Choosing Your Home-buying Team

When you talk to a potential lender, be upfront about what you want and make sure you feel comfortable dealing with this individual and their institution. You also want to be clear on prepayment options and prepayment charges for terminating the mortgage early. This is often overlooked by first-time homebuyers and comes as a surprise if the need ever arises to end a mortgage early.

An advantage of building a relationship with a lender early is that you can arrange for a preapproved mortgage so you will know how much home you can afford. Without a preapproval, you risk spending time looking for a home that may be above your price range and then be disappointed when you are not approved for the full mortgage amount. A preapproved mortgage qualifies you for mortgage financing at an interest rate that is typically guaranteed for 120 days from the time that preapproval is granted

You can start getting familiar with your options by trying out online mortgage calculators, like Scotiabank’s What Can I Afford? tool.

With this knowledge, a licensed real estate professional can:

• Inform you of the state of the house or condo market and evaluate potential neighbourhoods.
• Review available homes and screen ones that fit your criteria and budget.
• Arrange viewings for short-listed properties and highlight positives and negatives of each property.
• Help you prepare and submit your offer to purchase. Your realtor should also help you determine what is a fair market value of the home you are submitting an offer on, and help negotiate the best deal.
• Advise on when to involve other professionals like a lawyer and home inspector.
• See the transaction through to a successful conclusion.

Before choosing an agent, interview them like you would a potential employee or investment advisor to ensure they can demonstrate expertise in the buying process and have specific knowledge of the neighbourhood you are looking to buy into. Ask potential realtors how long they have been in business and how many buyers they have assisted in the area that interests you.

Your real estate lawyer will:

• Perform a title search on the property.
• Ensure there are no outstanding disputes regarding property lines.
• Ensure there are no liens, mortgages, or taxes owing on the property.
• Arrange the transfer of title, and payment of land transfer fees and taxes.
• Take care of all closing arrangements, including the transfer of keys from the vendor's lawyer.
• In some cases, you may want to involve your lawyer upfront when submitting your offer. Ask your real estate agent if this is recommended for the home you are considering.

When choosing a real estate lawyer, consider referrals from your real estate agent, friends, family or associates, or contact the law society to find one who specializes in real estate law. If you are buying a condo, choose a lawyer with relevant experience since condos have unique ownership characteristics and rules.

Take care when choosing an inspector, as most anyone can claim to be one. Most provinces have associations that require inspectors to meet professional standards, such as the Ontario Association of Home Inspectors (OAHI). You can also find more information about home inspectors from the Canadian Association of Home and Property Inspectors (CAHPI).

Home inspectors often have a "no fault" clause, meaning that if something is found after you move into your home, they are deemed not responsible. Other inspectors may have professional insurance to cover this, so be sure to ask upfront.

Again, be sure to hire a home inspector that has specific expertise with the neighbourhood and style of home you are considering purchasing.

If you have contents insurance for your apartment, you’ll need to have this transferred to a new policy. Also, you should consider mortgage protection coverage in case you or your spouse experience a critical life event, like a serious medical issue, which could impact your household income and your ability to maintain your mortgage.

Your insurance broker can help you decide on the type of coverage you need and find the best available rates. As with all the above professional services, it can pay to shop around to find the best services to suit your needs.