Buying a home will likely be your biggest and most important investment. The key is to do your homework in advance, and enlist the right people to help you along the way. The following are a few tips for the prospective purchaser.
Finding a Real Estate Agent
A good real estate agent is essential to the purchase of your home. Buyers do not pay commission, this is paid by the seller. It is important that your agent knows and understands what you want, how much you want to pay, and ultimately that they have your best interests at heart.
When choosing an agent, select someone that you feel comfortable with, keeping in mind that experience and knowledge about the legalities of transactions is key.
It is wise to get pre-approved for a mortgage before you shop around for a property, so you know how much you will qualify for and what you can spend.
If you have a relationship with your bank, this is a good place to start shopping around for a mortgage. Call all your local banks, to ask what the best rate they can give you for a mortgage. Mortgage brokers can also provide great service. Be very wary, some charge a great deal of money for brokering a deal. A good broker often won’t charge a fee as most lenders pay mortgage brokers directly for bring them business, so a broker who charges a fee to the client may be double dipping. When searching for a broker, ask about fees up front, and be sure to read the fine print of anything you sign, to ensure that you know what, if anything, you will have to pay.
Before Signing An Offer To Purchase
An offer to purchase is a contract binding on both the buyer and the seller. Consulting a lawyer before you sign that offer can help avoid difficulties later on, and ensure that your best interests are protected.
Finding a Lawyer
Lawyers’ fees on real estate transactions are usually based on a flat fee, plus disbursements, which are costs incurred by your lawyer in the completion of your transaction. For example: title search, search of executions, tax search, title insurance, Land Transfer Tax, registration fees, photocopies, faxes, couriers and file storage fee. When shopping around for a lawyer, be sure to get a specific quote as to fees AND disbursements, and ask what is included in your quote. The best way to find a good lawyer is a good referral from someone you know. Failing that, call around and interview your potential lawyers to find one that seems honest, knowledgeable and accessible. In this case, the cheapest is not always your best option.
You need to plan for extra closing costs such as Land Transfer Tax, lawyer’s fees and disbursements, and amounts that you will have to pay the vendor for items such as heating oil, prepaid utility bills and taxes – none of which are included in the purchase price. When buying a new construction, be aware that there are several additional costs usually imposed on the buyer by the builder at closing. These additional costs, called adjustments, are not usually disclosed to the Buyer at the time of purchase, but rather, the lawyer gets a statement only a few days before closing. These can cost anywhere from $2,000 to $5,000. It is vital to budget accordingly.
These tips should help you get started, and your lawyer will help guide you through the legalities of your transaction between purchase and closing. Feel free to browse our website for more information on Buying and Selling a Home.