The Home Buying Process

Take a drive or walk through prospective neighbourhoods, talk to local residents and make note of these items:

• Are the homes in your general price range?
• Does the style of architecture, age of the homes and layout of the community appeal to you?
• Is there good access to public transit and major roads?
• Are public facilities – parks, roads and sidewalks – in good condition?
• Is there access to the amenities that are important to you?
• Are you close to family and friends?
• Are there medical facilities in the area?
• How do the municipal taxes compare to those in other areas?
• Does the area have the potential to increase in value/popularity?
• Are there any bylaws or development plans that could affect the desirability of the neighbourhood?

Talk to a mortgage representative (lender)

The first step in buying a home is to talk to a mortgage representative. A qualified lender will help you get pre-approved, understand what you can afford, determine what kind of mortgage is right for you and arrange for a property appraisal. Be prepared with the following information:

• The amount of your down payment and where it’s coming from
• Proof of your income and employment
• Monthly expenses
• Your debts and assets

Choose a realtor

Select a realtor based on referrals from friends, family, or people you work with as well as the realtor’s experience and personality. You’ll spend a lot of time with this person, so make sure you like them. Some agents specialize in specific areas or types of housing (condos, for example), which may be useful. Real estate professionals must have a provincial licence. A good realtor will show you homes that meet your personal situation and financial requirements, prepare the Offer to Purchase and help you negotiate the price. Remember, realtors’ fees are paid by the seller, and are not paid by you, the buyer.

Working with a builder

If you are considering a new home, you’ll likely deal with a builder or sales person. Visit the builder’s sales office and model homes and ask about new-home warranties and after-sale service. Also, inspect previous projects by the builder and try to speak to current owners about their satisfaction. Remember, if you choose to buy a new build, you will have to pay GST/HST on top of your purchase. If you choose an older home, GST/HST costs do not apply.

Selecting a lawyer

To help you get the home you negotiated, at the price you agreed to pay, you’ll need the services of a lawyer (or a notary in Quebec). Your lawyer will conduct the title search, closing arrangement and can provide you with legal advice to help alleviate first time home buyer jitters.

Others

Throughout your home buying process, you may need additional services. People you may need to call on include a home inspector, a contractor, an appraiser or a home insurance agent/broker to help you complete your purchase and help you get your home in order.

Once you’ve got your homebuying team on your side, you’ll need to get pre-approved for your mortgage. You’re then ready to start looking for your new home.

BMO Pre-Arranged Mortgage

To get your pre-approval, talk to a BMO Mortgage Representative about a BMO Pre-arranged Mortgage. Going through this process is beneficial for a number of reasons. If you qualify, you’ll get guaranteed financing which will be helpful when you go to make your offer. You’ll find out how much you can borrow, and what your monthly payments will be. If you choose a fixed interest rate, then you’re guaranteed the rate during your 90-day pre-approval period. Basically, a pre-arranged mortgage tells you exactly what you’re getting into before you get into it. And, when it comes time to make an offer, you’ll be ready.

Prior to this time, your lawyer will carry out a title search to make sure the seller has clear title to the home, and if necessary, arrange a survey of the property. He or she will draw up the purchase and mortgage documents. BMO Bank of Montreal will complete the mortgage arrangements, and advance funds to the seller on your behalf.

At closing you will meet with your lawyer to sign the documents, pay the remainder of the down payment, and cover the closing and other one-time costs. Remember to budget at least 3-4% of the purchase price for closing costs (cash-on-hand) and other one-time costs over and above your down payment. These costs may include:

• Mortgage default insurance (if applicable)
• Home appraisal fee
• Land survey fee or Certificate of Location cost
• Title insurance
• Home inspection fee (+ water quality inspection fee if source of water is a well)
• Legal fees
• Prepaid taxes, utility bills and other charges
• Municipal and Provincial tax (also called land transfer tax, property tax transfer, land registration fees, deed registration fee or tariff)
• GST/HST if your home is new
• Estoppel Certificate fee if buying a condo or strata unit (except in Quebec)
• Fire/property insurance
• Moving expenses
• Additional expenses like hook-up charges, or repairs