Determine what you can afford top
- Purchasing a home involves one-time costs and monthly expenses.
- The largest one-time cost is the down payment. It usually represents
between 5-25% of the total price of the property.
- In addition to the actual purchase price, there are a number
of other expenses that you might be expected to pay for.
These are listed below:
Typical One-time Expenses
Mortgage Application and Appraisal Fee
Property Inspection (optional)
Deed and/or mortgage registration
(sometimes provided by seller)
Land Transfer, Deed Tax or Property
Purchase Tax (in Quebec within
3 months following signing)
Mortgage Interest Adjustment and
Take Over Fee (if applicable)
Adjustments for Fuel, Taxes, etc.
(and application fee if applicable)
Home and Property Insurance
Connection charges for utilities such as gas, water and electricity
At time of application
Closing (if applicable)
Closing and ongoing
Date of move
Date of move
Other costs may include landscaping, redecorating, furnishings,
appliances and repairs.
Typical monthly costs incurred with home ownership are mortgage
payments, maintenance, insurance, condo fees, property taxes and
Understanding market conditions top
The real estate market is always changing. It helps to understand
how market conditions can affect your position as a buyer.
The supply of homes on the market exceeds demand.
|High inventory of homes. Few buyers compared to availability.
Homes on the market longer. Prices tend to drop.
||More time to look for a home. More negotiating leverage.
The number of buyers wanting homes exceeds the supply or number
of homes on the market.
|Smaller inventory of homes. Many buyers. Homes sell quickly.
Prices usually increase.
||May have to pay more. Make decisions quickly. Conditional
offers may be rejected.
The number of homes on the market is equal to the demand or
number of buyers.
|Demand equals supply. Sellers accept reasonable offers. Homes
sell within an acceptable time period. Prices generally stable.
||More relaxed atmosphere. Reasonable number of homes to choose
Obtain a pre-approved mortgage top
Having a pre-approved mortgage will give you the confidence of
knowing exactly what you can spend on a home before you start looking.
You will also be protected against interest rate increases while
you look for your new home.
Your Mortgage Specialist will answer your questions and help you
determine which financing terms and options are right for you. Your
Mortgage Specialist and Real Estate Professional work as a team
to help you find the right home and select the best financing.
Finalizing Your Mortgage
Once you've found the home you want to purchase, there are some
documents you'll probably be asked for in order to finalize your
financing. They will include:
1. A copy of the real estate listing of the property. If the home
is still to be built, the mortgage lender will need to see the architect's
or builder's plans and details on lot size and location.
2. A copy of the offer to purchase or the building contract, if
this document has been prepared.
3. Documents to confirm employment, income and source of pre-approval.
If you have a pre-approved mortgage, it's a simple matter of finalizing
a few details which your Mortgage Specialist will explain to you.
The major elements of an offer top
Depending on the local market conditions, your opinion of value
and market information provided by your Oliver and Associate Professional,
the price you offer may be different from the seller's asking price.
The deposit shows your good faith and will be applied against the
purchase of the home when the sale closes. Your Oliver and Associate
Professional can advise you on an appropriate amount.
Includes the total price offered and the financing details. You
may arrange your own financing or ask to assume the seller's mortgage,
especially if it has an attractive interest rate.
These might include "subject to home inspection", "subject
to you obtaining financing", or "subject to you selling
5. Inclusions and Exclusions
These might include appliances and certain fixtures or decorative
items, such as window coverings or mirrors.
6. Closing or Possession Date
Generally, the day the title of the property is legally transferred
and the transaction of funds finalized unless otherwise specified
(except in Manitoba and Quebec). Note: In British Columbia the Possession
Date is legally 1 to 3 days after closing.
How to make an offer top
When it comes time to make an offer, your Oliver and Associates
Professional can provide current market information and will assist
you in drafting your offer.
Your Oliver and Associates Professional will communicate the offer,
sometimes known as an Offer to Purchase* to the seller, or the seller's
representative, on your behalf. Sometimes there may be more than
one offer on a property coming in at the same time. Your Oliver
and Associates Professional can guide you through this process.
*Offer to Purchase: a legal document which specified the terms
and conditions of your offer to purchase the home.
The offer can be firm or conditional.
Firm Offer to Purchase: usually preferable to the seller, because
it means that you are prepared to purchase the home without any
conditions. If the offer is accepted, the home is yours.
Conditional Offer to Purchase: means that you have placed one or
more conditions on the purchase, such as "subject to home inspection",
"subject to financing","subject to your ability to procure insurance" or "subject to sale of buyer's
existing home". The home is not sold until all the conditions
have been met.
*In the province of Quebec, this is referred to as a "Promise
Acceptance of the Offer
Your Offer to Purchase will be presented as soon as possible. The
seller may accept the offer, reject it, or submit a counteroffer.
The counteroffer may be in reference to the price, the closing date,
or any number of variables. The offers can go back and forth until
both parties have agreed or one of you ends the negotiations.
Hire a legal professional top
A legal professional is there to represent your interests and to
process the legal documentation required. Your Oliver and Associates
Professional can provide you with the names of legal professionals
who specialize in real estate.
The legal process differs from province to province. Your Oliver
and Associates Professional or legal professional will advise you
on the steps to be taken before the keys to your new home are presented
Have the home inspected top
Buying a home is one of the most important investment decisions
you will make in your lifetime. As such, it makes sound financial
sense to enlist the services of a qualified home inspection company
to ensure your home is as solid and secure on the inside as it is
on the outside.
A home inspection will determine the structural and mechanical
soundness of your home. Your home inspector will identify existing
and potential problem areas, suggest practical low-cost solutions,
and provide estimates regarding costs for any work required. Shortly
after the inspection has taken place, a report summarizing the findings
is generally provided to the potential purchaser.
By commissioning a home inspection prior to purchase, you're protecting
both yourself and your investment, as well as buying a little peace-of-mind.
Home inspection costs often range according to size, age, and location
of the home. Your Oliver and Associates sales representative can
recommend a reputable home inspection service or arrange for a home
inspector to visit your property.
Home owners insurance top
When you purchase a home, consider how you will protect your investment.
Most mortgage lenders insist on fire insurance coverage at least
equal to the loan amount or the building value, whichever is less.
You should also consider a homeowner's policy that combines fire
insurance on the building and its contents with personal liability
coverage. Consult your general insurance agent or broker for professional
advice on home insurance.
Mortgage Life Insurance
When lenders refer to mortgage insurance, they're referring to
coverage that's provided by CHMC or MICC for a high ratio mortgage.
Mortgage life insurance (MLI) is inexpensive coverage on your life
which protects your family or beneficiaries by paying off your outstanding
mortgage in the event of your death. For just pennies a day, you
will have peace of mind knowing your beneficiaries will be mortgage
free. MLI premiums are based on two factors: your age and mortgage
amount. Your premium is added to your mortgage payment so there's
no extra paperwork, and it remains the same until your mortgage
is paid off. Joint coverage for spouses is also available.
Disability Insurance is important if your mortgage payments depend
entirely or in part on your income. Disability insurance provides
replacement income if an accident or illness prevents you from working.
Job Loss Mortgage Insurance
Recently insurance companies have started to offer Job Loss Mortgage
Insurance. This insurance covers the mortgage payments in the event
that you involuntarily lose your job.
Title Insurance is no fault insurance with no deductible and is bought usually at the time of purchase of a home (although it can be acquired on existing property after the fact, but at a dramatically higher premium), and is for all future years of ownership of a particular residence. It does NOT require annual renewals which is typical of all other types of insurance. The policy covers the homeowners quality of title, protecting against losses of damages that might be suffered as a result of unknown liens, including frauds or forgeries that might arise in the chain of title, both before and after the title policy has been issued.
Land transfer taxes top
Purchasers in most large Canadian centres can add Land Transfer
Taxes to their list of closing costs.
Unless you live in Alberta, Saskatchewan, or rural Nova Scotia,
land transfer taxes (or property purchase tax) are a basic fact
of life. These taxes, levied on properties that are changing hands,
are the responsibility of the purchaser. Depending on where you
live, taxes can range from a half a per cent to two per cent of
the total value of the property.
Many provinces have multi-tiered taxation systems that can prove
complicated. If you purchase a property for $260,000 in Ontario,
for example, .5 per cent is charged on the first $55,000, 1 per
cent is charged on $55,000 - $250,000, while the $250,000 - $400,000
range is taxed at 1.5 per cent. Your total tax bill? $2,375.00.
The following chart illustrates Land Transfer Taxes by province.
Property Purchase Tax
Up to $200,000 X 1 % of total property value
From $200,000 up X 2 % of total property value
Land Transfer Tax
Up to $30,000 N/A
From $30,000 to $90,000 X .5 % of total property value
From $90,000 to $150,000 X 1 % of total property value
From $150,000 up X 1.5 % of total property value
Land Transfer Tax
Up to $55,000 X .5 % of total property value
From $55,000 to $250,000 X 1 % of total property value
From $250,000 to $400,000 X 1.5 % of total property value
From $400,000 up X 2 % of total property value
Up to $50,000 X .5 % of total property value
From $50,000 to $250,000 X 1 % of total property value
From $250,000 up X 1.5 % of total property
Land Transfer Tax
Halifax County Regional Municipality
.015 per cent on total property value
Outside Halifax County
.005 per cent on total property value or nothing
Some moving tips top
Use the helpful checklist as a reminder of the things you need
to do before you move.
Book the movers. You can choose to have the movers pack everything,
or just the breakables, or you can pack yourself. It's a good idea
to obtain estimates from several different companies.
IF YOU OWN YOUR PRESENT HOME:
- Arrange to have our gas, water, and electric meters read on the
day you leave and have the bills forwarded to your new address.
- Have your oil tank read and filled before your sale closes, and
provide a receipt to your legal professional if required.
- If the water heater or furnace is rented, arrange for a transfer
of the rental agreement to the purchaser.
- Disconnect your telephone, cable TV, and water softener.
IF YOU RENT YOUR PRESENT HOME:
- Give necessary written notice to your landlord and make arrangements
for the return of any monies you have on deposit.
AT YOUR "NEW" HOME:
- Make arrangements for the gas and electric utilities, water softener,
telephone and cable TV to be connected on the day the sale closes.
- Get "Change of Address" cards from the post office
and send out well before moving day.
- Have the post office forward your mail to your new address.
- Cancel any contracted services and pre-authorized cheques.
- Inform gardening, dry cleaning, garbage pickup, newspapers, magazines,
diaper and other home services. Arrange for service at your new
- Obtain a letter of introduction from your current branch to help
establish new accounts. Transfer trust or bank accounts and securities.
- Cancel or transfer social, athletic, civic, religious or business
affiliations and memberships.
- Arrange for transfer of medical, dental, prescription and optical
- Change the address on your driver's license(s) effective the day
of the move.
- Collect all items out for cleaning, repair or storage. e.g. fur
coats, dry cleaning.
- Make special arrangements for the moving of perishables, such
- Make special arrangements for the moving of your pets.
- Dispose safely of all flammable liquids as it is illegal for movers
to carry them.
AFTER YOU'VE MOVED IN
Low Energy, BIG Savings
Fuel costs are making pro-active conservation smarter.
The Canadian housing market, to put it bluntly, has legs that just don't quite: Low interest rates and strong consumer confidence have contributed to powerful demands for both houses and renovations.
At the same time as buyers are forming conga lines to snap up their dream home, the cost of heating and cooling the dream home is climbing steeply. The good news, however, is that there are lots of measures that can help contain energy bills, and those that take the initiative, may be eligible for a helping hand.
The federal government has a couple of conservation programs that can give homeowners and edge in the face of fuel price increases. Given that almost 20 percent of all energy in Canada is residential, there's plenty of reason to focus on individual improvements.
First, the Canadian Mortgage and Housing Corporation can ensure that if you purchase an energy efficient home- or renovate a new or existing one to reduce energy consumption- you stand to qualify for a 10 percent refund on you mortgage loan insurance premium. Another benefit is the extension of the amortization period from 25 years to a maximum of 30 years, which can considerably trim monthly payments.
The primary step is to get an accredited EnerGuide assessment of your home. This process tests the structure and identifies areas where energy is being wasted. That's followed up with a list of recommendations for improvements, and an annual estimate of energy consumption and an assigned rating
The cost of the evaluation is around $300, but that amount is typically recouped by implementing some of the most basic recommendations. Furthermore, those who proceed with some of the bigger ticket repairs and upgrades qualify to get a portion of the capital outlay reimbursed by Ottawa- the amount depending on the relative improvement in energy efficiency. (The average rebate is $650 plus an additional $100 if energy-efficient equipment is installed).
Houses that are over 25 years old, can typically save 35 percent of their energy use through retrofitting. If a house is over 50 years old, the savings could range as high as 38 percent.
In addition to improving the quality of windows and making them as airtight as possible (one third of the heat in a home can escape through leaky windows) and installing energy efficient water heaters and insulating them. There are some smaller every day steps that, just through awareness, can save on household bills.
Sounds basic, but just turning off lights can be a big deal: lighting accounts for a surprisingly high 16 percent of every homes electricity consumption. Although you probably don't want to replace all your light bulbs with fluorescent tube, they do use 75 percent less power and last 8 times longer.
When it comes to buying new appliances for a new or newly renovated home, the energuide program offers guidance in the form of energy-efficient rating.
Some other points to consider,
STOVES- with self-cleaning ovens are more energy efficient overall because they have more insulation.
CONVECTION OVENS-are more energy efficient because of the air circulation and faster cooking times.
CONVENTIONAL BURNERS- require more energy than induction or halogen cook tops.
DISHWASHERS- with a "not heat" dry option, allows you to use air rather than power to dry dishes. Buy a model that uses the least amount of water.
FRONT LOAD WASHING MACHINES-use 40 percent less water and can save $100 a year in energy, water, and detergent costs.
SIDE-BY-SIDE REFRIGERATORS- use more energy than those with a freezer at the top of the unit, but bottom freezers are more efficient. Models with built-in ice and water dispensers also guzzle more energy.
CHEST FREEZERS- are more efficient than up-right models because the cold air stays inside when the lid is opened.
The number one energy consumer in a household, by far, is the hot water heater. Wrapping it in an insulating blanket can save as much as 10 percent in water heating costs.
If your prepared to take it further, a heat pump water heater (which transfers heat from surrounding air or ground, into water in the tank) can save as much as 50 to 60 percent on hot water bills-even more if the cool air it produces is recycled to supplement air conditioning through a waste heat recovery unit.
Finally when it comes to furnaces, a standard forced-air gas furnace wastes about 20 cents of every fuel dollar, and for older models it can run as high as 35 cents on the dollar. By contrast high efficiency furnaces have an annual fuel utilization rate that usually runs around 90 percent.
In the end, it'll never be cheaper to run a household. But spending to save has never been a more viable strategy.
August 19th 2005