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Once you have been pre-approved for the home price range you feel you can afford, the house-hunting can begin in earnest! Follow these simple steps to acquiring your dream home.
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Identify "Needs" vs. "Wants" – We have all been accused at one time or another of having "champagne tastes and a beer budget". Take some time as a family to decide what you really need in a home. Be honest and objective as you define what would be "nice to have" as opposed to "absolutely necessary". Consider all aspects of a home: urban/rural setting, house age, proximity to schools/public transportation, willingness to renovate, lot size/useability, number of bedrooms/bathrooms, special features like workshop, swimming pool, air-conditioning or fenced yard. Then share the results of this exercise with me so I can show you only the most appropriate homes.
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Make a "Scoresheet" – Seeing multiple properties in a short time can create a blur of features, styles, room layouts and maintenance issues. I encourage prospective buyers to develop and carry their own "checklist" with them as they view homes. Assess the following:
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Does the house (and the neighbouring homes/yards) appear generally well-maintained?
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Does the house appear structurally sound (roof, foundation, brickwork, floors, staircases, decks)?
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Is there any evidence of water leaks on the walls, ceilings or basement?
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Has the house been updated over time (windows/doors, electrical panel, plumbing supply and waste systems, soffit/fascia/eavestrough)?
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Is there sufficient storage space?
A scoresheet can help you remain objective and narrow your choices as you review each home’s merits and its ability to meet your "needs vs. wants" checklist.
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Assess the True Financial Impact – While mortgage pre-approval is extremely helpful, when you are ready to make an offer on a property, you need to be able to cover all the potential costs:
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Item
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Description
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Approximate Cost
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Downpayment
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The amount of cash you have identified to your mortgage provider as available to put directly toward your purchase
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Normally 25% of the purchase price for a conventional mortgage; between 5 – 25% for a high ratio mortgage
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Additional Mortgage Insurance
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For low downpayment, high ratio mortgages, a mortgage loan insurance premium is assessed
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Normally up to 3.75% of the mortgage value added onto the mortgage
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Deposit on Offer
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Considered as part of the down payment and held in the listing realtor’s trust fund until closing
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Varies depending on price of house, but usually $1000
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Home Inspection
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Recommended as a condition of purchase to identify potential problems
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Varies, but usually $250-$300
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Survey or Title Insurance
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An updated survey is recommended; title insurance can be purchased in lieu of a survey to cover loss caused by defects of title to the property
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Survey usually $1000
Title Insurance $300
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Legal Fees and Disbursements/ Adjustments
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Your lawyer will handle the necessary legal transactions to close the purchase of your home, including payment of fees to register the mortgage and deed and to adjust property taxes and utilities
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Legal Fees usually $800 - 1000
Disbursements vary, usually $800 -1000
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Land Transfer Tax
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This cost is formula-based and is a percentage of the property's purchase price
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As an example, cost would be $1525 on a $180,000 home
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Property Insurance
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Home insurance must be obtained prior to closing.
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Varies, depending on value of home, but usually $400 - 800
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Miscellaneous Costs
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In addition to moving costs, don’t forget you may need appliances, service hook-ups, window treatments and gardening/snow-clearing equipment.
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Have a small "emergency" fund available
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Make your Offer – When you’re convinced you’ve found your dream home and are financially prepared to purchase, we’ll make an offer. I’ll draft an offer that protects your interests using clauses conditional on home inspection, financing or selling your existing home. Together we’ll ensure that the price, deposit and inclusions/exclusions get you the best deal possible, and that the closing date meets your needs. As a skilled negotiator, I can presents your offer directly to the vendors and their agents, improving the chances of acceptance. If necessary, I will guide you through the counter-offer process to ensure we secure your dream home.
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