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When time and money matter, Christian, Paul and Fran will sift through the maze of listing information to provide the options that best suit your needs.
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With market knowledge, combined with direct on-line computer access to all listings in the real estate market, Christian, Paul and Fran can create short lists of homes that directly fit your requirements.
On an ongoing basis, Christian, Paul and Fran will continue to search the market for new homes that come on the market that meet your needs. Using the Multiple Listing Service system (MLS), Christian, Paul and Fran can access any home listed with any company, in addition to those offered for sale by Chestnut Park Real Estate Ltd.
As an enhanced service, Christian, Paul and Fran can email you daily listings of homes that meet your requirements. You'll benefit by being kept current of hot new listings.
While it is possible to search for a home on your own, not all houses are advertised nor have "for sale" signs posted on their front lawns. As well, many homes sell before they reach the MLS system.
When experience matters, Christian, Paul and Fran will advise you of critical issues that you impact your purchase (such as asbestos, knob and tube wiring, UFFI etc.). That way you will make an informed decision that is in your best interests.
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As a purchaser,
in the vast majority of times, there is no cost to you to
use Christian, Paul and Fran's services. On the other hand, given
Christian, Paul and Fran's solid negotiating experience, they can
save you money by negotiating the best price and terms for
you.
With Christian, Paul and Fran, you will get the highest level of service as you search for your "new" home.
Christian, Paul and Fran will be there every step of the way. Every
home purchase is a major purchase and a large step. It helps
that you are well informed so that you can make the right
choices. Christian, Paul and Fran are there to answer your questions,
advise you, and make the process comfortable and smooth.
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Price - the offering price will depend on market conditions, your own opinion of its value, and market information provided by Christian, Paul and Fran. The offering price may be different from the seller's asking price.
Deposit - the deposit shows good faith and that you are serious about buying the home. It is held in trust and applied against the selling price on closing. It forms part and parcel of your total downpayment. The actual amount of the deposit will vary according to the asking price of the house. Christian, Paul and Fran will advise you on how much is an appropriate deposit.
Conditions - there are a wide variety of conditions that you can place in your offer. It is extremely common to make your offer conditional on home inspection by a certified home inspector and conditional on bank financing. If you own another property, your offer may also be subject to you being able to sell your property.
Inclusions - are those items which you wish to be included in the purchase price; for example, appliances, window coverings and blinds, etc. Inclusions will entail "chattels" or items which can be taken by the owner that are mobile and are not normally included in the purchase price.
Exclusions - are those items the seller wishes to take with them; for example, a special light fixture. If something requires a screwdriver, hammer, or other tool to be removed and the Seller intends on taking it with them, it should be noted under exclusions.
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Land Survey - a land survey report / property survey / building location survey / surveyor's real property report (four words which have identical meanings in practice) - is a complicated and detailed measured drawing of the location of all properties lines and all of the buildings / additions / fences / decks / improvements that lie therein. If an existing survey exists, it is common practice to have a clause requesting it in the offer.
Completion Date / Closing Date / Possession Date - these three names are all the same. It is usually (but not always) the date people move in to their "new" home as well. It is the date that title to the property & keys are handed over to you, the Purchaser, in exchange for funds. The transaction is finalized with the services of your lawyer and the Seller's lawyer.
Other Clauses - each offer is very different and is custom tailored to suit your needs and the specifics of the property. Christian, Paul and Fran will assist you in creating these clauses.
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- 1. Christian, Paul and Fran will get you background information on the area, market conditions, etc. to help you make an informed buying decision.
- 2. Christian, Paul and Fran will draw up your offer and go over every detail with you. The offer is known as an Offer to Purchase or also known as an Agreement of Purchase and Sale. This offer incorporates the major elements as noted above.
Christian, Paul and Fran will communicate that they have an offer on the property
with the other agent. Sometimes there is more than one
offer from different purchasers at the same time. Christian, Paul and Fran
will go over this situation and process with you.
- 3. Christian, Paul and Fran make an appointment, at the very earliest
time, to present your Offer to the other parties. Christian, Paul and Fran
negotiate the offer on your behalf and represents you
in your best interests.
- 4. The seller may accept the offer, reject it, or countersign the offer. A counter offer from the seller may be in reference to price, closing date, or other variables.
The usual course of action is to countersign the offer. He will communicate with you shortly after the presentation of the offer to go over the next step.
- 5. The offer may go back and forth. You as a Purchaser have the same three choices: to accept the counteroffer, to reject it, or to countersign it again back to the Seller.
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After there has been an "meeting of the minds" and the price and terms have been agreed to, the next step is to contact a home inspector to arrange for a home inspection (see Part Two - "Choosing a Home Inspector") and the lending institution (see Part Two - "Choosing a Mortgage Lender") to arrange for a full approval, including a bank appraisal of the property you purchased.
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AS LITTLE AS 5% DOWNPAYMENT AND IN SELECT CASES, WITH AS LITTLE AS 0% DOWNPAYMENT
At the present time, all buyers including first time buyers can purchase a home for as little as 5% down (conditions apply - see lenders for details).
Although it may sound complicated, it is a relatively straightforward process.
If you have between 5% downpayment and 20% downpayment, you will apply for a "High Ratio" mortgage. The process is only slightly different than apply for a regular or "Conventional" mortgage (i.e. 20% downpayment or greater).
A high ratio mortgage requires high ratio mortgage insurance which is just like any other type of insurance. It insures against risk. It protects the lender against the risk of default of repayment. In Canada, non-private lenders can only legally lend up to 80% of the appraised value of a home (hence, conventional mortgage financing). But with high ratio mortgage insurance, lenders can lend as much as 95% of appraised value (high ratio mortgage financing).
There are two high ratio mortgage insurance companies which insure lenders - CMHC and GEMI. It's your choice, except that GEMI will not underwrite in all areas. Your lender will advise you.
In Part Two you will find a section called "Choosing a Mortgage Lender". The process is the same.
- Q: What is the cost involved of obtaining a high ratio mortgage vs. a conventional mortgage?
- A: There are two costs:
- 1. the application fee (currently $165 including the bank appraisal). This is due on the date you apply for financing.
- 2. the insurance premium. Premium rates range from 0.5% to 3.1% (higher with 0% down). See www.cmhc.ca for full particulars.
- Q: What is the difference between applying for a high ratio mortgage and a conventional mortgage?
- A: Very little. You still only do one application.
When you apply for a conventional mortgage, there are two approval levels: you as a client must be approved and then the property purchased must be approved (based on the appraisal report). When you apply for a high ratio mortgage, there is a third level of approval: you must be approved by the mortgage insurance company. As a general rule of thumb, the financial institutions are well acquainted with CMHC and GEMI's guidelines and will gear their own application to be in line with CMHC's and GEMI's requirements.
- Q: Does the approval process take any longer because it is a high ratio mortgage?
- A: No. In fact, the process may be expedited since it is completely automated, with your application being elevated within seconds to CMHC or GEMI.
BORROWING FROM YOUR RRSP'S
The Home Buyers' Plan permits first time buyers to withdraw up to $20,000 each from their RRSP's to put toward their downpayment to enable them to buy their first home.
There is no tax withheld on the money withdrawn from the RRSP account. You should speak to your lawyer about preparing the additional paperwork to facilitate the withdrawal.
The amount borrowed must be repaid over a period of time, not exceeding 15 years.
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Looking for a house without getting pre-approved by a lender - When you are pre-approved, you are effectively a cash buyer. This makes it much easier to negotiate with the seller. Do not mistake pre-approval with pre-qualification; pre-qualification is only the first step in gaining pre-approval. Ask your banker or realtor for details.
Failing to check out the neighbourhood thoroughly before buying - How do traffic patterns change depending on the day, or even the time of day? Are there any future developments in the works? Is that nice greenspace down the road actually zoned for high-rise development? Ask around - check it out first.
Making an offer based upon the asking price, not the actual market value - Do your homework. What have similar properties sold for in the immediate area? How long were they on the market? How does this one compare? Is it over-priced, under-priced, or fair value? Ask your realtor for an up-to-date market summary.
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Letting "first impressions" affect your decision too much - There are entire books written on how the first impression of a home is the single most decisive factor affecting many purchasers' decision to buy. Don't let poor decor or messy housekeeping scare you away from a structurally solid home that meets all your needs. Remember that you are buying the house, not the furnishings.
Buying a house without a professional home inspection - When buying a house, consider getting a professional property inspection. Not only will you know what you are buying, but these reports will protect you from unforeseen nasty suprises in both the short and long run. In fact, consider having a home inspection completed prior to submitting your offer.
Assuming that the Bank's quoted mortgage rates are written in stone - Like many industries, banks are experiencing increased competition and are often willing to negotiate mortgage rates. Depending upon the market and profit spreads, it is sometimes possible to negotiate substantial savings. Ask your banker or realtor for details.
Not shopping for home insurance until you are ready to move - If you wait until the last minute, you will be rushed in finding insurance. Allow time to shop around and get the best deal.
Signing documents without reading them - Do not wait until the last minute before reading the documents; there probably will not be time. Try to get copies of all documents early on in your home search so that you can peruse them at your leisure.
Making verbal agreements - Not only are they harder to enforce, but any written contract you sign will override a verbal agreement. Contract law says that verbal agreements are not enforceable when they deal with Real Property. Always get it in writing!
Not knowing your rights and obligations - If you do not know your rights, then you can be taken advantage of. If you do not know your obligations, you may inadvertently cause friction between yourself and those with whom you are about to enter a contract. Both your realtor and lawyer are great sources of information concerning this - make use of their expertise and resources.
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