So…You've Decided to Buy!
Buying a cottage or home is more than just looking at properties. It's finding the right property, at the right price, in the right location, with the amenities you expect in the minimum amount of your time! The best way to reach these goals are to work with a full time professional realtor who understands the local market and recognizes your needs and wants.
Selecting Your Sales Representative (Agent)
It is important that your sales agent understands your needs. A good salesperson will define your needs before you are introduced to any property! Typical questions asked of a salesperson are:
  • Will you be representing my interests?
  • What is your sales history, experience and qualifications?
  • Are you ‘up to speed’ with current by-laws and regulations?
  • Do you understand the idiosyncrasies of waterfront properties?
  • Do you have access to M.L.S. information?
  • Will you look after the details to closing and possession?
  • Can you be contacted at any time?
A Sales Representative's Function
  • Provide information and current photos of the property.
  • Preview the property on your behalf to ensure it matches your needs and wants and report back to you in a timely manner.
  • Provide information on the area.
  • Negotiate a price and terms, agreeable to buyer and seller.
  • Assist in arranging a source of financing. (if necessary)
Working With Your Sales Representative
Let the salesperson do the searching and report back to you. Best value is often not found in newspaper ads or the internet. A well priced property will have already SOLD by the time you find out it’s available. In fact, most opportunities are on "hot sheets" available every morning to salespeople with access to M.L.S. information. A salesperson will commit time to you if you will commit loyalty to them. If you play the field, don’t expect their undivided attention.
Determine What You Can Afford
Mortgage Pre-Qualifier (click here) to determine how much you can afford to spend and what the payments will be.
Buyers can assist their ‘Agent’ by:
  • Providing details of your property needs, preferred location, size, price range, etc.
  • Provide financial information.
  • Communicate your likes and dislikes on each property so your agent can ‘fine tune’ his search.
  • Commit to the salesperson.
  • Pre-qualifying yourself at a financial institution so you can make an offer on that special property right away!
Establishing a Market Value
Market value by definition, is the price a willing buyer will pay and a willing seller will accept, each without being placed in undue pressure. Price is also affected by current market conditions (ie. Supply and demand). This is a fair price both buyer and seller. You may of course pay more than established market value if you find yourself in competing against another party who have submitted an offer.
Qualifying For Your Mortgage
Once you've made up your mind to make a purchase it is highly recommended that you get ‘pre-qualified’ at a financial institution of your choice. Most lending institutions will expect that you should pay no more than of 30% of your household income towards the mortgage. This is called the debt service ratio. The amount of money you will put down as a down payment plus the maximum amount of mortgage you qualify for will establish your buying price threshold.
Is it a good idea to get a pre-approved mortgage?
Absolutely!!! By being ‘pre-approved’ you have definite edge. A pre-approved mortgage also puts you in a strong bargaining position when you make an Offer to Purchase. If the seller wants to make a quick sale, you may be able to negotiate a price lower than the list price, because the seller knows that you are a serious buyer. On the other hand, if several people are bidding on the property you want, you may decide to offer at the list price or better, to beat out other offers.
Making an Offer:
When you find that perfect property, the next step is to put in an Offer to Purchase. The seller can either accept your offer, or make a counter offer with changes that would suit them, such as price, terms, closing date etc. or, they may elect to decline your offer.
The Offer to Purchase
The Offer to Purchase is a legally binding agreement between you and the seller of the property, it sets out:
  • Your name
  • The seller's name.
  • The address or legal description of the property.
  • The price you are prepared to pay for the home.
  • The items you expect to be included in the purchase price.
  • The amount of your cash deposit.
  • Financing arrangements, such as your mortgage.
  • The closing date.
  • Specific terms or conditions that must be met as part of the purchase.
  • A time limit for meeting these conditions.
Discuss the Offer to Purchase with your lawyer before you sign it. Remember, it becomes a legally binding agreement the moment it is accepted. If you decide to cancel an offer that has all ready been accepted, you could lose your deposit and the person selling the home could sue you for damages. If the seller does not accept your offer, your deposit will be returned.
When your offer is accepted
Your offer has been accepted. Good. You're now in the home stretch - finalizing the details of your mortgage and closing the purchase of your new home. Call your assigned Mortgage Specialist. Your Mortgage Specialist will need to receive the following documents and information:
  • A copy of the real estate listing.
  • A copy of the accepted Offer to Purchase.
  • Information on the source of your down payment.
  • Income verification if you are employed.
  • A letter from your employer verifying your place of employment and income, or T4s and Notice of Assessment, or T1 General Tax Return and Notice of Assessment.
  • Income verification if you are self-employed.
Processing the mortgage application
Your Mortgage Specialist will want to verify the value of the property you are buying, your current financial picture and your credit history, so a property appraisal and credit report will be ordered. Also, if your down payment is less than 25%, you may qualify for a high ratio mortgage on which you would have to pay insurance premiums. You decide whether you want to pay the premium in cash or have your lender add it to your mortgage amount. Your Mortgage Representative can contact Canada Mortgage and Housing Corporation (CMHC) or GE Capital Mortgage Insurance Company of Canada (GEMI) to make the arrangements. Be prepared to pay fees for the mortgage application, credit report and property appraisal.
Closing the purchase
Closing day is the day you become the official owner of your home. Typically, you visit your lawyer's office to review and sign documents relating to the mortgage, the property you are buying, the ownership of the property and the conditions of the purchase. Your lawyer will also ask you to bring a certified cheque to cover the closing costs and any other outstanding costs.Once your mortgage and the deed for the property are officially recorded, you become the official owner of the property.
Congratulations! You've just purchased a property in Muskoka!
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