Determine
what you can afford
• 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:
Typical One-Time Expenses Chart
| EXPENSE |
PAID |
| Mortgage Application
and Appraisal Fee |
At time of application |
| Appraisal Fee |
At inspection |
| Property Inspection
(optional) |
Closing |
| Legal Fees |
Closing |
| Legal Disbursements |
Closing |
| Deed and/or mortgage
registration |
Closing |
Property Survey
(sometimes provided by seller) |
Closing |
Land Transfer,
Deed Tax or Property
Purchase Tax (in Quebec within
3 months following signing) |
Closing |
Mortgage Interest
Adjustment and
Take Over Fee (if applicable) |
Closing |
| Adjustments for
Fuel, Taxes, etc. |
Closing |
Mortgage Insurance
(and application fee if applicable) |
Closing |
| Home and Property
Insurance |
Closing and on-going |
Connection charges
for utilities
such as gas, water and electricity |
Date of move |
| Moving Expenses |
Date of move |
Other costs may include landscaping, redecorating, furnishings, appliances
and repairs.
Typical monthly costs incurred with home ownership are
mortgage payments, maintenance, insurance, condo fees, property taxes
and utilities.The real estate market is always changing. It helps to
understand how market conditions can affect your position as a buyer.
At Big Sky RealEstate, we can provide you with current real estate market
conditions and explain their impact.
Understanding Market Conditions Chart
| Market Conditions |
Characteristics |
Implications |
Buyer's Market:
The supply of homes on the market exceeds demand. |
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. |
Seller's Market:
The number of buyers wanting homes exceeds the supply or number of homes on the
market. |
Smaller inventory of homes. Many buyers. Homes
sell quickly. Prices usually increase. |
May have to pay more. Make decisions quickly.
Conditional
offers may be rejected. |
Balanced Market:
The number of homes on the market is equal to the demand or number
of buyers. |
Demand equals supply. Sellers accept reasonable
offers. Homes sell within an acceptable time period. Prices generally
stable. |
More relaxed atmosphere. Reasonable number
of homes
to choose from. |
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 Real Estate Professional 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:
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.
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.
The Major Elements of an Offer
1. Price
Depending on the local market conditions, your opinion of value and market
information provided by your Royal LePage Real Estate Professional,
the price you offer may be different from the seller's asking price.
2. Deposit
The deposit shows your good faith and will be applied against the purchase
of the home when the sale closes. Your Royal LePage Real Estate Professional
can advise you on an appropriate amount.
3. Terms
Includes the total price offered and the financing details. You may arrange
your own financing or ask to assume the seller's mortgage, especially
if it has an attractive interest rate.
4. Conditions
These might include "subject to home inspection", "subject
to you obtaining financing", or "subject to you selling your
property".
5. Inclusions and Exclusions
These might include appliances and certain fixtures or decorative items,
such as window coverings or mirrors.
6. Closing or Possession Date
Generally, the day the title of the property is legally transferred and
the transaction of funds finalized unless otherwise specified (except
in Manitoba and Quebec). Note: In British Columbia the Possession Date
is legally 1 to 3 days after closing.
How to Make an Offer
When it comes time to make an offer,
your Big Sky Real Estate Professional
can provide current market information and will assist you in drafting
your offer.
Your Big Sky Real Estate Professional will communicate the offer,
sometimes known as an Offer to Purchase* 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. Big Sky Real Estate can
guide you through this process.
*Offer to Purchase: a legal document which specified the terms and conditions
of your offer to purchase the home.
The offer can be firm or conditional.
Firm Offer to Purchase: usually preferable to the seller, because it
means that 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.
Hire a Legal Professional
A legal professional is there
to represent your interests and to process the legal documentation required.
Your Big Sky Real Estate Professional can provide you with the names
of legal professionals who specialize in real estate.
The legal process differs from province to province. Your Big
Sky Real Estate Professional or legal professional will advise you on
the steps to be taken before the keys to your new home are presented
to you.
Have the Home Inspected
Buying a home is one of the most
important investment decisions you will make in your lifetime. As such,
it makes sound financial sense to enlist the services of a qualified
home inspection company to ensure your home is as solid and secure on
the inside as it is on the outside.
A home inspection will determine the structural and mechanical soundness
of your home. Your home inspector will identify existing and potential
problem areas, suggest practical low-cost solutions, and provide estimates
regarding costs for any work required. Shortly after the inspection has
taken place, a report summarizing the findings is generally provided
to the potential purchaser.
By commissioning a home inspection prior to purchase, you're protecting
both yourself and your investment, as well as buying a little peace-of-mind.
Home inspection costs often range according to size, age, and location
of the home. Your Big Sky Real Estate sales representative can
recommend a reputable home inspection service or arrange for a home inspector
to visit your property.
Some Moving Tips
You can choose to have the movers pack
everything, or just the breakables, or you can pack yourself. It's a
good idea to obtain estimates from several different companies.
If you own your present home:
• Arrange to have your gas, water, and electric meters read on the
day you leave and have the bills forwarded to your new address.
• Have your oil tank read and filled before your sale closes, and provide
a receipt to your legal professional if required.
• If the water heater or furnace is rented, arrange for a transfer
of the rental agreement to the purchaser.
• Disconnect your telephone, cable TV, and water softener.
If you rent your present home:
• Give necessary written notice to your landlord and make arrangements
for the return of any monies you have on deposit.
At your new home:
• Make arrangements for the gas and electric utilities, water softener,
telephone and cable TV to be connected on the day the sale closes.
General
• Get "Change of Address" cards from the post office
and send out well before moving day.
• Have the post office forward your mail to your new address.
• Cancel any contracted services and pre-authorized cheques.
• Inform gardening, dry cleaning, garbage pick-up, newspapers, magazines,
diaper and other home services. Arrange for service at your new address.
• Obtain a letter of introduction from your current branch to help
establish new accounts. Transfer trust or bank accounts and securities.
• Cancel or transfer social, athletic, civic, religious or business
affiliations and memberships.
• Arrange for transfer of medical, dental, prescription and optical
records.
• Change the address on your driver's license(s) effective the day
of the move.
• Collect all items out for cleaning, repair or storage. e.g. fur coats,
dry cleaning.
• Make special arrangements for the moving of perishables, such as
plants.
• Make special arrangements for the moving of your pets.
• Dispose safely of all flammable liquids as it is illegal for movers
to carry them.
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