BUYING YOUR HOME IN CANADA

Purchasing property in a different country can be quite a daunting experience, however taking the following steps could make the process run smoothly.

• Have your mortgage pre-approved

Pre-approval is a system whereby the bank will guarantee your mortgage interest rate for a limited period; therefore it protects the buyer against the interest rate increasing. In the event of a decrease in the interest rates the buyer will receive the lower rate at the time of purchase. Speaking to a mortgage specialist will not only guarantee your rates but will allow you to discuss the various mortgage options available to newcomers to Canada.  It is very important to talk to an expert who is experienced in working with new immigrants because they will be aware of all the programmes available. Your Realtor, if they specialize in overseas relocation will have a resource list and be able to refer you to the appropriate person or agency. There is no cost to the buyer for this mortgage pre-approval.

A cautionary note: avoid choosing a mortgage/financial expert from the Internet without first having had a referral from a reputable person. Some buyers have unfortunately followed that route and found that a hefty “arrangement” fee was billed to them or the promise of a mortgage was made only to find it did not materialize and jeopordised the purchase of the home.

If you qualify for a mortgage there is no cost whatsoever to arrange financing

The pre-qualification process can be instigated prior to arriving in Canada. Once contact has been made with the mortgage company you can begin the application either on line, via fax., or e-mail.

• Choose your Realtor carefully

Ensure your Realtor has experience working with newcomers to Canada because the relationship with your Realtor is entirely different from that in Britain. In Canada your agent works very closely with you, represents you and works entirely in the best interest of you the buyer. You will be working very closely with your agent and should be confident in their knowledge and experience.

• Making an Offer

All offers are always in writing and prepared on legal documents by your Realtor who will guide and advise you. This Offer will state:

1. Purchase price (the amount you are offering)
2. Deposit (depending upon the cost of the house can range anywhere from $3,000 and upwards). Your Realtor will advise you what is appropriate. This deposit will be held in a Trust account until the completion of the transaction and will then be credited toward the purchase price of the home.
3. Inclusions, such as which appliances, light fixtures, window coverings etc. will be included in the sale are specified when the offer is submitted.
4. Completion date. This is the date you wish to take possession of the house.
5. Title search date. Your lawyer is given instructions in the Offer as to when the title search of the property is to be completed. This is usually two weeks prior to the closing date so that in the event any issues are found they can be dealt with in good time prior to the closing date without holding it up.
6. 6. Additional Clauses. Your Realtor will be adding additional clauses to the legal document in order to ensure your protection. There are two clauses which should always be inserted: Conditional upon Financing. Even if you have been preapproved and know you will get a mortgage this clause should always be in the Offer to ensure that the financial institution can organize their paperwork and collect documentation to guarantee the mortgage. The time period for this condition is usually between three and five business days. Conditional upon Building Inspection. The building inspection is not tied in with the mortgage but is requested and paid for by the buyer for the buyers own peace of mind. This condition usually runs for the same number of days as the financing condition.

It is the responsibility of your Realtor to present this offer to the seller via the seller’s representative. All negotiations and counter offers are done in writing on the document which has been submitted. Once everything has been agreed and signed off then that is essentially the exchange of contracts. The time frame for this exchange can be just hours from making the offer!

1. Forwarding of documents. Once the exchange has taken place the Realtor forwards all documents to the appropriate parties such as the lawyer and financial institution. Your Realtor will also coordinate the building inspection and ensure all conditions are met within the time period stated in the Offer.

1. Move into your home! The offer because it is a legal process is absolutely firm and binding by all parties. There is absolutely no gazumping, therefore you can plan your move with the confidence that it will close on the chosen day as planned.

For more details please contact Renate Penkett at 001 416 816 4827

rpenkett@cogeco.ca