To assist you in your purchase we have provided some useful explanations regarding common elements of the purchase of a resale home which are intended to help us serve you more efficiently and make your transaction more understandable to you.
Specific topics covered below include:
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It is generally a good idea to select a real estate agent who works in the area in which you intend to buy. Although multiple listing services give realtors access to information in relation to properties over a wide geographic area, there are advantages to selecting a local realtor. A local realtor will be aware of properties generally more quickly than they appear on the multiple listing service. The realtor will be more familiar with places and general availability of similar properties. Most importantly, the realtor will be more likely aware of any problems and issues of the area in which you intent to purchase and possible if there are any specific problems or issues in relation to the property you are buying, the realtor may be aware of those.
You should have a lawyer review the Agreement of Purchase and Sale before you sign it. The realities of the offer process are such that it is sometimes difficult or impractical to have the offer reviewed by a lawyer before you sign it. Although we can usually review your offer within several hours of receiving it, if your offer is being put together on an evening or weekend and we are not available, you can put a Lawyer’s approval condition in the offer. This is a clause in your offer that makes the offer conditional upon your lawyer reviewing and being satisfied with the terms of the Agreement of Purchase and sale.
Generally it is a good idea to obtain a survey when you are purchasing a home. Title insurance is available and many Banks and Mortgage Companies will accept Title Insurance in place of a Survey. Often a vendor will have a survey of their property, but the survey may not be completely up to date.
You should insert a clause in your offer which requires the vendor to provide a new survey or a current survey of the property. If the vendor wants to provide you with an existing survey, you should see the survey before you agree to accept it to make sure that it depicts all the important improvements to the property. A survey does not have to be brand new in order to be current. A survey that is 5, 10 or 15 years old, it can still be current if there are no further improvements to the property or no new improvements to the adjacent properties that are close to the lot lines.
If you mortgage exceeds 75% of your purchase price, it must be insured by the Canada Mortgage and Housing Corporation (CMHC). This is not life or disability insurance. This is insurance for the financial institution in case the borrower does not pay the mortgage. The CMHC insurance fee is a percentage, which increases with the percentage of your financing.
The amount of the CMHC insurance fee is added on to your mortgage. There is sales tax (HST) that is charged on the CMHC insurance fee. This amount is not added onto the mortgage, and it is generally subtracted from the mortgage advance made by the lender just before closing so it is money that you need to bring in to us when you come to sign your closing documentation. There is also CMHC application fee. This is also not added onto the mortgage.
Title insurance companies give you an insurance policy in relation to the title to your property and certain other related matters. If a survey is not available for the property you are purchasing instead of obtaining a survey, you may obtain title insurance. Title insurance does not identify and correct any problems with surveys, title and the other related issues that are insured against. Insurance covers any cost that you might incur as a result of any problems that are later ascertained in relation to title, survey, etc.
Many title insurance companies will offer to loan you the money to cover your closing costs for a short period of time following closing. For a small fee, the title insurance company will give you several months to cover the closing costs if your budget does not allow you to come up with all of the necessary funds for closing.
Feel free to contact us at any point for assistance or advice with respect to Real Estate law. We may be reached at 705.435.4339 or contact us via email .