Who you need to buy a home
Buying a house is a personal decision, but you may be surprised at the number of people who end up being involved in the process. Here are the professionals you may meet as you shop for a new home, qualify for a mortgage and close on your loan.
The real estate agent/broker – The real estate agent or broker will locate houses in your price range and in the areas where you want to live. The agent/broker will present your “offer to purchase†to the seller until an agreement is reached, usually for a commission. There are a number of real estate agents and brokers to choose from, so it’s advisable to shop around to find one you’re comfortable with. Talk to friends and family to get a referral. Commissions can range from three to six per cent of the purchase price. Agents set commissions based on market conditions.
Mortgage Broker – Some purchasers retain the services of a mortgage broker to assist them with arranging their mortgage financing. The mortgage broker should determine the best type of financing that suits your particular financial situation. You may wish to ensure your broker is a member of the Canadian Institute of Mortgage Brokers and Lenders (CIMBL) and has obtained their Accredited Mortgage Professional (AMP) designation.
Lenders – Banks, credit unions and mortgage companies all lend money to homebuyers. Find out how much you can afford before starting to look. Lenders look at your income, debts, employment and credit histories and the value of the property you want to buy before giving you a mortgage. It pays to know how much you can afford before looking, so consider getting pre-approved. You don’t want to find your dream home and then discover you can’t buy it because it is too expensive.
Lawyer – Your lawyer (notary in Quebec) reviews the agreement of purchase and sale, ensures all closing documents, including title search and title insurance, have been completed properly, obtains signatures and records documents with the appropriate provincial land transfer office. Your lawyer will usually also act for the lender and collect the money needed to close your purchase and give it to the appropriate parties, as well as ensure that on closing you have a valid and marketable title subject only to the encumbrances you have agreed to. If you don’t have or know of a lawyer, your best referral source is family or friends, or through the law society in your area. It’s best to get your lawyer involved early in the process to review the purchase and sale agreement prior to signing.
Property Surveyor – A property survey is undertaken to verify the property’s boundaries, measurements and structures and identify any easements, rights of way or encroachments on your, or adjacent properties. Title insurance is often an alternative to a property survey.
Home Inspector – A qualified inspector examines the plumbing, electrical work, appliances, furnace, air conditioners, roof and structural stability of your new home. This allows you to address any issues with the vendor prior to closing, as well as anticipate any repairs you may need in the future.
Appraiser – The appraiser determines the home’s market value based on its condition and the selling prices of similar homes in the area. You should ensure you have obtained an appraisal for your own protection.
Default Mortgage Insurer – Mortgage insurers serve homebuyers by helping them achieve homeownership through low down payment mortgages. Mortgage insurance lets people buy a home with as little as five per cent down and still get the same interest rates as for conventional mortgages. It also protects the lenders from a borrower defaulting on a mortgage at any time during the mortgage amortization period. By law, banks are required to purchase default mortgage insurance on all mortgages where the down payment is less than 25 per cent of the property value. Genworth Financial Canada is the only private-sector supplier of mortgage insurance in Canada.
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Contact the Jeffrey Team for more information
