For Buyers

Finding the right agent
You want to find the right home, in the right location, at the right price - and you want to do it quickly, with minimum hassle. The best way to do that is to work with a professional realtor who understands your wants and needs, your time frame and your financial boundaries.

Why work with an agent?

  • You’ll save time. An agent can pinpoint homes that fit your needs and dismiss those that don’t.
  • You benefit from an experienced negotiator. Your agent will manage your offers and counter-offers, ensuring that you get the best possible price for your home.
  • You’ll get the right information. Your agent knows the neighbourhood and can give you accurate information on local real estate values, taxes, utility costs, services and amenities.
  • You can always count on great advice. Because your agent is familiar with the entire home purchasing process, he or she can advise you of your legal and financial options, and recommend appraisal, home inspection and contracting services.

Choose an agent who understands your needs
Here are a few questions to ask to help you determine if an agent is right for you:
  • Will you be representing my interests?
  • Do you have access to MLS information?
  • Will you provide market evidence to support the price?
  • Will you look after closing and possession details?
  • Can you be contacted at any time?



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).


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 you’re in the wrong neighbourhood. 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 and dry cleaners will save you time.

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

  • Are there schools nearby? If you have children, the proximity and quality of schools is key. Some schools will provide data (i.e. average test scores) that can determine quality. Talking to neighbours with children can be helpful, too.

  • Is there good access to transportation? Living near public transport and/or major highways can 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 neighbourhoods appreciate faster than others. Research the selling prices of homes in over the past decade or so to predict future trends. Your agent may be able to provide helpful data.

  • Is it quiet? Listen for traffic noise, barking dogs, airplanes and any other noises that might bother you. Return to the neighbourhood 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 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.


Credit checks explained
A credit check is a routine part of qualifying for a mortgage. If you don’t have a good credit history, getting financing for your home can be a challenge.

Here’s how a credit check works:
Your personal credit history is compiled by credit bureaus, which create a credit report by collecting information from banks, retailers and other public records. The report generally goes back 6 or 7 years, and shows your credit and debit cards, bank accounts, personal loans, mortgages, etc. It shows creditors’ names, account numbers, current balances - and a detailed payment history. The report will also show public information like marriage, divorce, liens, judgments that have been entered against you, bankruptcy, etc.

The lender uses the credit report to determine whether they will lend you money. If they have concerns about something in the report, the lender will ask you for an explanation.

The lender will also use the report to verify other information on your mortgage application, like employment status and address (including the name of your landlord and perhaps rental payment history). They will also be able to see inquiries made by other creditors over the period of the report. (This information can be useful to a lender to show what other avenues of financing you might have tried and may raise questions about why another creditor declined to lend it to you.)

Honesty is the best policy
If you think there might be any credit problems, tell the lender up front and ask about their policies before you apply. There’s no point in trying to hide something that will show up in your credit history. Get a copy of your credit report before you apply for a mortgage - you may be able to avoid surprises and possible delays.

Take a look at your credit report
Because the report contains information about you, you have a right to see a copy of it. Equifax, one of Canada’s largest credit bureaus, will mail consumers a free copy of their personal credit file on request. For more information, call Equifax at 1-800-465-7166.

If you disagree with something in your credit history, you have the right to challenge it and ask that the information be corrected. For example, perhaps the report shows that you were over 90 days late paying a bill but does not indicate that you withheld payment pending a settlement of a dispute with the creditor. Or perhaps you were late with a particular payment because you were away. Whatever the explanation, contact the credit bureau to clarify the matter.


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 neighbourhood? If not, remember that moving away means you may have to build a new network of acquaintances, find a new doctor, get to know a new area, etc.
  • If you decide to move out of your neighbourhood, where would you like to go? A better neighbourhood 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?

Condos - less work, more rules
Short on maintenance and long on amenities, the condominium lifestyle is a favourite of empty nesters and retirees. Condominium apartments and townhomes are available in almost every neighbourhood and price range. Many offer pools, tennis courts and fitness areas - some even include golf courses. It’s an easy, hassle-free arrangement.

However, owning a condo means you’re governed by the rules and regulations established by the condominium board. Generally, these rules are necessary to ensure the enjoyment, safety and cleanliness of the building; when you’re doing your research, you may want to find out about the condo bylaws, especially if you have a pet.

Bungalows - small homes with big rewards
Bungalows offer the best of both worlds - a detached house and a yard, with less space to take care of. It’s a great way of preparing for the future, since living with fewer stairs makes it easier to get around should you slow down a little.

Retirement communities - a neighbourhood of friends
Adult lifestyle communities offer smaller homes, amenities often associated with condo living, and the opportunity to live with like-minded people. They tend to be resort-like in nature, and are built in rural areas that are close to large urban centres. Units range from apartments to detached homes. The focal point is the clubhouse, where you’ll likely find fitness facilities, tennis courts, games rooms and swimming pools. Some areas also feature golf courses.

If you’re not sure what option is best for you, please contact me. I’d be happy to talk to you about the possibilities that are available to you.


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.


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

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

Sellers’ market
The number of buyers wanting homes exceeds the supply of homes on the market.

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

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

Balanced market
The number of homes on the market is equal to the number of buyers.

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

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



Figuring out classified ads
Are you mystified by some of the abbreviations and terms that you see in newspaper real estate ads? Take a quick look at the list below, and you’ll sail through the classifieds.

air conditioning - a/c
apartment - apt
appliances - appls
bachelor - bach
balcony - balc
basement - bsmt
bathroom - ba, bath, bth, bthrm
bedroom - br, bed, bdrm
building - bldg
bungalow - bung
cathedral ceiling - cath ceil
central air conditioning - c/a
central vacuum - cvac, c/vac, central vac
condominium - condo
detached - det
double - dbl
exposure - exp
exterior - ext
family room - fam rm
fenced - fncd
finished basement - fin bsmt
fireplace - fpl
floor - fl
garage - gar
hardwood floors - hrdwd flrs
included - incl
kitchen - kit, kitch
large - lrg, lge
luxury - lux
parking - prkg
penthouse - ph
piece - pc
private - priv
renovated - reno, reno’d
room - rm
separate entrance - sep entr
solarium - sol
spacious - spac
storey - stry
subdivision - subdiv
suite - st, ste
townhouse - twnhse
wall to wall - w/w
washer/dryer - w/d
w/o - walkout (generally refers to basement)
workshop - wkshp
yard - yd, yrd


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.

For a risk to be covered, it has to have existed as of the date of the policy. As with any type of insurance policy, certain types of risks might not be covered. For example, native land claims and environmental hazards are normally excluded. Be sure to talk to your lawyer about the types of risks that may not be included in your policy.

The insured purchaser is protected against actual loss or damage sustained up to the amount of the policy, which is based on the purchase price. As well, some policies have inflation coverage, which means that if the fair market value of the property increases, the policy amount will also increase.

How long will I be covered?
Title insurance remains in effect as long as the insured purchaser has title to the land. Some policies also protect those who received title as a result of the purchaser’s death, or certain family members (e.g., a spouse or children) to whom the property may have been transferred for a nominal amount.

The premium for title insurance is paid once, at the time of purchase. In Canada, the purchaser generally pays for the title insurance, though there can be situations where the seller pays for it.

Protection and peace of mind
Title insurance can help ensure that a closing is not delayed due to defects in title. And if an issue arises, the title insurance covers the legal fees and expenses associated with defending the title and pays in the event of loss.