faqs

What are the costs of purchasing a home?

Purchasing a home involves one-time costs and monthly expenses. The largest one-time cost is the down payment. It usually represents between 5-25% of the total price of the property.

In addition to the actual purchase price, there are a number of other expenses that you might be expected to pay for. These are listed below:

What are Market Conditions?

The real estate market is always changing. It helps to understand how market conditions can affect your position as a buyer.

Your agent can provide you with current real estate market conditions and explain their impact.

Buyer's Market

The supply of homes exceeds the number of buyers (supply is greater than demand). In this market, prices tend to drop and the homes stay on the market longer. Thus your home may take longer to sell and you will have less negotiating power in terms of the selling price. Fortunately, you will be in the driver's seat when making an offer on your next home.

Seller's Market

The number of buyers exceeds the number of homes on the market (demand greater than supply). In this market, prices are increasing and homes sell quickly. As a seller, you will probably have more negotiating power and obtain a higher selling price for your property. Unfortunately, you will be on the other side of the fence when purchasing your next home.

Balanced Market

The number of homes on the market is equal to the number of buyers (supply equals demand). In this market, prices are stable and homes sell within a reasonable period of time. It is a calm atmosphere with buyers having a satisfactory number of homes from which to choose.

Why do I need a Pre-Approved mortgage?

Having a pre-approved mortgage will give you the confidence of knowing exactly what you can spend on a home before you start looking. You will also be protected against interest rate increases while you look for your new home.

Your Mortgage Specialist will answer your questions and help you determine which financing terms and options are right for you. Your Mortgage Specialist and I work as a team to help you find the right home and select the best financing.

Finalizing Your Mortgage

Once you've found the home you want to purchase, there are some documents you'll probably be asked for in order to finalize your financing. They will include:

• 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.
• A copy of the offer to purchase or the building contract, if this document has been prepared.
• Documents to confirm employment, income and source of pre-approval.

If you have a pre-approved mortgage, it's a simple matter of finalizing a few details which your Mortgage Specialist will explain to you.

What are the elements of an offer?

There are six key components to the elements of an offer. They are:

Price

Depending on the local market conditions and information provided by me, your Real Estate Professional, the price you offer may be different from the seller's price.

Deposit

Your deposit shows good faith and will be applied against the purchase of the home when the sale closes. As your Real Estate Professional, I can advise you on an appropriate amount.

Terms

Includes the total price offered and the financing details. You arrange your own financing or ask to assume the seller's mortgage, especially if it has an attractive interest rate.

Conditions

These might include "subject to home inspection", "subject to you obtaining financing", or "subject to you selling your property".

Inclusions and Exclusions

These might include appliances and certain fixtures or decorative items, such as window coverings or mirrors. These items would remain in the house.

Closing or Possession Date

Generally, the day the title of the property is legally transferred and the transaction of funds finalized.

What is homeowner's insurance and do I need it?

When you purchase a home, consider how you will protect your investment.

Most mortgage lenders insist on fire insurance coverage 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 or broker for professional advice on home insurance.

Mortgage Life Insurance

Mortgage life insurance (MLI) is inexpensive coverage on your life which protects your family or beneficiaries by paying off your outstanding mortgage in the event of your death. For just pennies a day, you will have peace of mind knowing your beneficiaries will be mortgage free. MLI premiums are based on two factors: your age and mortgage amount. Your premium is added to your mortgage payment so there's no extra paperwork, and it remains the same until your mortgage is paid off. Joint coverage for spouses is also available.

Disability Insurance

Disability Insurance is important if your mortgage payments depend entirely or in part on your income. Disability insurance provides replacement income if an accident or illness prevents you from working.

Job Loss Mortgage Insurance

Recently insurance companies have started to offer Job Loss Mortgage Insurance. This insurance covers the mortgage payments in the event that you involuntarily lose your job.

Why hire a legal professional?

A legal professional is there to represent your interests and to process the legal documentation required. As your Real Estate Professional, I can provide you with the names of legal professionals who specialize in real estate.

The legal process differs from province to province. Your lawyer will advise you on the steps to be taken before the keys to your new home are presented to you.