Home Buyers Guide

Home Buyers Guide. Why use a Realtor®?

The majority of real estate transactions take place with the assistance of a real estate agent and for good reason. Working with a professional real estate agent is the most efficient means of shopping for a home and can help make the home-buying process an easy, hassle-free experience.
A Realtor® can help you assess your wants and needs to find the perfect match between what you can afford and the home that best suits your preferences.

Committing to working with one Realtor® is usually the best. There are several reasons for this: Firstly it will save you time and frustration. 90% of the homes for sale in Vancouver are available through the Real Estate Board of Greater Vancouver MLS system; all Realtors® have access to this information. By working with several Realtors® you will be covering the same ground several times and because one Realtor® will not know all the homes that you have seen you will have multiple appointments at the same properties. The second benefit to loyalty to one Realtor® is that your Realtor® will begin to know your personal style and tastes and will then be qualified to sort out homes that will not interest you.

“For Sale” signs and newspaper ads are not always a true reflection of everything that is on the market. By networking with fellow Realtors® quite often homes are sold before the general public is aware. Once you find properties that you are interested in, we will check them for any registered title deficiencies or charges that might affect the future use of these properties. We will check any registered easements, liens, electric and gas companies right of ways, encroachments, restrictive covenants, waterfront leases, building orders, legal notifications, latent defects, riparian and heritage limitations, previous marijuana grow-op and meth lab operations, vermiculite/asbestos, underground oil tanks, peat bogs, floodplain and landslide areas, leaky condos, approved or upcoming strata special assessments and levies. We will research and provide the relevant information to you and you will decide if you want to view the property. After viewing the property, if you like it, we will pull out all recent comparable sales in the area, so you will be aware what other buyers were willing to pay for similar properties. Then we will write an offer and present it to the Seller. Our negotiating experience will work for you to get you the best possible price and terms. Your Realtor® works for you and respects your opinions. He or she will not try to force you into a decision you don’t feel comfortable with. We strongly believe that our job is to supply you with all the information you need to make your own decision. Our services are absolutely free to you as a buyer; commission is paid by the Seller.

The Offer to Purchase. Home Buyers Guide. 
When you have found your new home, it’s time to make an Offer to Purchase. The Offer form is standard and will help lay out the terms and conditions of your purchase. Of course, every purchase is different, and the Offer to Purchase will vary accordingly. Never assume anything when making an Offer – if something was verbally stated and you want that included – make sure it is on the form. I have a standard “Addendum” to attach to all Offers to Purchase that will help to close some of the “loopholes” in the standard agreement.
Basic terms include a Completion Date, deposit amount, balance of down payment amount, a list of chattels included, any exclusions, total price additional terms and conditions. A condition is a “subject to a clause” meaning that the Offer is made subject to the Buyer’s approval of or being approved for something or possibly the confirmation of a detail pertinent to the Offer. Conditions can be for the benefit of either the Buyer or the Seller although they are usually for the Buyer. Conditions may include mortgage approval, professional inspection or any other of a number of items that may be critical to a transaction. Sometimes (especially when you buy a pre-sale property from a developer’s sales office) a deposit cheque will need to accompany your Offer.
Once the Offer to Purchase form is completed, your Realtor® will need to present it to the Sellers. It is sometimes best to go and wait in your Realtor’s® car or be on standby while the presentation is made. That way, if questions need to be answered you are available immediately. Upon presentation, the Sellers will have a few options. They can accept and sign your offer, they can reject it, or they can make changes to it and return it (make a counter-offer). If they reject your offer you can decide to find another house or submit another offer. If they counter your offer you can either accept the counter-offer by initialling the changes or you could further counter their offer by making additional changes and sending it back to the Sellers. An offer can be countered several times before final acceptance. Remember that there is no obligation for the Seller to accept or counter you offer. They can always reject it without making a counter-offer. At any point, either party has the right to terminate negotiations. Do not change an offer without careful consideration. Once a change is made the offer is voided and must be initialled to be valid once again.
After acceptance of the offer, if there is an initial deposit, it must be deposited to the Real Estate Company’s trust account within 1 business days of the acceptance. The deposit is “earnest money” that will hold the home until you actually move in. If the Offer to Purchase is not accepted, your cheque is returned immediately. In most cases, you don’t need an initial deposit on acceptance of your offer. Instead, a deposit of 5% of the agreed purchase price, in the form of bank draft, is due when all conditions are removed (usually in a week after the acceptance date) and the offer becomes firm.

Once you have an accepted offer, immediately begin to follow any conditions of the agreement that require action on your part. Conditions have definite deadline dates associated with them, and if you miss a date, you may have to arrange for an extension, which a Seller is not obligated to grant. A missed condition date could mean losing the property. As each condition is met, your Realtor will have you sign a “waiver”. This document states that the condition has been satisfied and is no longer part of the agreement. Waivers and the 5% deposit bank draft must be delivered on time, usually prior to 9 p.m. on the final Condition Date.
A copy of the signed Offer to Purchase is sent to the Real Estate company’s office and to your lawyer after all conditions have been removed. The lawyer will begin the process of structuring the transaction and preparing documents to register you as owners as well as your mortgage on the title of your home.
Contact your lending institution and have them begin the process of finalizing your mortgage documents. Confirm with the bank that your lawyer will draw up the documents.

Mortgage Pre-qualification. Home Buyers Guide.

This is usually a good place to start. It’s a good idea to organize and write down any questions you may have before your meeting. Your loans officer can be a great source of information. One thing you must be aware of though is that this is just what it says it is and no more. It is a “pre”-approval. The financial institution will only “crunch” the numbers with you and review the actual approval process. The bank usually will not check references, credit ratings or take employment letters on file. But this will help to set the boundaries for the budget of your new home. (Keep in mind that the bank will often lend more money than you are comfortable borrowing.) Request a letter stating what you qualify for. It can be a valuable tool later when making an offer on a property.

Applying For a Mortgage. Home Buyers Guide.
The following is a list of what you will need for the actual application. The “pre” qualifying process is only preliminary; once you have found your new home the process becomes more detailed. You will need to work with your lender to complete the application procedure. You will need to arrange for the following:
-Ask your employer for a letter confirming your employment. This should include your position, a number of years with that employer, your prospects for the future with the company and your current salary, wage or anticipated earnings. Photocopies of your T-4 slips for the past few years are also helpful.
-Make a list of your assets (cars, even if you owe money on them, stocks, savings accounts, bonds, etc.); include their present estimated value (and location, where appropriate); add up the total dollar amount of assets held.
-Make another list of your liabilities (car loans, student loans, credit card balances, etc.); include the current balance owed, the name of the party to whom you owe money and account numbers; add up the total dollar amount of liabilities. Subtract your total liabilities from your total assets to determine your net worth.
-Itemize the source(s) of your down payment, giving account numbers where appropriate. The lender will need to verify that you have these funds before granting the mortgage. If you borrow a portion of the down payment from family or friends, the lender will want to know how you intend to pay back the loan. If there’s a payment involved, it may be used in calculating your debt-service ratio.
-Meet your mortgage specialist with your social insurance number, chequing account information and contact information for your lawyer. Your co-applicant should bring similar information and be present when you visit the lender to fill out the application.
-Bring a copy of the listing details of your new home and a copy of a current survey or Real Property Report, if available. If you have a completed Offer to Purchase, bring it, too.
-Be sure to tell the bank who your lawyer will be. You want a lawyer looking out for your interests first, not the banks. Your lawyer will register their mortgage and be sure title is in order for the bank. You need to tell the bank, so you don’t end up paying for two lawyers.

After you are approved personally, the lender will need to verify the value of the house, and will usually need to have it appraised. The appraised value is an independent expert’s estimate of the market value of the house. This will hopefully be close to the price you’ve agreed to pay, but it may not necessarily be the same. When calculating the maximum size of a mortgage the lenders will issue against a property, it will be based on the appraised value or the selling price, whichever is less.

Your Lawyer. Home Buyers Guide.

Be sure to select a Lawyer or a Notary Public properly. Although price should be a factor do not let it rule your decision. You will get what you pay for! I’ve had clients use bargain basement lawyers and everything has gone fine, but be prepared for minimal service. Usually, you will not even meet your lawyer, only his assistant. The assistant often times will point to where your signature is required and that’s about it. It can be O.K. if you are very comfortable with the process and if there are no problems. We’ve found that the large firms definitely have real estate specialists but they usually work only within a narrow field and they are not usually too interested in a home purchase transaction. That is the attraction of a large firm – very specific advice and quality counsel, and believe me, you pay for it. Usually, the best lawyer is in a small to medium-sized firm and is well versed in real estate transactions.

What your lawyer will do. Home Buyers Guide.
Your lawyer will contact the Seller’s lawyer with any questions or issues regarding title and costs that have to be resolved before closing can take place. The lawyer will also ask you how you want to be registered on the title to the property.
You should contact utilities, phone and cable companies to have services put in your name and confirm that the Seller has arranged for final meter readings. If the Seller has not, notify your lawyer.
Meanwhile, your lawyer will be busy gathering a number of different reports, certificates and clearances from various offices. The lawyer will be making sure that property taxes on the house are up-to-date, and that any caveats or liens (outstanding obligations) registered against the property are satisfied and removed from the title. Your lawyer will make sure that what you’ve agreed to buy is what you’ll get – nothing more and nothing less.
Your lawyer will review & verify the title transfer documentation, prepare a statement of adjustments, review other closing information provided by the Seller’s lawyer and help you deal with any problems if they arise.
One to five business days prior to closing, you’ll meet with your lawyer to review and sign the closing documents. Bring certified cheque(s) with you to cover the costs involved. Your lawyer will let you know what the amounts are before your meeting. If your cheque is not certified, it could easily hold up the transaction.
Note: When you are buying a house, make sure you arrange for house insurance prior to your meeting with your lawyer. If it is not in place on the closing date, the mortgage will not be funded to complete your purchase.

Flowchart of a typical home purchase. Home Buyers Guide.

For each step of the process refer to your Home Buyers Guide.

1)The buyer obtains mortgage pre-approval.
2)The buyer makes offer to purchase property.
3)Seller accepts Buyer’s offer to purchase.
4)Condition removal process: (typical)
-Confirmation of Buyer approval
-Home inspection – – waiver
-Appraisal of property
-C.M.H.C. approval – – waiver
-Reviewing and approving all required documents regarding the property — waiver
5)Deposit placed “in trust”.
6)Unconditional offer delivered by Buyer’s Realtor’s office to lawyers for Sellers and Buyers.
10 to 14 DAYS AFTER OFFER IS ACCEPTED
7)(Buyer) instructs his lawyer how to complete title description.
2 / 3 WEEKS BEFORE CLOSING
8)Instructions to prepare mortgage delivered by the bank to the Buyer’s lawyer.
9)Seller’s lawyer obtains the description and prepares transfer for execution by the Seller.
10)Seller(s) execute transfer.
11(Buyer) Mortgage documentation prepared.
11(Seller) Transfer of land delivered to Buyer’s lawyer under trust conditions
12)(Buyer) executes the transfer, mortgage and delivers cash difference (balance owing)
plus fees and adjustments to Buyer’s lawyer.
5 TO 10 DAYS BEFORE CLOSING DATE
13)Balance owing forwarded to Seller’s lawyer.
14(Buyer) Transfer and mortgage documents forwarded to Land Titles Office for registration
14(Seller) Seller’s lawyer receives balance owing and holds “in trust” pending completion.
15(Buyer) Registration of transfer and mortgage obtained – the title is now in Buyer’s name subject to the mortgage.
16(Buyer) Buyer’s lawyer requisitions mortgage funds and forwards same to Seller’s lawyer “in trust” that any unacceptable title encumbrances be removed
16(Seller) Seller’s lawyer receives mortgage proceeds holds “in trust” pending completion.
17(Buyer) Seller’s lawyer advises Seller’s Realtor of the release of keys to Buyer. (Sometimes prior to lawyer receiving mortgage proceeds.)
18(Buyer) Copy of acceptable title, in Buyer’s name, delivered to Buyer’s lawyer
18(Seller) Seller’s lawyer obtains a discharge of encumbrances and reports to Buyer’s lawyer. Pays out Seller’s mortgage if any.
19(Buyer) Buyer’s lawyer reports to the financial institution
19(Seller) Seller’s lawyer reports to Seller: accounts for funds received and releases funds to Seller.
20)Buyer’s lawyer reports to Buyer.
The transaction is complete.

Additional Costs of Buying Your New Home. Home Buyers Guide.
*Actual amounts may vary. Refer to each relevant section of this Home Buyers Guide
Bank Application Fee
($75) It costs lenders money to process your application, and some will pass it on to you. Some lenders will waive this fee.
CMHC Application Fee
($95) For high ratio financing
Appraisal Fee
($170) Someone on the lender’s staff or by an outside professional does the appraisal.
Mortgage Broker Fee ( most brokers won’t charge a broker fee)
If any, usually payable at the time of closing, although some brokers require the fee up front.
Real Property Report (Survey) Fee – (if require, doesn’t apply for apartments and townhouses)
($400) The Seller might have an old R.P.R. , which might be accepted by the lender. It confirms the property’s boundaries and makes sure there are no problems called “encroachments”.
Home Inspection Fee
($350 – $650) A professional home inspection of your home is often recommended. Refer to the Home inspection section of this Home Buyers Guide
Interest Adjustments
If your mortgage is not funded at the time of month your payments are scheduled for there will be an adjustment. Also if you are assuming a mortgage there will be an adjustment if you are not moving in on the date payments are scheduled. Unlike renting, usually you will get a month grace, that is your payment will not start until you have been in your home for a month. Usually over 95% of a mortgage payment is interest that has built-up over the previous month payments are made on accrued interest and therefore not made in advance.
Home Insurance – for houses only ($700-$1,700/year) There are several potential types of home insurance depending on your specific requirements. Call your insurance broker for a quote.
Legal Fees ($650 to $1,300) Refer to the “Your Lawyer” section.
Utility Costs – for houses
($100-$250/m) Be sure to budget for heating, electricity and water. Deposits may need to be made.
Property Purchase Tax PPT If you are a first-time buyer and the property price is less than $500,000 you can be an exception from paying PPT. For everybody else, the PPT is 1% on the first $200,000 plus 2% on the balance of the purchase price. Non-Resident Buyers pay additional 7% tax on the purchase price. Refer to the relevant section of this Home Buyers Guide and the BC Property Transfer Tax New Regulations
Moving Company
(Varies widely depending on distance and service.)
Canada Mortgage & Housing Corp. (CMHC) Mortgage insurance for the bank is a one-time fee added to your mortgage balance if you have less than 25% down payment. This can be up to 4.00% of the mortgage amount. Refer to the CMHC chart.
Property Tax Adjustment
Additional Property tax info. is in the Seller’s Guide
Vancouver property taxes are based on the calendar year from January 1st to December 31st of each year and for most municipalities are due on or before June 30th of that year (check for the due dates with your city hall). The city offers a T.I.P.P. program (tax installment payment plan) plan to pay your taxes monthly. If the previous owner was using TIPP you can take the account over. If not you will have to arrange for an account to be set up. Usually, you need to call before November to make arrangements for the following year. If TIPP is not an option taxes will be adjusted on a per-diem basis by your lawyer.
Miscellaneous
Don’t forget costs for initial renovations if needed. Monthly maintenance and/or condominium fees etc.
C.M.H.C. Insurance Premium
This is an insurance premium on the mortgage for the bank of finance Company’s benefit, not the Buyer’s. Mortgages in Canada with less than a 25% equity position by the Purchaser must be C.M.H.C. insured. CMHC mortgage loan insurance is portable (on mortgages placed since April 1997) to all areas of Canada under certain terms and conditions. The following is a table of fees relative to the percentage equity, the greater the down payment the less the fees are. C.M.H.C. fees are added to the mortgage amount, they do not increase the down payment.

Note for this Home Buyers Guide: Premium rates can change. Single Advance: Payable to CMHC at the time the loan is advanced.
Premium – More Than One Advance: Due and payable to CMHC as the mortgage funds are advanced. The mortgage loan insurance premium may be added to the amount of the loan.
Where provincial sales tax is payable on the CMHC mortgage loan insurance premium, the amount of the tax is not to be added to the mortgage amount.

Buyer’s Viewing Tips. Home Buyers Guide.

Finding a house is a transitional decision – being that it is a decision that often has its parameters change as homes are viewed. At the onset of looking at homes, it is a good idea to map out your wish list of what you want and what you need in a home. When making this list keep in mind that things like carpet colour, fireplaces, garages, etc. can be changed and/or added to your next home.
The more flexible you are, the more selection you will have. Try not to restrict the size of the market you will see by setting too many parameters. Follow the recommendations in this Home Buyers Guide.
Spend time with your list – discuss it with your Realtor and at this stage be sure to leave it at home when you go to view homes. Yes, leave it at home! When looking at homes you need to have your attention focused on the property, not on your list. Work with your Realtor to sift through the available homes and make appointments at the homes that best meet your criteria. You will most likely find that it is unusual for all of your wants and needs to be met in any one home. While looking at homes it is always best to keep a “short list” of a maximum of three homes. It helps to remember homes by a distinctive feature like “the goldfish house” for a home that had goldfish, or whatever works. When you get the fourth home on your list then you need to choose one to drop – never keep more than three on your short list.
When looking at homes, first try to get a general feeling about the home – could you see yourself living in the house? Does it make it as far as first impressions go? If it isn’t up to snuff don’t waste a lot of time, just a quick look around is all you need. If things get better as you are looking you might change your mind but often that first impression remains. Budget your home searching time. You are always better off to spend a little more time in a home that you are genuinely interested in rather than in a home you know isn’t right for you.
Finding the right home is a huge decision and the fewer distractions the better. Try to leave work at the office and children at home. Always refer to your Home Buyers Guide.
When you have narrowed your selection down to just a few, take out the wish list to help zero in on the one home you will buy. It’s time to make an Offer to Purchase. Refer to the Offer to Purchase section.

Home Inspection. Home Buyers Guide.
Buying a house, especially a resale home, without a physical inspection can be like buying a used car without taking it to a mechanic first. A home inspection costs in the $350-$650 range, depending on the size of the home and other variables but can be well worth the money in a peace of mind. Having a professional inspection done can minimize potential surprises & possibly eliminate costly home repairs in the future.
An inspection of a property will take about two to three hours, and the inspector will examine the house from the ground up. This would include heating, air conditioning, plumbing, electrical, appliances, structural components of the roof, foundation, basement and exterior and interior.
However, in this Home Buyers Guide are shown some basic areas that you can check yourself:
Roof – Average life spans:
Composite shingles 15-22 years
Wood shingle 15-20 years
Heavy shake 25-30 years
Tile 40 plus years
Naturally, exposure to the elements and upkeep affect life expectancy.
Electrical system:
Check all of the outlets with an electrical tester.
Look for exposed wiring and aluminum wiring.
Check the service panel for “tripped” breakers or “blown” fuses.
Heating/cooling:
Activate the thermostat to the “on” position.
Walk around the house and check the vents for airflow.
Water pressure:
Turn on sink and shower taps and flush the toilets.
Pipes/plumbing
Examine floor areas around the tub and shower for signs of moisture.
Check all exposed pipes at joints for visible corrosion, especially at the water heater.
Doors/windows:
Open and close all windows and doors
Windows and doors should open and close easily.
Drainage:
Look for evidence of pounding, discoloration and sunken elevations.
Check gutters and downspouts.
Appliance check:
Oven: turn oven to 350 F and check the oven temperature in 10 minutes.
Range: ignite burners and smell for any gas odour, or, for electric ranges, check for cold spots.
Dishwasher: let them run a cycle.
Other appliances: check garbage disposal, hood fans, trash compactors, etc.
Use a qualified inspector:
Look in the business directory of the yellow pages under Home Inspectors, check with the Better Business Bureau or ask your Realtor to recommend a company he has dealt with before.

Closing Day. Home Buyers Guide.
On closing day or possession day usually, your Realtor will do a walk-through inspection with you to ensure that everything is all right. Your Realtor should take care of making arrangements for a key and if there are any problems releasing them, he/she should have the lawyers working on it. There are many circumstances that could lead to a holdup; incomplete paperwork, documents not delivered on time or an uncertified cheque for closing costs. (A telephone call in advance to your lawyer will often head-off a moving day nightmare.) If this occurs, hopefully, it can be remedied without causing too much inconvenience.
The walk-through is not intended to be as thorough as an inspection. You have bought the home at this point and you are checking to ensure that it is in the same state as when you previously viewed it. Following is a brief checklist of what you should cover.
Walk-Through Checklist. Home Buyers Guide.
1.Turn on dishwasher so it cycles while you see the rest of the house.
2.Turn on stove burners – let them glow to check for cold spots in the elements.
3.Turn on hot water to check if the tank is heating.
4.Inspect upper floor of the home for problems that were not there previously.
5.Go back to stove – confirm that elements are O.K. and check oven element and broiler.
6.Turn furnace thermostat up to check the furnace.
7.Inspect basement and confirm that the furnace is working.
8.Confirm that all chattels have been left as on the Offer to Purchase.
9.Confirm that dishwasher has cycled and that there are no leaks.
10.Turn down the thermostat, turn off the stove, dishwasher, etc.
11.Check outside around the perimeter of the house.
12.Call your lawyer and your Realtor to inform them if there is a problem

To Find out more about each part of the Home Buyers Guide and Our Sellers Guaranteed Programs, fill and submit the form on this page. In the “Notes” box include a code “guaranteed programs”

Sellers Guaranteed Programs

1. If we can’t bring you an offer for our guaranteed price in 90 days, we’ll SELL your property for FREE. You will only pay the buyer’s agent portion of the commission* (Conditions apply)
2. If another Realtor® or Brokerage offers you a more comprehensive marketing program, we’ll SELL your property for FREE. You will only pay the buyer’s agent portion of the commission.*(Conditions apply)
3. ANY BUYERS in your area will know that your property is for sale. Thanks to our Referral Fee incentive program, the rest of the public, will be encouraged to recommend your property to friends, relatives or colleagues.
4. At ANY TIME during the listing agreement, on your request, we will CANCEL  it. No questions asked.
To Find out more about Our Unique 237 step-by-step Comprehensive Marketing Plan go to Our Marketing Plan

VIP Buyers Guaranteed Programs

1. If within one year, you are not happy with the purchased property, we’ll SELL IT FOR FREE. You pay only the buyer’s agent portion of the commission* (Conditions apply)
2. If we don’t SAVE you at least 1% on your home purchase price, on completion date we’ll pay you back 10% of our net commission* (Conditions apply)
3. Our services are COST FREE for you. Our commissions are paid by the sellers.
To find out how you benefit from our Buyers FREE Real Estate services, go to FREE Buyers Services

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