Dealing with Real Estate | Home and Castle Law Firm

Purchasing a Home

1) Personal Evaluation:

2) Mortgage Pre-Qualification:

3) Personal Budget:

evaluate your expenses and set a budget for what you can afford for living costs per month
take into consideration your monthly mortgage payment, heat, hydro, property taxes, home insurance, condo fees and property maintenance

4) Engage a Real Estate Agent:

an Agent can assist you in locating properties that meet your needs; set up appointments for viewing properties; provide information regarding neighbourhoods; advise of property values and assist in the negotiations with potential sellers

5) Make an Offer:

if you have engaged a real estate agent they will prepare the Agreement of Purchase and Sale (the Offer)
most offers contain conditions which are beneficial to the buyer
the most common are conditions on buyers obtaining suitable financing; having the property inspected by a qualified Home Inspector and obtaining adequate insurance coverage on the property
you should consider having the Agreement reviewed by a lawyer

6) Obtain a Home Inspection:

hire a qualified/certified home inspector to inspect the property
home inspectors generally inspect the roof, foundation, basement, heating and cooling systems, plumbing and electrical and advise of indications of mould and pest or termite damage

7) Secure Your Financing:

revisit your financial institution or mortgage broker to obtain your Approval of Mortgage
at this time they will verify your financial information and complete the mortgage application based on the specific property
When arranging your financing you should take into consideration things like closing costs including Land Transfer Tax, legal fees & disbursements, title insurance, any CMHC fees or insurance premiums or appraisal costs which will be deducted from your net mortgage advance and closing adjustments (for things such as property taxes, heating costs, water, and condominium fees, if applicable)

8) Engage a Lawyer:

a lawyer is required to handle the closing of real estate transactions in the Province of Ontario
the lawyer will review your Agreement of Purchase and Sale
search title to the property and submit requisitions on title to the seller’s lawyer
prepare and/or review all documents pertaining to the purchase ie: vendor closing documents, bank financing documents, statement of adjustments, Transfer, etc.
arrange for the purchase of title insurance, if applicable
search for arrears of property taxes, search for outstanding work orders and building permits, survey compliance, zoning, if applicable
meet with you to explain and execute closing documents and answer any questions
register all documents on title
report to you and any financial institution with the details of the transaction

9) Closing Considerations:

you will need to arrange for property/fire insurance coverage with an insurance agent or broker
determine what accounts will need to be set up for the property for gas, hydro, cable, internet, telephone, etc., generally your lawyer will provide you with a list of the service providers for you to set up these services
arrange to have funds available a few days prior to your closing date to provide to your lawyer for the balance of your down payment, fees, disbursements, Land Transfer Tax and any adjustment amounts due on closing
when calculating the amount of funds you will need to have available on closing ensure to include costs of moving expenses, account set up fees and/or deposits required for new accounts and higher than expected adjustments on closing

10) Plan for Unexpected Circumstances:

always have a backup plan and make alternative arrangements should you be buying and selling on the same day or ending a rental lease on the same day as your transaction is closing
sometimes unforeseen circumstances occur, such as delays in receipt of mortgage funding, late closing of your sale property, and can delay the closing of your purchase transaction
if you have to move out of a rental property on the same day, but are unable to close on your purchase this could leave you having to look for a place to stay with all of your belongings until the transaction closes, to avoid this situation it is best to schedule the closing of your purchase a few days prior to the ending of your lease
if you have a property to sell before you can purchase it may be wise to arrange a loan from your financial institution (referred to as a “bridge loan”) which would provide you with the funds you require to close your purchase without having to wait to close your sale
a bridge loan would allow you to purchase your new property a few days in advance of your sale which would provide you with additional time for the moving process
always budget a little higher than recommended for your closing costs – sometimes there are unforeseen costs that cannot be accounted for in advance of the transaction, it is always better to have the extra funds than not enough

1) Prior to Listing Considerations

will you sell the property privately or hire a real estate agent to assist you in the process
what is the balance owing on any existing mortgages or secured lines of credit
what will the bank charge you if you are paying out your mortgage prior to the Balance Due Date

2) Valuation of your Property

prior to listing your property for sale you should have your home appraised by a professional either a real estate agent or a real estate appraisal

3) Benefits of Hiring a Real Estate Agent

they will give you tips on how to make your home more appealing
they will handle the advertising of the property for sale
field all calls regarding the property and arrange and conduct showings of the property
assist in the negotiation process

4) Engage a Lawyer

your lawyer will review your Agreement of Purchase and Sale
respond to the purchaser’s requisitions of title issues
prepare and/or review all documents pertaining to the sale ie: vendor closing documents, statement of adjustments, Transfer, etc.
receive all closing funds from the purchasers lawyer on closing and arrange for the payout of any existing mortgages or liens registered on title to the property or outstanding property taxes
meet with you to explain and execute closing documents and answer any questions

5) Closing Considerations

arrange to cancel your property/fire insurance coverage effective the day of closing
contact utility companies to arrange for final meter readings and to arrange for payment of final accounts

10) Plan for Unexpected Circumstances:

always have a backup plan and make alternative arrangements should you be selling your property the same day you are purchasing another
sometimes unforeseen circumstances occur, such as delays in receipt closing funds from the purchasers lawyer which can delay the closing of your transaction
this can leave you in a situation where your lawyer is unable to close your purchase transaction on the same day and you are forced to move out of the property you are selling but are unable to move into the property you are purchasing
if you are planning on purchasing a property it may be wise to arrange a loan from your financial institution (referred to as a “bridge loan”) which would provide you with the funds you require to close your purchase without having to wait to close your sale
a bridge loan would allow you to purchase your new property a few days in advance of your sale which would provide you with additional time for the moving process