STEPS TO KNOW WHEN BUYING A HOME

 

Buying a home is one of the biggest and most important decisions many people will make in their lifetime. A home becomes the single biggest asset in peoples' lives and the most important personal possession. Therefore, many considerations should be made prior to the purchase of real estate. Our company is ready to provide thorough education to our clients to assist them in buying the property of their dreams. There are various topics that should be regarded that are vital to buying a home.

It is natural to want to acquire a premium property for the best possible price. However, when buying a home, it is important to stay realistic, therefore, the first thing that needs to be done is to recognize how much one can afford. An individual or individuals would need to look at how much money they have available and how much will need to be borrowed. Unfortunately, having enough resources to buy a property is not enough. There are additional costs involved when buying a home, such as registration fees and actual maintenance that also need to be thought out.

In addition, one of the first steps in buying a home would be to recognize the type of home that is to be acquired. After buyers determine their price ranges and essential requirements, they can start by finding the right real estate agent that will help them through this process. 

The top qualifications that buyers should look for in their agents are trustworthiness, expertise and impeccable service.

As can be seen from the discussion above, buying real estate may be a strenuous matter. However, all can be avoided if the right steps are taken from the start. Buying a home may in fact become one of the most amazing times of a person's life! Our uncompromising service is bound to pleasantly surprise you. So do it the right way, consult our qualified agents and be on your way to finding an exceptional home that fits your wallet and taste!

There are five important steps which buyers should know when buying a property. Please click on the links below to get more detail about each step.

 

HOW TO GET BEST DEAL WHEN BUYING

There are three most important elements which buyers should look into when buying a property. Please refer to the headings below for some tips on how to make sure to get the best deal possible when buying a property.

Location! Location! Location!
Location is single most important element when purchasing a property. A property must be located in the right area since its location could later play a role on variety of factors which are important to the buyer. One of those factors is investment. For example, if the land is well situated, it will be easier to sell and its value is likely to appreciate over time. At Bayview Real Estate Inc. we are very attentive to our clients' needs and as such, we make great efforts to accommodate them appropriately.

The Value:
Value is a relative concept however certain things about a property remain constant. Bayview Real Estate Inc.'s sales representative have the expertise needed to provide you with individual and confidential services required to determine whether a property is right for you. We also have experience in financing which helps us to determine what you can afford. Rest assured that a financing professional will be available to answer your specific questions and concerns.

The Search:
Bayview Real Estate Inc. prides itself on having an exceptional team of experts. These individuals have the knowledge, experience and motivation to assist you in either buying or selling. Our representatives will introduce you to every available listing that matches your criteria. Often, our sales representatives are aware of properties which are not yet listed and they can arrange an introduction to them. The flawless reputation of our sales representatives, their expertise and dedication make them the natural choice when it comes to searching for your standards.
 

CLOSING COSTS

Closing costs are a list of charges your lawyer presents to you on the closing date of your home. Many people are surprised at the additional costs over and above the price of the home. According to the CMHC and Genworth Financial you should have at least 1.5% of the purchase price for closing costs in addition to the down payment (have around 2.5% to be on the safe side). The costs vary among provinces and cities.

Below you will find a brief explanation of these costs. Please note these are some of the closing costs you may encounter depending on your specific situation. Use this as a guideline then talk with your lawyer who can provide a more realistic estimate for your situation.

Appraisal Fee Generally Required with New Homes
An appraisal provides the lender with a professional opinion of the market value of the property. This cost is normally the responsibility of the and it can cost between $100 - $300.

Home Inspection Fee Generally Required with Resale Homes
A professional inspection of the home, top to bottom, is for the benefit of the buyer. A home inspection can cost anywhere from $300 - $400 and is well worth the investment. When hiring a home inspector make sure the inspector has liability insurance just in case they overlook something.

Fire Insurance
Mortgage lenders require a certificate of fire insurance to be in place from the time you take possession of the home. The amount required is generally the amount of the mortgage or the replacement cost of the home. This cost can vary on the property size, amount of coverage, the insurance company and the municipality. The cost can vary anywhere from $250-$600 annually for most properties.

Provincial Sales Tax on Mortgage 

Insurance
If your mortgage is insured, (CMHC or Genworth Financial), you will be required to pay the applicable taxes on the insurance premium on closing. While the insurance premium can be added to the mortgage amount, the tax must be paid at closing.

Land Survey Fee or Title Insurance Fee
A recent survey of the property is usually required by lenders. If one is not available the cost can range between $600 - $900 for a new survey. In lieu of the survey most lenders today will accept title insurance which can cost considerably less.

Legal Costs and Disbursements
Lawyers and notaries charge fees for their services involved in drafting the title deed, preparing the mortgage, and conducting the various searches. Disbursements are out-of-pocket expenses incurred during the process such as registrations, searches, and supplies.

Land Transfer Tax
Most provinces charge a land transfer tax payable by the purchaser. The amount varies depending on the province. Land transfer tax is based on the purchase price. First time home buyers purchasing a new home may be entitled to a refund.

New Home Warranty
In most provinces new homes are covered by a new home warranty program. The cost to the purchaser for this warranty is approximately $600 and should the builder default or fail to build to an agreed-upon standard the fund will finish or repair the deficiencies to a maximum amount. For more information on Ontario new home warranty visit http://www.tarion.com.

HST
HST is payable on the purchase of a newly constructed homes only. If you are purchasing a new home make sure you know who pays this, you or the builder. On the offer the purchase price will say "Plus HST" or "HST Included" and who gets any HST rebates. Many builders have included this cost into the purchase price so the buyer does not have to come up with it at closing.

Closing Adjustments
An estimate should be made for closing adjustments for bills the seller has prepaid such as property taxes, utility bills, and other charges. Any bills after the closing date are the responsibility of the purchaser. A lawyer will let you know what they are once the various searches have been completed.

We only collect personal information necessary to effectively market and sell the property of sellers, to assess, locate and qualify properties for buyers and to otherwise provide professional services to clients and customers. We do not sell, trade, transfer, rent or exchange your personal information with anyone.
 

LAND TRANSFER TAX

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.

ONTARIO
  • Land Transfer Tax ( go to calculator )
  • 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
BRITISH COLUMBIA
  • Property Purchase Tax
  • Up to $200,000 X 1 % of total property value
  • From $200,000 up X 2 % of total property value
MANITOBA
  • 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
QUEBEC
  • Transfer Tax 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 value
NOVASCOTIA
Land Transfer Tax

Halifax Metro

1.5 per cent on total property value

Outside Halifax County

Check with local municipality.
 

TITLE INSURANCE

Title insurance is growing in popularity in Canada. But what is it exactly? Should you get it? Do you need it? Whether title insurance is right for you is something you should discuss with your lawyer, as it depends on the circumstances of your transaction. This article will provide you with some background information about title insurance to help you make an informed decision.

Title to Property
Title is the legal term for ownership of property. Buyers want "good and marketable" title to a property - good title means title appropriate for the buyer's purposes; marketable title means title the buyer can convey to someone else. Prior to closing, public records are "searched" to determine the previous ownership of the property, as well as prior dealings related to it. The search might reveal, for example, existing mortgages, liens for outstanding taxes, utility charges, etc., registered against the property. At closing the buyer expects property that is free of such claims, so normally they must be cleared up before closing. For example, the seller's mortgage will be discharged and outstanding monetary expenses (such as taxes and utility charges) will be paid for (or adjusted for) at closing.

Sometimes problems (or defects) regarding title are not discovered before closing, or are not remedied before closing. Such defects can make the property less marketable when the buyer subsequently sells and, depending on the nature of the problem, can also cost money to remedy. For example, the survey might have failed to show that a dock and boathouse built on a river adjoining a vacation property was built without permission. The buyer of the property could be out-of-pocket if he is later forced to remove the dock and boathouse. Or, the property might have been conveyed to a previous owner fraudulently, in which case there is the risk that the real owner may come forward at some point and demand their rights with respect to the property.

Who is Protected With Title Insurance?
Title insurance policies can be issued in favour of a purchaser (on new/resale homes, condos and vacation properties), a lender, or both the purchaser and lender. Lenders will sometimes require title insurance as a condition of making the loan. Title insurance protects purchasers and/or lenders against loss or damage sustained if a claim that is covered under the terms of the policy is made. Types of risks that are usually covered under a title insurance policy include: survey irregularities; forced removal of existing structures; claims due to fraud, forgery or duress; unregistered easements and rights of-way; lack of pedestrian or vehicular access to the property; work orders; zoning and set back non-compliance or deficiencies; etc. For a risk to be covered, generally it has to have existed as of the date of the policy. As with any type of insurance policy, certain types of risks might not be covered, for example, native land claims and environmental hazards are normally excluded. Be sure to discuss with your lawyer what risks are covered and what are excluded.

The insured purchaser is indemnified for actual loss of damage sustained up to the amount of the policy, which is based on the purchase price. As well, some policies have inflation coverage, which means that if the fair market value of the property increases, the policy amount will also increase (up to a set maximum).

How Long is the Insurance Coverage?
In the case of title insurance covering the purchaser, title insurance remains in effect as long as the insured purchaser has title to the land. Some policies also protect those who received title as a result of the purchaser's death, or certain family members (e.g., a spouse or children) to whom the property may have been transferred for a nominal consideration.
In the case of title insurance covering a lender, the policy remains in effect as long as the mortgage remains on title. A lender covered under a title insurance policy is insured in the event the lender realizes on its security and suffers actual loss or damage with respect to a risk covered under the policy. Lenders are usually covered up to the principal amount of the mortgage.

The premium for title insurance is paid once (at the time of purchase). Generally speaking, in Canada the purchaser of the property pays for the title insurance, though there can be situations where the seller pays for it. Some policies automatically cover both the purchaser and lender; others will cover both for a small additional fee.

Protection and Peace of Mind
Title insurance can help ensure that a closing is not delayed due to defects in title. And, if an issue relating to title arises with respect to a risk covered under the policy, the title insurance covers the legal fees and expenses associated with defending the insured's title and pays in the event of loss.

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