Marnie Campbell Realty Team Education Series
Become an Informed Home Buyer
Become an Informed Seller
Getting Ready to Buy a Home
Congratulations on taking this first step toward buying a home. Pride of home ownership is indeed one of life’s greatest joys and biggest accomplishments.
Working with our team can give you peace of mind and it doesn't cost you anything as a buyer. From the beginning of your home search through your possession, there’s an awful lot to think about and do. It’s our job to help you avoid mistakes and take the stress out of the buying process.
1. Home Buying Mistakes to Avoid
Buying a home is often the largest purchase a person will make in their lifetime, so it’s especially important to avoid those common and potentially costly home buyer mistakes.
You've probably heard that you should pre-qualify or be pre-approved for a mortgage if you're looking to buy property. These are two key steps in the mortgage application process. Some people use the terms interchangeably, but there are important differences that every home buyer should understand.
You want to have a pre-approved mortgage before searching for a home to ensure that you are looking in your correct price point and you know what your monthly mortgage payments will be.
- Pre-qualifying is just the first step. It gives you an idea of how large a loan you'll likely qualify for.
- A lender has given you an approximate figure of what you can borrow, based on a few general questions about your income, debt and credit situation.
- Pre-approval is the second step, a conditional commitment to actually grant you the mortgage.
- You will receive written confirmation indicating the mortgage amount you can afford, at a fixed interest rate, for a specific period of time.
Closing cost are expenses you incur on top of your mortgage and are typically due upon your closing (possession) date.
1. Down Payment
A down payment is the part of the home price that does not come from the mortgage loan. The down payment comes from your own money. You can buy your home with a minimum down payment of 5%, if you have mortgage loan insurance from CMHC. You need a down payment of at least 20% for a conventional mortgage.
The deposit is paid when you make an Offer to Purchase to show that you are a serious buyer. The deposit will form part of your down payment with the remainder owing at time of closing. If for some reason you back out of the deal without having covered yourself with purchase conditions, such as financing, home inspection, etc., your deposit may not be refundable and you may be sued for damages. The size of the deposit varies depending on the price range of the property.
3. Home Loan Insurance
To purchase a home you must have a minimum 5% down payment. If your down payment is under 20% it is considered a high ratio mortgage and you must account for home loan insurance, provided by the Canadian Mortgage and Housing Company (CMHC) or Genworth Financial.
Insurance fees typically range from 1-3% of the mortgage principal and depend on the borrowing amount and percentage of down payment. Insurance fees can be added to the principal of your mortgage and paid monthly or paid upon closing.
4. Legal Fees
Closing your property will require the use of a lawyer.
5. Appraisal Fee
Your mortgage lender may ask you to pay for a recognized appraisal in order to complete a mortgage loan. An appraisal is an estimate of the value of the home.
6. Home Inspection Fee
A home inspection condition is typically a condition on your Offer to Purchase. A home inspection is done by a qualified home inspector to provide you with information on the condition of the home
7. Title Insurance
Your lender or lawyer may suggest that you get title insurance. This will cover loss caused by defects of title to the property.
8. Prepaid Property Taxes
Property taxes are charged by the municipality where the home is located. They are based on the value of the home. The seller may have already paid property tax or other expenses that apply to the time after the house passes into your hands, do you will need to pay the seller back.
9. Property Insurance
The mortgage lender requires you to have property insurance because your home is security for the mortgage. Property insurance covers the cost of replacing your home and its contents in case of loss. Property insurance must be in place on closing day.
10. Other Costs
Depending on your situation, you may have some other initial expenses to consider are moving expenses, renovations or repairs, condominium fees, utility fees (telephone, gas, electricity, cable TV, satellite TV, Internet etc.) and renovations (paint, new carpet, refinish floors etc.)
Getting Ready to Sell Your Home
When we say we are “redefining service in real estate, we mean it! Our clients come first. We will educate you on what needs to be done to have a successful sale of your home. There are many components to a successful real estate transaction; you can count on us to be there every step of the process and make sure no detail is overlooked.
Home seller mistakes to avoid
- Real estate purchase contracts call for the buyer’s lawyer to deliver closing funds to the seller’s lawyer on or before noon of the closing date.
- On receipt of sale proceeds, the trust cheque gets deposited in your (the seller’s) lawyer’s trust account.
- Once that is done, your lawyer is in a position to pay out your old mortgage, Realtor’s commission, and any other items you have directed to be paid.
- Your real estate lawyer will then contact a member of our team to let us know keys are releasable.
- A member of our team will then contact the buyer's Realtor to let them know they can hand over keys to the buyer(s).
- How long have you been in the business?
A freshly-licensed Realtor can do a wonderful job and will have up-to-date training; those in the business longer bring more practical experience to the table.
- How many homes have you sold?
If you want a exceptional Realtor, the person selling your home should be better than average. The average Calgary Real Estate Board Realtor sells 4-5 homes a year.
- How will your marketing plan meet my needs?
Specifically, how will you sell my home?
- What will you do that is different from the competition?
Ask if staging, professional photography, video tour etc. are part of their service.
- How much is your commission?
Real estate fees or commission are negotiable and may vary from broker to broker. Ask what is included with a broker’s fees.
- Can you help me find other professionals?
Your Realtor® may be able to provide a list of service providers who can help with things such as repairs, renovations, legal and financial advice.
- What if we aren’t a good fit?
If you sign a listing agreement with the Realtor and later find that you are unhappy with the arrangement, will the Realtor let you cancel the agreement?