You have a pretty good idea of the price range you can afford, and now
it's time to fine tune and have everything come together.
Step 1: Pre-approved Mortgage
a pre-approval tells you exactly how much you can afford and
guarantees your rate for up to 120 days. Now, you can buy a home with
the confidence of knowing you qualify. It also shows the vendor you are serious about buying
the home and keeps you several steps ahead of others in the market.
Step 2: Preparation
Now that you know your
price range, you can begin the search. First, make a Checklist of your
needs the home will fulfill, such as: type of home, type of ownership,
location, inside and outside features, condition, and other matters
such as property tax levels, etc. At this time, you should decide on a
lawyer so that he/she will be ready to check all legal documents to
ensure your interests are protected.
Step 3: The Search, for house and agent
With your pre-approval,
personalized needs checklist, and lawyer at hand, you are ready to
start looking at properties. At this time, it is important to find
yourself a real estate agent to help you with your search. The real
estate agents have a lot of information readily available for sale
and the current selling prices. They can help
you fine tune your personalized needs checklist; explaining the types
of property and ownership, recommending neighborhoods, pointing out
inside and outside features, and condition of a particular property.
The agent also is
skilled at preparing the paperwork involved in making an offer to
purchase and closing the sale (your lawyer will be handy here to
review any offers). Make sure that you communicate your needs clearly,
as you are responsible for all decisions. Choosing the right agent is
important for you as you are placing a lot of trust on them to help
you with your purchase. Ask friends and relatives if they could
recommend someone. Chances are, if they are recommending them, there
was something about the level of service and commitment they received
Once you have found the
right home, visit it at least twice, once in the daylight and once at
night, and have your needs checklist with you.
Step 4: Making An Offer
If you have decided
that this is the right home for you, decide on a figure and have your
agent prepare the Offer (Agreement of Purchase And Sale). With your
agent, list everything you want included (i.e., conditions on
financing and inspection, survey clause, appliances, light fixtures,
etc.). At this time, you may want your lawyer to check it out, and
certainly prior to waiving any conditions to make the offer firm.
A firm offer
means that you will buy the property as outlined in the offer of
purchase and that there are no conditions attached. Once the vendor
accepts the offer, you are both bound to the agreement.
A conditional offer
means that you will buy the property if those certain conditions are
met. We recommend that a condition on financing is included,
especially for high-ratio insured mortgages. If you have a condition
on financing clause, get in contact with us right away. We'll get
right on it to finalize the mortgage approval. At this time, you will
need the following information:
Copy of the accepted Offer To Purchase
Copy of listing (if listed on The MLS® System)
Completed and signed application (if one is not on file yet, so
that we can run a credit check).
your earnings: if you are salaried, a signed letter of employment,
3 years tax returns and assessments if commissioned, and 3 years
tax returns and financial statements if self-employed.
your down payment: it may be from your savings, RRSP, equity from
sale of another home (copy of sales agreement), a gift letter for
any money gift.
If purchasing a
condominium, a copy of the financial statements for the
Once all conditions
have been satisfied (the offer has been accepted), a deposit is
required as a symbol of commitment to the offer of purchase, and it is
made payable to the listing Real Estate Firm "In Trust".
Interest on the deposit can be requested, and this deposit will be
applied towards your down payment on closing.
Step 5: Closing the deal and taking possession
After the mortgage has
been approved and all conditions waived, you must deliver the
following documents to your lawyer:
Copy of the complete accepted offer to purchase (all schedules, waivers, etc)
Certificate of Fire Insurance - The insurance company will need to know the
details of property and Mortgage Company to prepare this. Lenders usually
require you to arrange for full replacement value of the building.
A copy of a Survey, signed by a qualified land surveyor. In lieu of
a survey, title insurance is acceptable with most lenders.
Advise us of the name, address, and phone number of your lawyer so that the
mortgage instructions can be sent to him/her.
You should arrange
for utilities (such as electricity, water, fuel, and telephone) to
begin service in your name.
A few days before
the closing date, you will meet with your lawyer to go over all
details. At this time, you will also be provided with a dollar
figure so that you can prepare your certified cheque, made in
trust to the lawyer. This amount will cover for the balance of the
down payment, closing costs and adjustments (please refer to
section: "Closing Costs and Adjustments" for details and
On closing day, the
lender will provide your lawyer with the agreed mortgage funds to
close the transaction. Your lawyer will register the property and the
mortgage in your name, and obtain the keys and the deed for you.