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 everything you need to know about making an on offer on a property.

1. Price
Depends on the market and the buyers, but generally, the price offered is different from the asking price.

2. Deposit
Shows the buyer’s good faith and will be applied against the purchase price of the home when the sale closes. Your agent 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. The buyer may be arranging his/her own financing or may ask to assume your existing mortgage if you have an attractive rate.

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 certain fixtures or decorative items, such as window coverings or light fixtures.

6. Closing or possession date
Generally, 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).

Qualifying for a mortgage
Your Royal LePage agent can arrange to have you pre-qualified for a mortgage before you start shopping for a home. It’s easy, and you’ll avoid possible disappointments down the road if you fall in love with a place, then find out you can’t afford it. Plus, once you do find the perfect home, it will mean you can make an offer immediately.

Here’s how mortgage approval works: the amount of money you qualify for, plus the amount of cash you can put down equals the amount you can afford to spend on a home. Most lending institutions won’t allow more than about 30% of your income to support a mortgage. If you have other debts, they usually won’t allow your debts and your mortgage to exceed 40% of your income.

Finalizing your mortgage
Once you’ve found the home you want to buy, you’ll need to finalize your financing. You’ll need to provide your lender with the following documents:

1. A copy of the real estate listing of the property. If the home is still to be built, the mortgage lender will need to see the architect’s or builder’s plans and details on lot size and location.
2. A copy of the offer to purchase or the building contract, if this document has been prepared.
3. Documents to confirm employment, income and source of pre-approval.
4. If you have a pre-approved mortgage, it’s a simple matter of finalizing a few details with your mortgage specialist.

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 mouldy 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, provide cost estimates for any work required, and generate a report. It’s a great way to avoid headaches and costly problems that can turn a dream home into a money pit.

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.

Home inspection costs range according to size, age and location of the home. Your Royal LePage sales representative can recommend a reputable home inspection service or arrange for an inspector to visit your property.

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.

Closing the deal
Closing day is the day you become the official owner of your home. However, the entire closing process usually takes a few days.

Typically, you visit your lawyer’s office to review and sign documents relating to the mortgage, the property you are buying, the ownership of the property and the conditions of the purchase. Your lawyer will also ask you to bring a certified cheque to cover the closing costs and any other outstanding costs.

Once your mortgage and the deed for the property are officially recorded, you become the official owner of the property and your lawyer will call you to pick up the keys to your new home.

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, which usually represents upto 25% of the total price of the property. Then, 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) (paid at closing)
• 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 PropertyPurchase Tax (in Quebec within3 months following signing) (paid at closing)
• Mortgage interest adjustment andtake 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)

Making an offer
When it comes time to make an offer, your Royal LePage Real Estate Professional will provide current market information and help you draft a suitable offer. He or she will then communicate the offer to the seller (or the seller’s representative) on your behalf. Sometimes there may be more than one offer on a property coming in at the same time. Your agent will guide you through this process.

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.

*In the province of Quebec, this is referred to as a "Promise to Purchase."

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 land transfer taxes
If you’re buying a home in a large Canadian centre, you’ll need to add land transfer taxes to your list of closing costs.

Unless you live in Alberta, Saskatchewan, or rural Nova Scotia, land transfer taxes (or property purchase tax) are a part of the homebuying process. These taxes, levied on properties that are changing hands, are the responsibility of the purchaser. Depending on where you live, taxes can range from 0.5% to 2% of the total value of the property.

Many provinces have multi-tiered taxation systems that can seem complicated. If you purchase a property for $260,000 in Ontario, for example, 0.5% is charged on the first $55,000, 1% is charged on $55,000 to $250,000, while the $250,000 - $400,000 range is taxed at 1.5%. Your total tax bill? $2,375.00.

Land transfer taxes by province

British Columbia
Up to $200,000 X 1% of total property value
From $200,000 up X 2% of total property value

Manitoba
Up to $30,000 N/A
From $30,000 to $90,000 X 0.5% of total property value
From $90,000 to $150,000 X 1% of total property value
From $150,000 up X 1.5% of total property value

Ontario
Up to $55,000 X 0.5% of total property value
From $55,000 to $250,000 X 1% of total property value
From $250,000 to $400,000 X 1.5% of total property value
From $400,000 up X 2% of total property value

Quebec
Up to $50,000 X 0.5% of total property value
From $50,000 to $250,000 X 1% of total property value
From $250,000 up X 1.5% of total property value

Noval Scotia
Halifax Metro
1.5% on total property value
Outside Halifax County
Check with local municipality

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. Your agent can 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