For many consumers, the decision to purchase a home or continue paying rent has come under closer scrutiny. It's not because home ownership is no longer attractive. Most of homeowners and renters period of several years, it makes more sense to own a home than to rent! The current economic climate has shaken consumers confidence. and when people are nervous about the future, its more difficult to sort through the facts and decide whether to proceed on a major decision like buying a home. it doesn't help that the facts are often muddled. Start with the state of the housing market. There probably isn't an agent alive who can't relate to the phrase "all real estate is local" what you observe in your market often bears little resemblance to national report.

Complete the deal

Here’s a look at what happens in the final stages of buying a home, after your offer has been accepted.

1. Obtain mortgage approval
If you’ve pre-arranged the mortgage, a copy of the accepted

offer (and MLS® listing, if applicable) goes to the lender and

the lawyer. The lender will send an appraiser to assess the

property to see that it’s worth what you’ve agreed to pay and

can be financed to that amount. You’ll meet with the lender to

obtain complete terms and conditions of your mortgage.

2. Call in your lawyer
The lawyer or notary conducts a title search (to check for liens and ensure the legal ownership lies with the vendors) and may recommend that you purchase title insurance. A new survey will be arranged if an acceptable land survey is not on file. The lawyer will also check property taxes and prepare a statement of adjustments, outlining utilities and other home costs that were prepaid by the seller.

3. Get a home inspection
If an inspection was one of the conditions of your offer, call the inspector as soon as the offer is accepted. The inspection must be completed within the time frame specified in your condition. If significant issues are discovered, you may withdraw the offer, request that the seller make the repairs or renegotiate the price. If you are buying a new house, bring an inspector when you conduct your pre-completion deficiency inspection. Talk to your lawyer or notary about amending your contract, before you sign it, to allow for this.

4. Insure the property
Contact your insurance representative immediately to arrange fire insurance for the property. As soon as you receive the policy, send a copy to your lawyer.

5. Finish the paperwork
Your lawyer or notary will advise you of any documents you are required to provide. An appointment will be set up a few days before closing to complete the paperwork and provide the remainder of the down payment, as well as adjustments and other closing costs. At the closing meeting, your lender will review your credit requirements, provide you with cost-of-borrowing details in writing, and get your signature on all loan and collateral documentation. Where two people are borrowing (a married couple, for example), both borrowers must sign the mortgage documentation. You’ll also need to bring in your home insurance documents, to prove that you have fire insurance.

6. Pick up your keys
The lawyer or notary registers the home in your name. The mortgage money is advanced to the seller on your behalf, and later that day you receive the deed and the keys to your new home.

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Home Inspection

Confirm with a home inspection

No matter how perfect a home may seem, it’s a good idea to make your offer to purchase conditional upon a successful home inspection by a qualified professional. An expert can tell you whether the place is structurally sound and the systems are in good working order. The cost of a home inspection usually depends on the location and size of the home. For a typical home, plan to spend between $375 and $500. It could be one of the smartest investments you’ll make.

What the inspector does

The inspector performs a visual inspection of the home’s structure and major systems, including heating and air conditioning, electrical and plumbing systems, roof, foundation, insulation, framing, and windows. The inspector looks for equipment or areas that are worn, need repair or replacement, and are unsafe or inefficient, as well as how one system may have an impact on another.

An inspection takes about three hours, and it’s best if you are there to ask questions. The inspector provides a written report on the findings, listing necessary and recommended repairs or replacements and structural problems. These can range from minor, inexpensive repairs to major, costly replacements and expenses.

How the inspection helps

It’s almost always advisable – especially as a first-time buyer – to make your offer to purchase conditional on a successful home inspection. This clause allows you to back out of the purchase if the inspection uncovers significant flaws in the home. In some situations, this information could help you to negotiate a better price.

In a very competitive market, you might want to request permission to do an inspection before you place the offer, so that you can go in without that condition.

Finding an inspector

You should work with someone who:

Belongs to one of the seven provincial organizations of the Canadian Association of Home and Property Inspectors (CAHPI) and follows the association’s standards of practice

Is an experienced, full-time professional

Does not work as a tradesperson or contractor as well

Has errors and omissions insurance and general liability insurance

Your real estate agent may be able to refer you to a home inspection agency, or you can check the CAHPI website http://www.cahpi.ca/ to find a qualified Registered Home Inspector.

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Making an offer

Once you’ve found a home you wish to buy, your real estate agent Kosta Michailidis can get the ball rolling quickly.

Signing for a resale home

You will have to decide how much you are going to offer as a purchase price and how much to attach as a deposit.

Kosta Michailidis will complete a form called the Offer to Purchase (also called an Agreement of Purchase and Sale). It documents information such as the names of the parties, the amount offered, the closing date, the length of time for which the offer is valid, and any conditions of the offer.

Note that the offer to purchase is a legally binding document, which means that you are committed to fulfilling these details. You may choose to have your lawyer or notary review the contract if time permits. Whether your offer is accepted will depend upon price, as well as elements such as the closing date, the amount of the deposit, and the number and type of conditions.

Once you’re happy with the Offer to Purchase, you’ll sign it and Kosta Michailidis will deliver it, with your deposit, to the seller for review.

Signing a contract on a new home builder purchase

If you’ve chosen a new home you want to purchase, the builder will supply the Offer to Purchase. Since there is no standard form for new homes, the Offer of Purchase can vary widely from builder to builder. A new home contract is also more complex than a resale offer.

You are strongly advised to have your lawyer/notary review it and explain all the terms to you. Your lawyer/notary will also point out any clauses that may be of concern, and may be able to suggest amendments. (Note that some builders may not accept changes to standard clauses.)

Putting conditions on your offer

In some cases, your offer will contain clauses specifying that the offer is “conditional upon” or “subject to” a situation that must be met. For example, it is often advisable to make your offer subject to financing and subject to a successful home inspection.

As each condition is successfully met, both parties sign a waiver of the condition.

Negotiating the offer

In a resale purchase, once your Offer to Purchase has been delivered, the seller can decide to: (a) accept your offer, (b) reject it, or (c) make a counter-offer. If the seller makes a counter-offer, he or she will amend the document and sign it back to you within the time frame specified. (In a new home purchase, your negotiation will probably centre on issues such as payment schedule, material upgrades, and lot, rather than the price.)

You will review the counter-offer and accept, reject, or counter again.
This process continues until the offer is rejected or accepted. If accepted, both parties sign the offer and proceed to the next steps, to satisfy any conditions that were put on the offer. Waivers will be signed as the conditions are satisfied.

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Find the right home

In the world of real estate, location is important. Homes in high-demand areas are priced at a premium, and homes in areas that evolve into prime locations can see their values increase significantly.

Factors that may affect your choice of neighbourhood include:

                       Whether you prefer an urban, suburban or rural location

                       How far you are willing to commute to work

                       Whether you have school-aged children, and the availability/types of schools

                       Where your friends and family are situated, and how close you’d like to be

                       The amenities and infrastructure you’ll need in your neighbourhood (schools, hospitals, shops, parks, roadways, public transit)

                       The type of community you prefer

If you are looking within your current city or town, you may already have a good idea which neighbourhood you prefer. If you’re moving to another province, or from city to rural (or vice versa), you may have to do some research to find the area you want.

Regardless of your situation, get to know the area before choosing a home. Walk around the neighbourhood at various times of day and night. How busy is it? Do you feel safe? How noisy is it? Is there a lot of traffic? Talk to others who live there. Check regional websites. Look up articles in local papers and magazines. What is the area’s reputation?

Remember that the character of a neighbourhood — and the prices of homes — can vary significantly from street to street within an area. It helps to work with a trusted real estate agent with a sound knowledge of the area (and knowledge of the development, if you are purchasing a condo).

Get the features you want

Once you know how much you can afford with a pre-approved mortgage, you’re ready to find a home that suits how you live, work and play. You’ll also want to find a place that will maintain its value or appreciate over the long term.

Making choices

Finding the perfect home at a price you can afford can be hard work. You’ll need to set priorities by thinking about which features are most important for you, and which ones you could sacrifice.

Here are some categories to help you start thinking about your wish list:

                       Type of dwelling. Condo or house? Detached, semi-detached or row-house? Bungalow, two-storey or three?

                       Age and state of home. Are you looking at a new building, either a condo or a home? If you’re looking for a resale, consider whether you want a home in move-in condition or a fixer-upper that you can add value to.

                       Beds and baths. Keep in mind your current needs and how they might change over the next five years or so. Will you be adding to your family? Will you need a home office? How many bathrooms do you need, and do they all have to be full, four-piece bathrooms?

                       Outside areas. Do you need a large yard for the kids, or space to plant a garden?

                       Parking. If you’re buying in a busy urban centre, you might pay a premium for this. Consider whether you need a garage, carport or parking pad, or whether street parking will suffice.

                       Extras. Sometimes the unexpected details can make a home special, for example, a hot tub, a finished basement, a large balcony in a condo, or architectural details.

Find the home that fits

You know what you want and how much you can afford. Now how do you find the right home for you?

Work with a pro
A real estate agent like Kosta Michailidis a key member of your home-buying team. Your agent should be someone you trust and get along with, who will provide the following services:

                       Meet with you and listen to what you want and need in a home

                       Narrow the search by sending you relevant listings based on your desired features

                       Brief you on the current state of the market

                       Arrange private viewings

                       Advise you on issues such as location, home features, factors influencing value and any concerns with a home that require follow up

                       Walk you through all the steps required to place an offer and purchase a home

                       Prepare paperwork such as the offer to purchase

                       Represent you and act on your behalf in negotiations

A real estate agent earns money through a commission from the person selling the property. As the buyer, you are not required to pay any fees or commissions to the real estate agent.

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Save for your down payment

It’s smart to start saving as soon as you start thinking about buying a home. The larger your down payment, the less you’ll have to borrow and the lower your interest costs will be.

How much will you need?

You can buy a home with as little as 5% of the purchase price as a down payment from your own savings. On a home that costs $300,000, that would be $15,000.

If your down payment is 20% or more of the home price, you’ll qualify for a conventional or collateral mortgage. If it is less than 20%, it is a high-ratio conventional mortgage, and you’ll need to insure it with Mortgage Default Insurance. This one-time insurance premium is usually added to your mortgage or it can be paid up front.

In addition, you must have enough cash to cover closing costs. For a high-ratio mortgage, you must have at least 1.5% of the purchase price from your own resources to cover or contribute to the closing costs in order to qualify for mortgage default insurance.

Where will the money come from?

There are many sources you may be able to tap into, including:

                       Personal savings. Review your chequing and savings accounts and Tax-Free Savings Accounts.

                       Retirement Savings Plans (RSPs). Under the Canada Revenue Agency (CRA) Home Buyers’ Plan (HBP), you and your spouse or common-law partner may be allowed to withdraw up to $25,000 each from your RSP as a tax-free loan that you pay back in equal installments over 15 years.

                       Gifts from family. This could be a one-time gift or accumulated cash gifts from special occasions.

                       Assets. Check for insurance dividends, Canada Savings Bonds (CSBs), Guaranteed Investment Certificates (GICs), term deposits, non-registered equities.

                       Unexpected income. An income tax refund, work bonus or the extra income from a raise are all potential sources.

Ways to save for a down payment

Start now, and save small amounts on a regular basis.

                       Set money aside. Open a dedicated savings account to keep it separate from your day-to-day finances.

                       Make saving automatic. Set up a Continuous Savings Plan to make it easier to save regularly. Find out how much you can save,

                       Put your savings to work. Choose an investment option based on your anticipated time horizon.

                       Keep the taxes. Accumulate your savings (up to $5,000 a year, per person) in a Tax-Free Savings Account, and you won’t pay tax on the money you earn.

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Getting pre-approved

As a first-time buyer, you’ll probably need to borrow most of the price of the home.

Getting pre-approved for a mortgage is a great first step to take. By looking at how much you earn each month and how much you spend – particularly how much you must spend to pay off any existing debts — your Lender Representative or mobile Mortgage Specialist can tell you how much you are qualified to borrow to purchase a home. You can shop confidently, and when you find a home you want to purchase, you can make an offer knowing you can afford it and the funds are available.

How much money comes in?

Lenders will ask for the following information:

                       Name of your employer, length of employment, and current

                       Salary annual salary or wages for the household

                       If you are self-employed, earnings for the past two years

                       Annual earnings from commissions, bonuses or tips

                       Annual interest and investment income

                       Child support or alimony received this year and last

                       List of assets (bank accounts, RRSPs and other investments; major personal assets, such as jewelry, car, collections)

How much money goes out?

The lender will also need to know how much you currently need to pay to make debt repayments, including:

                       Credit card balances (major credit cards and retail credit cards)

                       Student loans

                       Car loans or lease

                       Other debts and loans

Calculating affordability

As part of the application eligibility process, the lender may run two calculations. You can easily make this yourself to get an idea of how much you can borrow.

The Gross Debt Service (GDS) ratio is the maximum you can afford to spend each month on mortgage principal and interest, property taxes, and heat (and 50% of the condo fee, if applicable). As a rule of thumb, your GDS should not exceed 32% of your gross monthly income (before taxes and other deductions).

Your Total Debt Service (TDS) ratio tells you the maximum total debt load you can afford to carry — including monthly mortgage costs plus all other debts and obligations. It should not exceed 40% of your gross monthly income.

In calculating the numbers, there’s a built-in margin of safety. Under recent regulation changes, lenders are required to determine eligibility based on the Bank of Canada five-year interest rate for default insured mortgages.

 Estimate what it will cost to own a home

One of the most important calculations you can make is to figure out how much you’ll be paying out each month to purchase and maintain a home of your own. When you pull these figures together, remember to include everyday costs that you will incur no matter where you live — for example, groceries, gas, and phone.

Checklist of expenses

To get you started, here’s a list of typical housing and everyday expenses to include in your budget.

1. Housing costs

• Rent or mortgage payments (includes principal and interest)
• Property taxes
• Heat
• Electricity
• Water, sewage
• Telephone
• Television and Internet
• Condo fees (may include some of the above – check with the condo corporation
• Fire/property/contents insurance
• Mortgage life and/or disability insurance
• Home /Auto insurance
• Landscaping or lawn maintenance
• Snow removal
• Cleaning service
• Repairs and home improvement
• Maintenance products (garden products, furnace filters)
• Contingency fund
• Groceries
• Cleaning supplies
• Lunches and dining out
• Transportation costs
• Credit card and loan repayments
• Medical expenses (or insurance)
• Childcare
• Pet expenses
• Savings
• Clothing
• Health and gym memberships
• Entertainment
• Charity
• Gifts
• Vacations

1. Utilities and insurance

1. Possible maintenance

1. General living expenses

Remember the closing and other one-time costs

Monthly expenses don’t always tell the whole picture. When you find the home you want, there are a number of closing costs and other one-time expenses to consider before you can complete the deal and move in. Depending on where you live and the type of home you buy, it is wise to budget between 3% and 4% of the purchase price.

Appraisal fee

Estimated cost: $250-$350.
Your mortgage lender may require a professional appraiser’s opinion of the value of the property to determine whether the selling price is reasonable for that market.

Land survey fee or Certificate of Location cost

Estimated cost: $1,000-$2,000.
If the seller cannot produce an up-to-date survey or Certificate of Location, you may have to pay for one. Title insurance may be accepted in lieu.

Title insurance

Upwards of $400.
This coverage (homeowner/lender policies combined) protects you from title complications that may prevent you from owning the property free-and-clear and insures you against unpaid liens and loss caused by defects of title to the property, including real estate title fraud.

Legal costs

Estimated cost: Minimum of $1,000.
Services provided by your lawyer or notary, including: conducting a title search, drafting the title deed, and preparing the mortgage, plus registration fees and disbursements.

Municipal and provincial tax

Ask your lawyer or notary for the most recent calculations for your region. Contact your realtor or lender to find out about any rebates you may be eligible for on a new home purchase.

Also known by other terms including Land Transfer tax, property transfer tax, and land registration fees. This is a provincial or municipal tax based upon the purchase price, and is calculated differently by each province and municipality. It generally applies only to resale homes, although some provinces may charge tax on new constructions.

Fire/property insurance

Estimated cost: Varies, based on replacement value, coverage type, discounts.
You must insure your home against fire or significant damage for at least its replacement cost, effective on closing day. You should also insure the contents of your home.

Prepaid property taxes, utility bills and other charges

Estimated cost: Varies. Allow about $1,000 to $2,000.
The tax and utility costs that the seller has prepaid must be reimbursed by the purchaser; sometimes known as adjustments. The lawyer calculates the amount owing.

Home inspection fee

Estimated cost: Around $400-$500 for a typical home.
It’s advisable to make your offer conditional upon a positive home inspection.

Water quality inspection fee

Estimated cost: If the home sources drinking water from a well, you will need to have the quality of the water tested to ensure it is healthy for human consumption.
You can usually negotiate the cost with the vendor and include it in the offer to purchase.

Mortgage default insurance

Estimated cost: Between 0.50% and 2.90% of the loan amount, depending on your down payment. If you take a high-ratio mortgage that has an extended amortization (that is, more than 25 years, up to and including 35 years) a premium surcharge on your mortgage will apply.

Stopple certificate fee

Estimated cost: Up to $100.
This will be required if you are buying a condominium or strata unit. The certificate is accompanied by the financial statements of the condo corporation and outlines the common fees for your unit, the status of the seller’s payments, the reserve fund, etc. Your lawyer/notary requires this document to proceed with the closing transaction of the purchase, and will identify any shortcomings. Allow a minimum of 10 days to get a copy of the certificate from the condo corporation.

HST

Estimated cost: Varies by type of homes.
You will pay Harmonized Sales Tax (HST) on the purchase price of a newly constructed home. Your province may offer a tax rebate, which may already be reflected in the builder’s selling price.

Moving expenses

Estimated cost: Up to $5,000 for professional movers.
Costs will vary, depending on whether you do it yourself, rent a truck or hire professional movers.

Extra post-move costs

Estimated cost: Varies significantly; try to set aside at least $1,000-$2,000 for the basics.
Include miscellaneous expenses such as utility hookup fees, mail redirection, new appliances, tools, painting and decorating.

Mistake #4 is:

Your Home Is Marketed Wrong!

Whenever i see a badly shot photograph in MLS, and perhaps its the only photo, i want to shake the agent and scream, "What are you thinking?" but agents and SELLERS make plenty of marketing mistakes. The battle cry of frustrated SELLERS is; "Why isn't my home selling?" These are likely SELLERS who are not employing marketing strategies designed to expose a home to the largest pool of BUYERS. What do BUYERS do today? they will look at the MLS system and browse for homes themself prior to hiring an agent, and what they see first? your bad shot of photograph....."opps click NEXT! Once a BUYER has entered a home, the marketing continues. Don't forget! you get what you pay for. Make sure that the agent you will hire, do have a good marketing material for your home, let him/her share what they will do for you.

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Mistake #3 that home sellers do is: The Home is in BAD Condition!

Getting your house ready for market goes beyond making the beds and washing dishes. although I've seen plenty of homes with toys and cloth scattered throughout; BUYERS can't get out of those homes fast enough. There are at least 10 essential steps to take to preparing the home for sale (email me and ill send you the full list). Some homes need updating and quick fixed. Doing repairs before resale can boost chances of quickly selling. If items are broken or BUYERS see deferred maintenance, they wonder what else is wrong. Its more expensive, actually, not to fix the house. Dressing your home for showings is called staging a home. Think of the process like arranging flowers in an attractive vase. If you or your agent lack the vision or ability to stage, consider hiring a professional home stager, must full service agents will provide that. 

For FREE Consultation click HERE!