Here is a step by step guide to help you understand the process! If you have any questions, don’t hesitate to email us at email@example.com or call us at (613) 233-7000.
STEP 1: GET MORTGAGE APPROVAL
Contact your bank or a mortgage broker.
While your bank will only offer you its rates, a broker will often be able to offer several rates as he/she usually deals with several lending institutions. Brokers will seldom charge the borrower (you) a fee. Their fees are received directly from the lender.
STEP 2: GET A REAL ESTATE AGENT
A buying agent will seldom charge on the purchase of a home. However, he/she can offer a great deal of help in the purchase of your home. Through the use of his/her expertise, the agent can help you identify your needs as well as your criteria for the purchase of your home. Furthermore, they can often offer you daily update on new listings matching your criteria and needs: allowing you more time to weight your options.
STEP 3: THINK ABOUT YOUR OBJECTIVES
Before heading into the real estate market take the time to think about what you are seeking with your purchase. Ask yourself the following questions:
What is the purpose of my purchase? Investment property, primary home, starter home, etc.
Who will I be purchasing the property with?
On my own, with my spouse, with my partner, with my parents, with a friend, etc.
What is your maximum price?
Often, a lender may approve you for more than you require. Henceforth, you need to ask yourself: what is the price you are prepared to pay. In doing so, you should think of the long-term consequences and ask yourself: if the mortgage rates climb, will I still be able to afford this property upon renewal of my mortgage.
Often these questions will be discussed with your mortgage broker or real estate agent. However, if they are not, these are factors that should be consider.
STEP 4: GO SHOPPING!
Once, you’ve identified a property of interest, go see it. Your real estate agent can arrange viewings.
Once, you’ve seen the property…get feedback! For this, your real estate agent may be your best friend and greatest asset: he/she sees houses on daily basis and, will be able to help you identify the pros and cons of each home!
Fall in love! You’ll be living in your home for an extended period of time, make sure you love it.
STEP 5: MAKE AN OFFER
You’ve falling in love with a home, then it’s time to draft an Offer to Purchase!
If you have an agent, he/she will be able to prepare your Offer to Purchase for you. However, if you do not have an agent, OREB’s standard forms are available on the internet. You can also contact a real estate lawyer to review or prepare this document.
WHAT SHOULD YOUR AGREEMENT INCLUDE?
Protect yourself! If some uncertainties remain to complete, be sure to include conditions for such in your Offer to Purchase and Agreement of Purchase and Sale.
The most common conditions to be included are:
obtaining financing (if not already done);
obtaining a satisfactory home inspection;
obtaining a satisfactory status certificate (if property is a condominium);
being granted permission to enter the premises prior to closing;
ensuring that the property is in broom sweep condition on the day of closing.
If you have not include a condition in your Agreement of Purchase and Sale, it will not be enforceable at a later date.
When drafting your Offer to Purchase and your Agreement of Purchase and Sale, you should make sure that all the purchasers are clearly identified.
In drafting your Agreement of Purchase and Sale, try to include a requisition date that is 3-4 weeks prior to close. In doing so, you providing more time to your lawyer to ensure that your title is proper and safe.
STEP 6: HIRE A LAWYER
Your Offer has been accepted! If you haven’t hired a lawyer, now is the time to do so.
There are hundreds of real estate lawyers in the City of Ottawa. How do you pick a lawyer?
Inquire about their fees and disbursements. When inquiring ask what their fees included and excluded. All transactions include disbursements. Disbursements are fees paid out to third parties to close your real estate transaction. These fees will generally include:
Registering documents on title $142.60;
Obtaining an Abstract of Title $150-$250;
Obtaining Title Insurance Policy $189 -$378;
Obtaining a Tax Certificate $72.50;
Obtaining Sheriff’s Certificates $11 each;
Obtaining a Status Certificate, if applicable $100;
Certified Cheques and Courier Services $60-$70.
Make sure the price quoted by your lawyer includes his total fees and disbursements or a breakdown of what fees are and are not included.
Your lawyer is the protector of your interest.
His/her functions include:
reviewing your title searches;
ensuring that your mortgage conditions are meet;
reviewing your status certificate, if applicable;
advocating to have defaults on your purchase be correct prior to closing;
ensuring that you have an understanding of your obligations and rights;
transferring the ownership of the title.
STEP 7: YOUR RESPONSIBILITIES AS A CLIENT
You need to provide your lawyer with instructions on how you would like to take title:
Name: John Robert Smith;
Birth Date: April 1, 1960;
Spousal Status: Single;
Home Buyer Status: First Time.
You need to ensure that all your mortgage financing conditions have been completed. Your mortgage broker and/or real estate will usually provide you with said conditions.
Example: Pay stubs, confirmation of employment, etc.
You need to ensure that you have adequate home insurance in place for your dwelling (i.e. loss payable to your mortgage company). Your transaction will not be able to close without the proper insurance. This does not apply to the purchase of a Condominium.
You need to ensure that you have contacted the utility providers for your home and confirmed your change of address and/or set up your account. Your lawyer can send out a letter to your tax, water, hydro and gas agents to notify them of the change in ownership. However, your lawyer cannot bind them to change such information.
STEP 8: MEET WITH LAWYER
Many clients will hire their lawyer over the telephone and complete the requirements of their transaction over the telephone and e-mail. Nevertheless, prior to closing, it will be required that you meet with your lawyer to sign documentation.
On the date of your meeting or prior to such, you will need to provide your lawyer with the following information:
proof of your home insurance: loss-payable;
proof of identity by two pieces of identification (excluding health card);
the balance required on closing by certified funds.
During the meeting, your lawyer will review and sign with you the necessary paperwork to close your transaction, including:
an acknowledgment and direction regarding the transfer of title and mortgage;
a direction regarding the mortgage funds;
an acknowledgement of the standard charge terms;
a purchaser’s undertaking to readjust;
a direction regarding the title;
an acknowledgement of title insurance;
a land transfer tax affidavit;
a land transfer tax refund affidavit (if applicable).
STEP 9: CLOSING DAY
On the day of closing many events occur prior to the receipt of your keys, including:
your lawyer will receive your mortgage funds and your funds;
your lawyer will write the appropriate cheques for closing and have them certified;
your lawyer will courier your signed documents and cheques to the other lawyer;
the other lawyer will courier their clients documents and keys to your lawyers office;
once each lawyer has the required documents, the Transfer of Title with be signed and your lawyer will register the Transfer and Mortgage;
your lawyer will notify all parties that the transaction is completed and that your keys are ready.
Consequently, in planning your move, you should always consider that your transaction may take until the end of the business day to close.