Working with an agent
Let your real estate agent do the searching for you. The best buys aren’t in the newspaper ads; most great opportunities are on "hot sheets" that are available every morning to salespeople with access to MLS information.

An agent’s job is to:

• Provide information on the property and the area
• Negotiate a price and terms that are agreeable to both buyer and seller
• Help arrange a source of financing

• Offer a detailed description of your property needs and wants. If you will absolutely not consider a house without a hardwood floor, say so. And if air conditioning is a "nice to have" rather than a "must have," communicate that, too.
• Be specific about where you want to live. If you refuse to live outside a certain area, it might take longer to find you a home, but your agent will know not to waste your time with anything not in your chosen neighbourhood.
• Tell your agent what you can afford. He or she can help you get a pre-approved mortgage so you know for sure what your price range will be.
• Communicate your likes and dislikes for each property you see. It will help your agent narrow down the possibilities.
• Commit to one salesperson.
• Respect and perform the terms of the purchase agreement.
• Keep an open mind. Agents know about those charming little areas that you’ve never even heard of. You might find your dream home in a completely unexpected place.

The elements of an offer
Here’s a quick reference to the basics you need to know about making an offer on a property.

1. Price
The price is determined by the market.  The market drives prices up or down.  The offer can be at the list price, above or below.  This is what our team will guide you through.

2. Deposit
Will be applied against the purchase price of the home when the sale closes. We can advise you on a suitable amount to offer.

3. Terms
Includes the total price the buyer is offering as well as the financing details, pre-possession walk throughs etc. 

4. Conditions
These might include "subject to home inspection," "subject to the buyer obtaining financing," or "subject to the sale of the purchaser’s property."

5. Inclusions and exclusions
These may include appliances and items such as window coverings, light fixtures, hot tubs.

6. Closing or possession date
The day the title of the property is transferred to the buyer and funds are received by the seller, unless otherwise specified (except in Manitoba and Quebec).

 

Choosing a neighbourhood
You’re not just buying a home - you’re buying a location. And even the most perfect house won’t feel right if the neighborhood isn't right. Educate yourself about the area so you’ll choose wisely - and end up being happy with your decision.

• Are you close to shopping and recreation? Being close to stores, parks, recreational facilities, a post office will save you time.


• Do people in the area take care of their homes? Explore the neighborhood, keeping an eye out for signs of neglect (overgrown lawns, houses in need of paint, trash and junked appliances littering yards). A run-down neighborhood can drive down your property value.


• Are there schools nearby? If you have children, the proximity and quality of schools is key. Talking to neighbors with children can be helpful, too.


• Is there good access to transportation? Living near public transport might mean an easier commute to work.


• Is it safe? Check with the local police department - they may be able to provide statistics about break-ins or other crimes.


• Will the home increase in value over time? Homes in some neighborhoods appreciate faster than others. We can provide some data for you


• Is it quiet? Listen for traffic noise, barking dogs, trains and any other noises that might bother you. Return to the neighborhood at different times of the day to get an accurate impression.

Protect Yourself with a Home Inspection

That gorgeous house on the corner lot may look great, but it could be hiding all sorts of expensive, annoying problems, from a leaky roof to faulty wiring, to a moldy basement.

Make sure your home is solid and secure inside and out before you buy it. A home inspector will determine structural and mechanical soundness, identify problem areas and generate a thorough report.

If you decide to go ahead and buy a home with issues that have been flagged by your inspector, you can base your offer on how much potential repairs and upgrades may cost.  This may save you money.

Home inspection costs range according to size, age and location of the home.  We can recommend a reputable home inspection service.

 

Options for empty nesters and retirees
The kids have grown and retirement is just around the corner. You’ve decided it’s time to move to a smaller home with lower costs and less maintenance.

Figure out what you need
You have a number of decisions to make before you start looking for your new home:

• Do you want to stay in the same neighborhood? If not, remember that moving away means you may have to build a new network of acquaintances, get to know a new area, etc.
• If you decide to move out of your neighborhood, where would you like to go? A better neighborhood within the city? A community outside a major center? Someplace closer to your kids? Somewhere warm?
• What type of property would suit your lifestyle? Is it a condo that needs no upkeep or a bungalow that would still allow you to garden?

Glossary of terms

Amortization period: The actual number of years it will take to pay back your mortgage loan.

Appraised value: An estimate of the value of the property, conducted for the purpose of mortgage lending by a certified appraiser.

Assumability: Allows the buyer to take over the seller’s mortgage on the property.

Closed mortgage: A mortgage that locks you into a specific payment schedule. A penalty usually applies if you repay the loan in full before the end of a closed term.

Condominium fee: A payment among owners, which is allocated to pay expenses.

Conventional mortgage: A mortgage loan issued for up to 75% of the property’s appraised value or purchase price, whichever is less.

Down payment: The buyer’s cash payment toward the property that is the difference between the purchase price and the amount of the mortgage loan.

Equity: The difference between the home’s selling value and the debts against it.
High-ratio mortgage: A mortgage that exceeds 75% of the home’s appraised value. These mortgages must be insured for payment.

Interest rate: The value charged by the lender for the use of the lender’s money, expressed as a percentage.

Land transfer tax, deed tax or property purchase tax: A fee paid to the municipal and/or provincial government for the transferring of property from seller to buyer.

Maturity date: The end of the term of the loan, at which time you can pay off the mortgage or renew it.

Mortgage: The financial institution or person that lends the money.

Mortgage insurance: Applies to high-ratio mortgages. It protects the lender against loss if the borrower is unable to repay the mortgage.

Mortgage life insurance: Pays off the mortgage if the borrower dies.

Mortgagor: The borrower.

Open mortgage: Allows partial or full payment of the principal at any time, without penalty.

Portability: A mortgage option that enables borrowers to take their current mortgage with them to another property, without penalty.

Pre-approved mortgage: Qualifies you for a mortgage before you start shopping. You know exactly how much you can spend and are free to make a firm offer when you find the right home.

Prepayment privileges: Voluntary payments that are in addition to regular mortgage payments.

Principal: The amount borrowed or still owing on a mortgage loan. Interest is paid on the principal amount.

Refinancing: Paying off the existing mortgage and arranging a new one or renegotiating the terms and conditions of an existing mortgage.

Renewal: Renegotiation of a mortgage loan at the end of a term for a new term.
Second mortgage: Additional financing, which usually has a shorter term and a higher interest rate than the first mortgage.

Term: The length of time the interest rate is fixed. It also indicates when the principal balance becomes due and payable to the lender.

Title: Legal ownership in a property.

Variable rate mortgage: A mortgage with fixed payments that fluctuates with interest rates. The changing interest rate determines how much of the payment goes towards the principal.

Vendor take-back mortgage: When the seller provides some or all of the mortgage financing in order to sell their property.

Determine what you can afford
Buying a home involves both one-time costs and more regular monthly expenses. It’s important that you take both into account when you’re figuring out how much you can spend on a home.

The largest one-time cost is the down payment.  In addition to the actual purchase price, there are a number of other expenses that you may be expected to pay for.

Typical One-Time Expenses

• Mortgage application and appraisal fee (paid at time of application)
• Appraisal fee (paid at inspection)
• Property inspection (optional) 
• Legal fees (paid at closing)
• Legal disbursements (paid at closing)
• Deed and/or mortgage registration (paid at closing)
• Property survey (sometimes provided by seller) (paid at closing)
• Land Transfer, Deed Tax or Property Purchase Tax (in Quebec within3 months following signing) (paid at closing)
• Mortgage interest adjustment and take over fee (if applicable) (paid at closing)
• Adjustments for fuel, taxes, etc. (paid at closing)
• Mortgage insurance (and application fee if applicable) (paid at closing)
• Home and property insurance (paid at closing and on-going)
• Connection charges for utilities such as gas, water and electricity (paid on date of move)
• Moving expenses (paid on date of move)

Protect your home with insurance
When you purchase a home, you have several insurance options that will protect your investment in different ways.

Homeowners’ Insurance
Most mortgage lenders insist on fire insurance coverage that is at least equal to the loan amount or the building value, whichever is less. You should also consider a homeowner’s policy that combines fire insurance on the building and its contents with personal liability coverage. Consult your general insurance agent for professional advice.

Mortgage Life Insurance
When lenders refer to mortgage insurance, they’re referring to coverage that’s provided by CHMC or MICC for a high ratio mortgage. Mortgage Life Insurance (MLI) is optional, inexpensive coverage on your life, which protects your beneficiaries by paying off your outstanding mortgage in the event of your death. MLI premiums are based on your age and mortgage amount. The premium is added to your mortgage payment so there’s no extra paperwork, and it remains the same until your mortgage is paid off.

Disability Insurance
Disability Insurance provides replacement income if an accident or illness prevents you from working.

Job Loss Mortgage Insurance
Job Loss Mortgage insurance covers the mortgage payments in the event that you involuntarily lose your job.

Making an offer
When it comes time to make an offer, we will provide current market information and help you draft a suitable offer. We will then communicate the offer to the seller's agent who in turn sends to the seller. Sometimes there may be more than one offer on a property coming in at the same time. We will guide you through this process as well.

An Offer to Purchase*
An Offer to Purchase is a legal document which specifies the terms and conditions of your offer to purchase the home. The offer can be firm or conditional.

Firm Offer to Purchase: preferable to the seller because it means you are prepared to purchase the home without any conditions. If the offer is accepted, the home is yours.

Conditional Offer to Purchase: means that you have placed one or more conditions on the purchase, such as "subject to home inspection," "subject to financing" or "subject to sale of buyer’s existing home." The home is not sold until all the conditions have been met.

Acceptance of the Offer
Your Offer to Purchase will be presented as soon as possible. The seller may accept the offer, reject it, or submit a counter-offer. The counter-offer may be in reference to the price, the closing date, or any number of variables. The offers can go back and forth until both parties have agreed or one of you ends the negotiations.

 

Understanding market conditions
The real estate market is always changing, and it helps to understand how market conditions can affect your position as a buyer. We will provide you with info on current conditions and explain their impact on you.

Buyers’ market
The supply of homes on the market exceeds demand.

Characteristics

• High inventory of homes
• Few buyers compared to availability
• Homes on the market longer
• Prices tend to drop

• More time to look for a home
• More negotiating leverage

• Smaller inventory of homes
• Many buyers
• Homes sell quickly
• Prices usually increase

• May have to pay more
• Must make decisions quickly
• Conditional offers may be rejected

• Sellers accept reasonable offers
• Homes sell within an acceptable time period
• Prices generally stable

• More relaxed atmosphere
• Reasonable number of homes to choose from

Types of home ownership

What type of home is right for you?
There are three categories of home ownership: freehold, condominium and cooperative. Each has its benefits and drawbacks - speak to your Royal LePage agent to figure out which type will work best for your needs and your lifestyle.

Freehold
Freehold homes offer two significant benefits: freedom of choice and privacy. Since you own the structure and grounds, you’re free to decorate and renovate whenever and whatever you want. However, all maintenance (indoors and out) is your responsibility - be prepared to spend time and money taking care of your home.

Condominiums
Condominiums are typically less expensive to own than a detached house. With a condo, you own (and are responsible for) the interior of your unit. Upkeep of the building and grounds is handled by the condominium association, which is funded by monthly fees collected from tenants. The down side? Condo residents enjoy less privacy than residents of detached homes, and often have to adhere to strict rules regarding noise, use of common areas, renovations, etc.

Cooperatives
Co-ops are like condominiums, except instead of owning your unit, you own a percentage of shares in the entire building. One drawback to living in a cooperative is that if you decide to sell your shares and move out, the co-op board has the right to reject your prospective buyer.

Title insurance explained
What is title insurance? Do you need it? Here’s some information that can help you make an informed decision.

What does "title to property" mean?
Title is the legal term for ownership of property. Buyers want "good and marketable" title to a property. "Good title" means title appropriate for the buyer’s purposes; "marketable title" means title the buyer can convey to someone else.

Why do I need title insurance?
Prior to closing, public records are searched to determine the previous ownership of the property, as well as prior dealings related to it. The search might reveal existing mortgages, liens for outstanding taxes, utility charges, etc., registered against the property. At closing, the buyer expects property that is free of such claims.

Sometimes problems regarding title are not discovered before closing. They can make the property less marketable when the buyer subsequently sells, and can cost money to fix. For example, the survey might have failed to show that a dock and boathouse built on a river adjoining a vacation property was built without permission. The buyer of the property could be out-of-pocket if he is later forced to remove the dock and boathouse. Or, the property might have been conveyed to a previous owner fraudulently, in which case there is the risk that the real owner may come forward at some point and demand their rights with respect to the property.

Who is protected with title insurance?
Title insurance policies can be issued in favour of a purchaser, a lender, or both. Lenders will sometimes require title insurance as a condition of making the loan. Title insurance protects purchasers and/or lenders against loss or damage sustained if a claim that is covered under the terms of the policy is made.

Types of risks that are usually covered include:

• survey irregularities
• forced removal of existing structures
• claims due to fraud, forgery or duress
• unregistered easements and rights-of-way
• lack of pedestrian or vehicular access to the property
• work orders
• zoning
• set back non-compliance or deficiencies, etc.