purchase?

Once you’ve found a home you’d like to put in an offer, it’s time to prepare the offer to purchase. Your real estate agent will help you complete the legal documents and fill in the blanks using a standard form. If you have time, it’s also a good idea to have your real estate lawyer review your offer to purchase before it’s submitted to the seller. Here are some important things you should include in the offer to purchase:

- Basic information: The name and address of the buyer and seller, along the property for sale

- Chattels: Generally anything that’s not nailed down. The most common chattels are appliances.

- Offer Price: The price you would like to purchase the property for. Your agent should help you determine a fair offer price based on comparable properties. In a multiple offer situation, typically it’s a good idea to submit your best offer first.

- Closing Date: Your preferred date you’d like to move into the property. The seller should include details on their preferred closing date. Closing dates typically range from 30 to 90 days.

- Conditions: As discussed, the buyer can include conditions, such as condition of financing or home inspection that must be met before the offer is firm.

- Expiration Date: The date and time the deal expires if the seller does not respond.

What’s next?

There are three possible outcomes: your offer will either be accepted, rejected or the seller will sign back a counter-offer. If you get a counter-offer and you’re close on price, you can often go back and forth once or twice before your offer is accepted. Once your offer is accepted, the agreement of purchase and sale is prepared and signed by the buyer and seller. Congratulations, you’re now officially a homeowner!

If you work long hours and you’re looking for a low maintenance property, a condo may be your property of choice. New condos offer a major advantage over resale – you can customize the look and feel of your condo right down the backsplash. When you’re buying a new condo, the financing a slightly different than a resale condo – not only do new condos usually require a down payment of 25 per cent, most builders require scheduled payments of your deposit over several months. Here’s what you need to know about financing when you’re buying a pre-construction condo.

Deposit and Down Payment: With a minimum five per cent down payment, resale condos offer a more affordable option for homeowners. With resale it’s simple – you put make deposit at the time of offer and your down payment on closing. With new condos it can be a lot more expensive – some condos require as much as a 25 per cent down payment. If you’re buying a new condo for $400,000, you could have to come up with $100,000 yourself. Although you won’t have to come up with the money all upfront, builders will spread your deposit over a number of days, typically leaving 10 per cent owing on closing.

Cooling Off Period: Have you ever suffered from buyer’s remorse? One advantage of buying a new condo is that it comes with a cooling off period. The cooling off period varies depending on the province in which you reside; for example, it’s 10 days in Ontario and seven days in British Columbia. Buying a new condo is a major purchase, so it’s only natural you might have cold feet after the fact. The cooling off period gives you time to reevaluate your new home purchase, receive final approval from your mortgage lender, and for your real estate lawyer to review your Agreement of Purchase and Sale. If you run into difficulties or change your mind, you can get out of the deal and receive your deposit back, no questions asked.

Closing Costs: Your closing costs are usually pretty straightforward when you’re buying a resale condo. You’ll need to budget for your down payment, plus your other closing costs, such as your home inspection, real estate lawyer fees, and land transfer tax. When your buy a new condo, not only do you need to pay those expenses, but there are additional expenses you may owe, including development and education charges, and installation of water, hydro, and gas meters. If you have a car, you’ll also have to budget for parking. All these expenses can add up to thousands of dollars extra.

Occupancy: With resale condos you know exactly when you’re moving in – the typically closing is between 30 and 90 days. With new condos your move-in date may be known in advance, but can always change with adequate notice from your builder due to delays in construction and permits. Typically occupation starts from the lower to top floors – once you’re moved in you’ll have to paying “phantom rent” for your condo until it’s registered, which usually takes three to six months. It’s important to note that phantom rent does not count toward your mortgage; some buyers are frustrated when they are forced to pay phantom rent for a year or longer.

The decision to buy or rent isn’t as simple as it may seem. Contrary to popular belief, buying doesn’t always make sense; there are times when renting can make the most financial sense. Owning a home comes with a lot of financial responsibilities and expenses – is your pocketbook ready to handle them? Your decision also comes down to lifestyle; if your career has you constantly moving every few years, it probably doesn’t make sense to buy. Let’s take an unbiased look at buying versus renting.

RENTING

Pros:

Lower Startup Cost: You won’t need a down payment of five per cent to rent. Typically, all you’ll need is first and last month’s rent to secure an apartment.

Greater Freedom: Moving is a hassle when you’re a homeowner. If you’re a renter, all you need to do is provide your landlord with adequate notice – usually 60 days – and you be on your merry way, no strings attached!

Lifestyle: If you’re a freelancer or a commission salesperson with unstable income, renting provides a lot more financial freedom. If your job requires you to relocate often, it probably makes sense to rent.

Lower Expenses: As a renter you won’t need to worry about property taxes, utilities, and maintenance and repair expenses – they’re usually included in your rent.

Cons:

No Equity: Unlike a mortgage, when you pay rent you’re not building up equity; instead you’re paying your landlord’s mortgage.

Lifestyle Inflation: When you rent your monthly expenses are typically lower than buying. To come out ahead financial you should invest the difference, but often renters spend the difference instead.

Rent Increases: If you choose a fixed-rate mortgage, your mortgage payments stay the same for the term of your mortgage. When you rent, with written notice your landlord can up your rent each year.

BUYING

Pros:

Build Your Net Worth: Through the magic of homeownership you can build your wealth twofold through leveraging. As long as your credit history is decent and you have steady employment, a down payment of five per cent will help you qualify for a mortgage to purchase your dream home. If your home’s value increases by at least five per cent in the first year you’ve already made back your money!

Forced Savings: A lot of Canadians are lack discipline when it comes to their finances. When you own a home and pay a mortgage, it’s a form of forced savings. If you don’t meet your mortgage payments, your mortgage lender will foreclose on your home and you’ll be forced to sell – talk about good motivation for paying your mortgage!

Cons:

Down Payment: When you buy a home, not only do you need to save at least five per cent for your down payment, you also need to budget for closing costs. Closing costs covers your home inspection, real estate lawyer fees, land transfer fee, and other expenses; they typically amount to 1.5 to 4 per cent of your home’s purchase price. As you can see, owning a home isn’t cheap!

Ongoing Expenses: With homeownership comes great responsibility – and expenses. When you’re a homeowner you need to budget for ongoing expenses, as well as major one-time expenses like a new roof and new windows. A good rule of thumb is to budget 2 to 4 per cent of your home’s value annually towards maintenance and repairs.

Higher Expenses: Budgeting is a very important skill to have when you’re a homeowner. You’ll need to meet your monthly expenses like property taxes, insurance, and utilities when you own a home.

For many buyers, purchasing a home will be the most complicated purchase you’ll ever make. There is a laundry list of tasks you’ll need to complete before you finally receive the keys to your new property. Buying a home be stressful you’re ill-prepared – you could spend years looking for the perfect property, only to be priced out of the real estate market if you don’t do your homework. Here are our best tips to help you prepare to one day become a homeowner.

Save Towards a Down Payment

Unless your parents are willing to loan you the money, you’ll need to save towards your down payment. Your down payment, along with your family’s income, help determine how expensive of a home you can afford. If possible, you should aim for a down payment of 20 per cent, as you’ll avoid paying mortgage insurance, which can add up to thousands of dollars in additional interest over the life of your mortgage. The government encourages homeownership by allowing first-time homebuyers to withdraw up to $20,000 money from their RRSPs under the Home Buyers’ Plan (HBP). Your TFSA is also a great place to sock money away for a down payment for a home, as the income you earn is tax-sheltered.

Needs vs. Wants

Buying a home is often an exercise in compromise. Homebuyers who expect the moon will very often be disappointed when they find out their dream home is outside their budget. Your real estate agent should take the time to develop a realistic list of needs and wants. It may be very difficult to find a new home with everything you want in your price range – by writing the list out, it will give you time to think and prioritize your needs. Perhaps a need like hardwood floors could become a want if you find a property with everything else you’re looking for.

Find a Real Estate Lawyer

Unless you’re well-versed in legalese, it’s important to find a lawyer who specializes in real estate. When you’re buying directly from a builder, you’ll often have to sign legal paperwork many pages in length filled with legal jargon. Although it can be easy to let your eyes glaze over, it’s a good idea to let your real estate lawyer review the contract in advance to make sure everything is in your best interest. You shouldn’t wait until the last minute to find a real estate lawyer – once you’ve decided to purchase a property, research and interview at least three lawyers before making your final decision. Purchasing a home is most likely your single biggest financial transaction, so getting adequate legal representation should be a no-brainer.

Home Inspection

Just because you’re buying a new construction condo, townhouse, or house, doesn’t mean you can skip the home inspection. There are still plenty of things that can go wrong. Although your condo may be under warrantee, a home inspection could save you the headache of having to deal with the builder after the fact. Condos are a lot different than houses, so it’s a good idea to find an inspector that specializes in type of property you’re looking at. Builders are often on a tight construction schedule, so it’s not unheard of for mistakes to happen. It’s better to catch them now than when you’re already moved in.

Buying a home is most likely your biggest financial decision of your lifetime, so it’s important to hire an experienced real estate agent to join your team. There are many ways you can find real estate agents, including referrals from friends and family, advertising, and the Yellow Pages.

Once you have a shortlist of candidates, you should take the time to interview each one before making a final decision. If you don’t hit it off during the interview, chances are you aren’t a good fit. An agent can either make the home-buying process more difficult or easier; you want to agent who hopefully makes it the latter.

Experience

With the real estate market red hot in many cities like Toronto and Vancouver, everyone and their uncle wants to be a real estate agent these days. Just because someone is a real estate agent, doesn’t mean they’ll do a good job. Be sure to ask how long they have been a real estate agent and how many homes they have bought and sold this year. If an agent isn’t willing to provide this information, there’s probably a not-so-good reason.

Real estate is a career where you need to invest your full effort to be successful. Find out if an agent is full-time or part-time. Be wary of part-time agents – the real estate market moves fast, so you don’t want to miss out on a home just because your agent is unavailable.

Compensation

Compensation doesn’t come into play unless you’re selling a home. When you’re buying a home the seller pays your agent’s commission, so it’s in your best interest of buyers to find the best agent you can. However, when you’re selling a home, you’ll have to pay your agent’s commission and the buyer’s agent’s commission. Commission is based on the selling price of your home; the typical commission today is five per cent of selling price. If you’re buying and selling with the same agent, try to negotiate a lower commission. Commission isn’t set in stone, so don’t be shy to negotiate. Some agents today even based their commission on a flat fee, as opposed percentage of purchase price, so shop around.

References

Unless your received a referral directly from family and friends, you should ask for references from at least three clients. A real estate agent who says he isn’t able to provide references due to confidentiality should raise a red flag, as you’re not asking for anything confidential like SIN or purchase price, only client names and phone numbers.

Credentials

Unlike home inspectors, agents need to be licensed to buy and sell real estate. Be sure to ask about an agent’s credentials to make sure they are current. Each province has different credentials; for example, in Ontario agents are required to enroll in courses through OREA (Ontario Real Estate Association). Not only do agents need to pass these courses, they must keep current by taking a set number of courses every so often.

Buying a home is expensive enough as it is these days. Besides your mortgage payments, there are monthly expenses, including utilities, property taxes, repairs and maintenance. The good news is you’re not alone – the government will actually lend homeowners a helping hand. There are actually tax benefits you can take advantage of just for being a homeowner. Let’s take a look at some ways to keep your hard-earned money where it belongs – in your pockets and not the government’s coffers.

Home Buyers’ Amount

First-time homebuyers can claim the home buyers’ amount of $5,000 towards the purchase of a qualifying home. This non-refundable tax credit is worth up to $750 and can be claimed on line 369 of your income tax return. The definition of a qualifying home is pretty broad – it includes single-family houses, semi-detached houses, townhouses, condos, apartments and even mobile homes (it also includes new construction). You’re considered a first-time homebuyer if you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years.

Home Buyers' Plan (HBP)

One of the biggest hurdles going from a renter to a homeowner is saving towards your down payment. Even saving a down payment of five per cent can be tough, especially when you have a family to support. To help make saving towards a home easier, the government introduced the Home Buyers’ Plan. Under the HBP, first-time homebuyers can withdraw up to $25,000 from your RRSP to buy a qualifying home. With the HBP plan saving towards a down payment is a lot easier – you’re able to invest pre-tax dollars inside your RRSP that grow tax-free. When you’re ready to purchase your home, you’re able to withdraw the funds tax-free. As long as you manage to pay back the withdrawals to your RRSP within 15 years it won’t be added to your income.

New Housing Rebate

If you purchase a new home, you may qualify for the new housing rebate. To receive a partial or full rebate, you’ll need to purchase a home with a price of $450,000 or under. Provinces including BC, Ontario, PEI and Quebec offer new housing rebates. The qualifying rules and rebate amount vary from province to province, so it’s a good idea to speak with your financial advisor. Owner-built houses and rental homes may also qualify for the rebate.

Rental Income

Are you looking to pay off your mortgage sooner? If you have some extra space and don’t mind sharing it with tenants, renting out a portion of your home can be a great way to bring in additional income. Although you’ll have to claim rental income on your income tax return, you can also claim a portion of expenses. The most common expenses include utilities, property taxes, mortgage interest, and home insurance.

Homeownership is a lot more expensive than simply the purchase price. While a lot of buyers forget to budget for closing costs, just as many are guilty about not budgeting for the ongoing expenses of homeownership. If you’re a first-time homebuyer who has rent all your life, you could end up “house poor” if you purchase a home at the top of your housing budget and forget to leave some money aside for monthly expenses. Let’s take a look at some of the expenses that come along with being a homeowner.

Home Insurance

Whether you purchase a new condo or home, you’ll want to ensure you have adequate home insurance. A home will most likely be your most valuable asset, so you’ll want to do everything you can to protect it. If you have a mortgage, most lenders will require that you have home insurance in place day one when you move into your new home. Home insurance can be paid annually as a lump sum or monthly, although some insurers give you a discount if you paid once a year.

Utilities

With homeownership comes great responsibility. When you’re a renter, you don’t have to worry about utility bills – it’s covered in your rent. When you’re a homeowner, it’s important to budget for your utility bills, such as your heat, electricity and water. If you’ve never owned a home before it’s a good idea to create a budget in advance and plan for these monthly expenses, as they can be quite costly. Utility bills vary depending on the size on your home and usage, so it doesn’t hurt to ask to the current owner how much they spend on utilities so you can get a ballpark figure.

Repair and Maintenance / Condo Fees

One of the most expensive parts of owning a home is upkeep. Repair and maintenance costs cover everything from a new roof to landscaping. A good rule of thumb is to budget three per cent to five per cent of your property’s value each year. For example, if you own a $600,000 home, you should budget up to $30,000 a year towards upkeep.

Although condo owners don’t have to worry about expenses like a new roof, they still need to pay their condo fees. Condo fees cover everything from repairs to amenities. Before you purchase a new condo, it’s important to find out about the condo fees to see if they fit in your budget.

Property Taxes

There are only two things certain in life: death and taxes. It’s important not to forget about property taxes, as they represent one of the most costly monthly expenses for homeowners. Whether you’re purchasing a house or condo, you’ll need to pay property taxes. Property taxes are paid to your city or municipality and cover expenses such as infrastructure and transit. Similar to all your other utility bills, property taxes can go up annually; your city council typically votes on the increase when they are finalizing their budget for the next fiscal year. Property taxes are paid monthly and can be paid directly to your city or by your lender with your regular mortgage payments.

There are certain rules in life you should follow. They say you should never wear white after Labour Day – just like a fashion faux pas, there are certain things you shouldn’t do before closing. Just because your lender has pre-approved your mortgage, doesn’t mean they can’t change their mind and deny your final approval if your finances changes. If your credit rating takes a beating or you lose your job, your financing could be in serious jeopardy. Let’s take a look at the things you should avoid doing right before your closing to avoid any last minute mishaps.

Skip the Vacation

While closing is a time for celebration, it’s also a time for your I’s to be dotted and your T’s to be crossed to finalize the deal. If you’re out of the country or don’t respond to your voice messages and emails in a timely manner, it could delay your closing. It’s a good idea to keep in close contact with your real estate agent and lawyer to make sure everything is going according to plan. You don’t have to phone them every day, but it’s a good idea to touch base with them once a week to make sure everything is going smoothly, especially leading up to closing.

Career Changes

If you’re having a midlife crisis and decide a change in career is in order, it’s best to wait until after your deal has closed. The same can be said for the decision to become self-employed – self-employed individuals have a tougher time qualifying for mortgages, so it’s best to wait until after your closing for a change in careers. Lenders are looking for individuals with stable income – changing jobs can cause them to think twice about your mortgage loan.

Hurt Your Credit History

While it can be tempting to make big purchases financed by credit before your closing day, it’s best to wait until after closing to whip out your credit card. Big purchases like a new TV set or a couch could lower your credit score, as your credit utilization and debt-to-income ratio will increase. If you really need a refrigerator or washer/dryer, it’s best to pay for them using your debit card. If you budget for these expenses in advance, you shouldn’t need to use credit anyway.

Missing payments or paying your bills late is the easiest way to lower your credit score. It’s important to maintain your emergency fund and not sink every last penny into your down payment, as unexpected expenses come up. If your credit score takes a beating, you may no longer qualify for your mortgage or you could have to seek out secondary lenders with higher mortgage rates, which could end up costing you thousands in additional interest over the life of your mortgage.

While it can be tempting to sign up for a rewards credit card when bonuses like double reward points are offered, it’s best to avoid signing up for any new credit cards before closing. Not only could this hurt your debt-to-income ratio, credit inquiries could lower your credit score.

For most people, buying a home is the largest financial transaction of their lifetime. Whether you’re a first-time homebuyer or you’ve bought resale properties before, buying new construction is a whole new ballgame. There are a host of things to look for when you’re buying resale before you sign on the dotted line. It’s important to have a strong real estate team in place, including an agent, lawyer and home inspector, to make sure everything goes smoothly and according to plan. Here are some important things to look for when buying new construction condos, townhouses, and houses.

Your Builder: Buying new construction is a big investment of time and money. It’s important to investigate the builder’s reputation. You’ll want to know if any complaints have been filed again them. It’s also a good idea to visit finished projects to get a look and feel and see if existing homeowners are satisfied.

Condo Fees: If you’re buying a condo, it’s important to budget for condo fees. Condo fees are typically based on the square footage of the unit. It’s important to find out what they are in advance to make sure it is within your budget. Be sure to ask what is included in the fees –for example, hydro may (or may not) be included depending on the builder.

Assignments: With the real estate market red hot in many cities across Canada, a popular option for homeowners is to purchase a home in the pre-construction stage and resell before occupancy. Although there’s no guarantee of profit, it’s important to find out if the builder allows assignments; otherwise you could be forced to occupy the unit yourself.

Restrictions: If you’re purchasing a new condo or townhouse, it’s important to find out about restrictions. For example, a lot of condos limit the type (dog, cat, etc.) and number of pets you can own. Activities such as using your barbeque may not be permitted from your balcony.

Add-ons: If you own a car it’s important to ask about parking. In downtown condos parking comes at a premium – you’ll often have to pay thousands of dollars extra for this luxury. Parking can make sense even if you don’t have a vehicle, as it will be a lot easier to resell your property. If you’re buying a “shoebox” condo (less than 500 square feet), be sure to ask about storage. Storage is often a premium, so you’ll want to make sure you have a locker to keep your belongs like holiday decorations.

Deposit: Unlike resale, your deposit is typically spread over a number of months until the project is complete. It’s important to carefully note your payment schedule. You don’t want to miss a payment, as you could forfeit your deposit and lose your home.

Occupancy: Your occupancy date is when you can move into your brand-new home. Although this date can change, it’s a good idea to find out so you can start planning your move.

Amenities: If you’re moving to a new condo, be sure to ask about the amenities offered. Many condos offer security, swimming pools, saunas, and more.

Congratulations, you’ve finally saved your down payment and are ready to buy your first time. Before you start shopping for your new home, it’s important to plan ahead. If you’ve never owned a home before, it’s especially important to look at the type of home that best suits your needs. You don’t want to move into a new house, only to realize you don’t enjoy doing yard work that goes along with it. Here are our best tips to help you find your dream home.

Location, Location, Location

It’s no coincidence it’s often said the three most important rules in real estate are location, location, location. Although you can spend thousands of dollars on renovations to improve the interior and exterior of your home, location is one thing you can never change. If your home is located on a busy arterial road, there’s nothing you can do to ever change that. If you’re buying a new home and the roads are still being built, be sure to carefully look at the layout to check if your street will be a cut-through street. If you have children, you don’t want to constantly worry about them running into a busy road.

Buy Within Your Housing Budget

A lot of homebuyers make the mistake of sinking all their savings into their down payment and are left “house poor.” Just because the bank tells you can you buy a new home for $650,000, doesn’t mean you should max out your housing budget. It’s a good idea to leave some breathing room in case mortgage rates are higher at renewal or you lose your job.

Don’t forget to budget for closing costs. Closing costs include everything from your home inspection to provincial land transfer tax. Closing costs typically add up to 4 per cent of your home’s purchase price, which is thousands of dollars for most homeowners.

Choose the Right Type of Home

If you’re in the market for a new home, typically you have three types to choose from: a house, townhouse and condo. If you’re looking to start a family or already have one, a single-family home is probably your best bet. Just keep in mind houses come with a lot more responsibilities. As long as you don’t mind shoveling during the winter and mowing the lawn in warmer months, a house can be a great choice. For individuals and couples who are looking for a low-maintenance lifestyle, a condo may be right up your alley. Your monthly maintenance fees will cover the yard work of the property – this can be ideal if you work long hours. The only downside is space is limited, so it might not be the ideal place to raise a family. In between is a townhouse, which has the best of both worlds. It’s important to consider all the different housing types before making your final decision.

Size Matters

It’s expensive and time consuming to constantly buy and sell. You don’t want to constantly uproot your family every two to three years to move to a new home. Space is an issue with a lot of homeowners starting a family. If you anticipate starting a family in the next few years, it can make sense to purchase a home with an extra bedroom or two now. If you plan to stay in your new home for less than five years, it may make sense to rent instead, so consider all your options before buying.

After months of house hunting, you think you’ve finally found your dream home. Before you can call it your own, you’ll need to make an offer to the seller. Buying a home is most likely the biggest single financial transaction in your lifetime, so you’ll want to make sure all your ducks are in a row before making an offer. We share our best advice on making an offer on new construction condos, townhouses, and houses.

Get Pre-Approved for a Mortgage

Unless you’re born into wealth, it’s imperative that you know what your housing budget is before you start looking at homes. It can be disappointing for buyers to find a beautifully-renovated new home, only to find out it’s out of your price range. By getting pre-approved for a mortgage, you’ll know exactly what your housing budget is and avoid the embarrassment of being denied by your lender and possibly losing your deposit. Not only will getting pre-approved save you time by only looking at homes you can afford, when it comes time to put in an offer you’ll have one less condition – condition of financing – making your offer more attractive to sellers.

The Builder’s Reputation

When purchasing new construction, the reputation of the builder carries a lot of weight. You’ve probably heard the horror stories of buyers waiting through months of delays – the last thing you want is for that nightmare to become your personal reality. You want your home to last for the years to come, so construction quality matters a great deal. JD Power and Associates does an annual ranking of builders based on customer satisfaction that is worth checking out. If you’re in Ontario, another great source is the Tarrion Warranty Corp. website. Tarrion is a private firm that administers the Ontario New Home Warranties Plan that offers buyers protection when purchasing from builders – you can see if any buyers have filed formal complaints with builders.

Get to Know Your Neighbours

Whether you’re moving into a new construction condo, townhouse, or house, it’s important to take the time to know your neighbours. Before you make an offer on a resale home, it’s easy to make a trip next door to check out the neighbours and introduce yourself. However, with new homes it’s a lot more challenging, as your neighbours won’t move in until closing. If you’re looking for a long-term home to raise your family, you should typically look for a home that’s mostly owner-occupied. Generally, homeowners take better care of properties than renters. They’re also more likely to follow the building’s rules regarding noise, one of the biggest complaints from condo owners.

Comparable Properties

Although there’s usually less wiggle room on price when you’re buying directly from a builder, you can sometimes still negotiate on upgrades and finishes. Before you submit an offer, you’ll want to know if you’re getting a good bang for your real estate buck in the neighbourhood. New homes are typically highly customized, so it can make it challenging to find comparable properties, but you should still try your very best to find a property similar to your own. Although some builders may outright refuse to deal with buyers with representation, a real estate agent can help you by offering comparable properties that have recently sold and negotiate directly the builder. New construction is a lot different than resale, so it’s a good idea to find a real estate agent that specializes in new construction homes.

Buying a home is similar to a marathon. Your race begins when you make an offer and the seller accepts. Closing day is when all your hard work pays off and you cross the finish line. Closing day is when you can finally move into your new home and call it your own. While closing day is a day of celebration, there are a few final tasks that need to be completed before all is said and done. Let’s take a look at the closing process and what happens leading up to that all-important final day.

Walkthrough

Buyers typically get three walkthroughs of a property before closing. The purpose of the walkthrough is for the buyer to take measurements, as well as confirm the property is in good order. Your real estate agent will typically accompany you on a walkthrough of the property.

Down Payment

When you buy a new home, you’ll usually make several payments in the form of deposits leading up to closing day. On closing day you’ll make your final payment, your down payment. Your down payment is typically delivered as a certified cheque to your real estate lawyer, who transfers the funds to the seller’s lawyer.

Closing Costs

You’ll also need to pay the remainder of your closing costs. Some closing costs like a home inspection happen earlier in the home-buying process. On closing day you’ll need to pay your real estate lawyer for his services. Your real estate lawyer should prepare a statement of adjustments for prepaid expenses owed to the seller. If you’re buying a new home, additional closing costs you may need to pay include development and education levies, and utilities hook ups.

Insurance

You’ll need to ensure your home insurance is in place upon closing. Most mortgage lenders require that you have home insurance to protect your home.

Paperwork

A few days before closing you’ll arrive in your lawyer’s office to sign some final documents. You’ll sign your mortgage paperwork to make sure your lender pays the seller. Your real estate lawyer will review the closing process with you to ensure you don’t miss any important deadlines.

Keys

Once your paperwork is processed and you deliver a certified cheque to your lawyer, it’s time to play the waiting game. Before the end of the day you should receive a phone call from your lawyer who will confirm the deed is recorded. You’ll receive the keys to your new home and be able to move in that very day.

Unless you’re wealthy and can afford to purchase your next home in cash, you’ll need a mortgage. Before you start looking at new homes, it’s a good idea to get pre-approved for a mortgage. When a lender pre-approves you for a mortgage, it gives you an idea about how much you can afford to spend on your next home. Although it’s not a firm commitment, you’ll be in a better shape than buyers who aren’t pre-approved when it comes time to make an offer.

What is Pre-Approval?

A mortgage pre-approval is a commitment in writing from a lender to loan you funds to purchase a property. Getting pre-approved can save you time and heartache – you won’t bother looking at homes outside your price range. Although pre-approval and pre-qualified are similar, a pre-approval takes pre-qualification a step further. Being pre-qualified gives you a rough estimate about the maximum purchase price you can afford, while a pre-approval is a commitment from the lender in writing.

Why is Pre-Approval Important?

If you’re interested in purchasing a home, it’s important to get pre-approved as soon as possible. As mentioned, a pre-approval means you know how much you can afford to spend on your next home based your family income and the size of your down payment. When you’re ready to make an offer on a property, you can consider leaving out the condition of financing to make your offer more attractive to the seller.

When you’re pre-approved, your lender will send you a letter specifying the size of the mortgage you qualify for, the amortization period (length of time), and your mortgage rate. This will give you a realistic picture about how much you can afford to spend on your next home. It will also let you develop a household budget, since you’ll know what your mortgage payments will be.

Another important reason to get pre-approved is a lot of lenders will offer a rate hold. What’s a rate hold? As the name suggests, your lender will “hold” or secure a mortgage rate for you for up to 120 days. If mortgage rates go up while your rate hold is in effect, you’ll still qualify for the lower rate, as long as you close before your rate hold expires. Conversely, if mortgage rates go down when you’re ready to close, you can take the lower mortgage rate. It’s a win-win situation for homebuyers.

If you’re buying a new construction condo, townhouse or house, a pre-approval from a traditional lender may not matter much when your closing date isn’t for another two years. The good news is that there is often on-site financing when you’re buying a new home. Although the interest rate offered is typically higher than traditional lenders, lenders will hold the rate for you until closing if mortgage rates go up between then.

How do you get Pre-Approved?

You’ll need to provide your lender with documentation to get pre-approved. Paperwork varies between lenders, but typically your lender will ask you to provide paperwork including, financial statements for your sources of down payment, a letter of employment, and notices of assessment from the last two years.

When purchasing a home, there are two types of offers – clean offers and conditional offers. A clean offer is an offer free from conditions, while a conditional offer has at least one condition that must be met before the deal closes. In a seller’s market when bidding wars are more common, clean offers are a lot more common.

Now that you understand the different types of offers, let’s talk about contingencies. Contingencies (or conditions, as they are commonly referred to) offer a plan B for buyers – buyers may be able to get out a deal if one of the conditions isn’t met. Conditions are common in the resale market, but less common in new construction. Let’s take look at the most common conditions used by buyers below.

Financing

Just because you’re pre-approved for a mortgage, doesn’t mean your lender can’t refuse your mortgage application. For example, if you lose your job or embellish on your mortgage application your lender may not approve your mortgage.

Although you won’t have to deal with bidding wars when buying a new construction home from a builder, you can still run into some problems. If you’re buying a new condo, you may run into some difficulties securing financing if your condo is less than 500 square feet. Mortgage lenders aren’t too keen on “micro condos,” as there’s a limited market for them; they could be a tough sell in a slow market.

It’s important to look at comparable properties to ensure a builder’s base selling price is reasonable. Your lender may refuse to give you the full amount if the appraisal comes back with a lesser value.

Inspection

A lot of buyers forgo the home inspection when they’re buying new construction homes. Although new homes don’t have the same things to worry about as resale homes, it’s still a good idea to get an inspection. An inspection can turn up any defective material that may have been used and any grading issues. For example, your land may be graded towards the back of your home, which could lead to a crack in the foundation down the road. It’s better to get this resolved now than pay the expense out of pocket a couple years down the road.

Buyer’s Home

A less common clause is conditional upon the buyer’s home selling. When buying a new construction home, this condition will probably not fly with builders. If you’re concerned about selling your home, you can always put it on the market first and obtain bridge financing if the closing dates don’t coincide. New construction homes often have an occupancy date months or years in advance, so it should give you plenty of time to sell your home.

Real Estate Lawyer

Although you can put in a condition to have your real estate lawyer review your offer, you already have a 10-day cooling off period where you can get out of your deal no strings attached. During this time you can request for your real estate lawyer to review your contract. Adding an additional clause would probably be overkill.

Are you looking to be mortgage-free ASAP? If you have a closed mortgage like the majority of homeowners, mortgage prepayments are a great way to reduce your amortization period by years and save thousands in interest. Why are prepayments so powerful? They let you make payments beyond your regular mortgage payments that go straight towards your principle.

Why are Mortgage Rates Higher on Open Mortgages than Closed Mortgages?

Mortgage lenders make the majority of their profit on interest. With an open mortgage you’re able to pay off your mortgage in full at any time, while with closed mortgages you’ll incur costly penalties if you exceed your prepayment privileges. Since your lender doesn’t know whether you’ll pay off your mortgage in full at any time, open mortgages come with a higher rate, as your lender could end up with less profit.

Why Should I Use My Prepayments?

If you have a surplus in your monthly budget, there’s it’s hard to argue with a guaranteed rate of return. With investments like mutual funds and stocks your rate of return depends on its performance – paying down your mortgage provides you with a guaranteed rate of return.

Your mortgage is most likely the largest debt in your lifetime, so anything you can do to pay it down faster can have a dramatic effect on your financials. Even by paying the same amount more often – paying your mortgage weekly instead of monthly – it can save thousands in interest. As you eliminate your mortgage principle, more of your regular mortgage payment will go towards principle and less towards interest.

Paying down your mortgage faster can also mean financial freedom. Once your mortgage is paid off, you can accelerate your savings towards retirement or other financial goals. A mortgage is a financial burden for many – what if you lose your mortgage or you suddenly pass away, leaving your spouse to pay the mortgage? With your mortgage out of the way, you won’t have to stress as much about being caught in a financial bind.

How can I Pay Off My Mortgage Sooner?

Here are the best ways to be mortgage-free sooner and save thousands in interest:

- Don’t fall victim to lifestyle inflation. When you receive a bonus or raise at work, apply that extra money immediately towards your mortgage.

- Create and budget and track your spending. It will help you stay focused on your goal of mortgage freedom.

- Make a lump sum payment with your tax refunds towards your mortgage.

- Accelerate your mortgage payments. Instead of paying monthly, pay weekly. For example, instead of paying $1,500 per month, you can pay $375 per week. To pay off your mortgage even sooner, switch to accelerated weekly – the extra payments will dramatically reduce the life of your mortgage.

- If mortgage rates are expected to be higher when you renew, pay your mortgage as if you’re already paying the higher rates. Not only will you save on interest right now, you’ll already be used to paying a higher mortgage rate.

- Pay yourself first – have a separate bank account just for mortgage payments. Direct your money from your pay cheque there before you’re tempted to spend it.