He or she will know what is on the market, in which neighbour-hoods
and at what price, and can save you time by prescreening home listings -
screening out the ones that don’t meet your needs or budget. Then he
or she can make appointments for you to see the homes that suit you.
A real estate representative can also assist you in making an Offer
to Purchase. Representatives are aware of current market conditions,
what price offers are realistic and what conditions to include in any
offers.
You may deal with a builder or contractor if you buy a new home, have
one custom built or require renovations to a resale home. To ensure a
builder’s credibility and quality, ask for references, talk to other
customers about the builder’s work or check with the new home warranty
program.
If you’re buying a new home from a developer or builder, visit
other housing developments that the company has built. You can also ask
builders or contractors if they are a member of a local home builders’
association, or ask for a provincial license number to ensure your
contractor is registered.
A good way to start
looking for any |
professional is to ask |
for referrals from
satisfied friends. |
If you’re building a custom home, you may also want to hire an
architect. Standard architect’s fees are 10% of the total project
cost. Builders of custom homes and renovators usually work on either a
fixed-price or a cost-plus formula. Your contract should outline what
the payment type is. All contracts with a builder should be as specific
as possible about con-struction details, right down to the brand name or
model number of any finishes. Any changes to your contract should be
initialled by you.
For more information, ask for the CMHC publication
How To Hire A
Contractor.
Appraisers
You may wish to have an independent appraisal completed on a property
before you make any offer or make the offer conditional on completion of
an appraisal. It can protect you from paying more than the market value.
If the appraised value is lower than the agreed price, you may be able
to renegotiate a lower price,therefore having an independent appraisal
could save you time and money.
The appraisal will include an unbiased assessment of the property's
physical and functional characteristics, an analysis of recent
comparable sales and an assessment of current market conditions
affecting the property. This information provides you with an expert
independent opinion as to the property's market value.
Lenders
The key to finding the right lender is to shop around. Many different
institutions lend money for mortgages, including banks, trust companies,
credit unions, caisses populaires, pension funds, insurance companies
and finance companies.
You can even find private lenders listed in your local newspaper. It
will save you money to speak with more than one lender in each category
because the terms and options of each will vary.
Some lenders, such as credit unions, deal only with members. But
don’t be shy about approaching new institutions. For example, if
you’d like to get your mortgage at a trust company, you don’t need
to have a savings account there.
Mortgage Brokers
Mortgage brokers don’t usually lend money but rather put you in
touch with others who do.
For example, brokers are aware of private lenders that you may not be
able to find on your own.
Brokers are independent, which means that they are not affiliated
with any specific lending institutions. Their role is to find the lender
with the terms and rates that will best suit you.
In some cases, the mortgage broker will charge you a fee for
services. This charge is more likely if you have a poor credit history
and will probably be a small percentage of the value of the mortgage,
for example, 1%-2%. But, in most instances, the broker’s fees are paid
by the lender.
Ask to see a resume or
portfolio, |
depending on the |
profession, and ask for
references. |
Lawyers/Notaries
Hiring a lawyer (or notary in Quebec) is one way to ensure that your
legal interests are being protected when you buy your home. Your lawyer
will review any contracts you need to sign, especially the Offer to
Purchase.
If you make an Offer to Purchase that is accepted, your lawyer will
be responsible for many of the closing arrangements.
Lawyers’ fees range widely and depend on the complexity of the
deal, but will probably cost a minimum of $500 plus disbursements.
You can check for a lawyer referral service in your community or call
the local law association for the names of lawyers who specialize in
real estate law.
Home Inspectors
It is always a good idea to have the home inspected.
An inspector should supply a detailed written report on how
well-built the home is, and whether any repairs are necessary and their
estimated cost. The report should estimate the cost of repairs and the
priorities - what should get fixed first and how soon.
You can find a home inspector through a local professional
association of home inspectors or by asking your real estate
representative.
Inspectors are unregulated in most provinces, so you should inquire
about the inspector’s credentials and ask for references.
Ensure that the inspector has errors and omissions insurance. This
means that if, for example, you buy a home that requires a costly repair
that the inspector didn’t report, then the inspector can be held
financially responsible for the cost of the repair. Home inspectors’
fees can range from $150-$350 for a home that costs $300,000 or less.
If you have made a satisfactory home inspection a condition in an
Offer to Purchase a home, the inspector’s fees are paid by you. With
older homes, you may also ask an inspector to check for termites, lead
paint, asbestos or other problems.
Insurance Brokers
Ask them to specify
precisely what |
services you are |
getting and how much
they will cost. |
An insurance broker can provide you with all your insurance needs,
including property insurance and mortgage life insurance. Lenders insist
on property insurance because your property is their security for your
loan. Property insurance covers the replacement cost of your home, so
premiums vary depending on your home’s worth.
Your lender may also suggest that you buy mortgage life insurance.
This is often available through your lender, who then simply adds the
premium to your regular mortgage payments.
But lender-supplied insurance can be more expensive than from a
broker. Don’t confuse property or life insurance with mortgage loan
insurance which is mandatory for high-ratio mortgages.
Use these handy worksheets when you assemble your
team.
As you consider all the possibilities, keep track of what you
consider to be strengths and weaknesses of each candidate.
Click
here to get Team Worksheets(PDF), 118KB
To read the (PDF) Adobe Acrobat file, you will need the free Adobe
Reader available from
Adobe
Systems Incorporated.
Almost
no one buys a home without a mortgage. What does that
mean? What does it cost? What are your options? The next
step will help answer these questions for you.. |
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