If you are about to buy your first home, or it has been a while since you last purchased, here is a summary of what to expect.
This is likely the largest purchase you have ever made. Take your time, do your homework and get advice from those knowledgeable in the field. A good realtor can help to educate you on what is available, for what price, and point out features that may affect your ability to sell the property in the future. They will also prepare an offer when you find what you are looking for. Your realtor will be paid by the seller.
Your mortgage broker or banker can get you “pre-approved” so you will know your price range. Better to get the needed information ahead of time to prevent any surprises related to your financial situation from causing delays (or scuttling the deal) when you have located a potential home.
Your lawyer can review the offer before it is accepted and becomes a contract. The agreement of purchase and sale typically has some fairly standard small print, but also a number of blanks for other items to be filled in. It will also contain “conditions”, which are there for your protection. For example, the deal is typically conditional upon you being approved for financing (any pre-approval you might have is a helpful first step, but it will still depend upon things like the bank being satisfied that the home has a sufficient appraised value in relation to the purchase price), upon a satisfactory home inspection, and upon there being clear title to the property.
Once the offer is accepted, your lawyer will await confirmation that the financing has been approved and the results of any home inspection are acceptable. If issues with the condition of the home are uncovered, your realtor should assist you in negotiating a reduction in the purchase price, or adding a requirement that the seller repair or replace certain things, or putting an end to the deal. The law is “buyer beware”, so careful inspection is required even if a property condition disclosure statement has been provided by the seller.
When all conditions have been satisfied or waived, your lawyer will search title, communicate with the seller’s lawyer, receive mortgage instructions from your lender, prepare mortgage documents for your signature. Your lawyer will meet with you prior to closing to review and sign mortgage and other documents, and receive funds from you that are required to close.
On the day you pay for the home and get the right to move in, known as “closing”, your lawyer will receive mortgage funds from your lender, meet with the seller’s lawyer to exchange documents and funds, and then let you know the home is yours. Make sure you check with your lawyer before arranging a time for movers to arrive, or for any service providers to get access to your new home.
Following closing your lawyer will send a report to you and to the lender, so you will have copies of relevant documents for your file.
For more information, please contact us.