Steps
in the buying process::

Locate
a home on which you would like to make an offer. If it
is a private transaction and no real estate agent is involved,
have your lawyer draw up a contract of purchase and sale.
If there is a realtor involved, they can draw up the contract
for you and present it to the vendor for acceptance. Please
note that once the contract is accepted and signed by the
vendor, there is a firm and binding contract and it is too
late to change your mind or to ask for additional conditions
to be included in the contract. The only exception would be
for any "subject conditions" that you have written
into the contract. You may wish to include a provision that
your obligation to complete the Contract is subject to review
of the Contract by your lawyer.
Locate
a lawyer (if you haven't involved one in step one) to assist
you in closing your purchase. For many people the money
invested in the purchase of real estate is the largest expenditure
they'll ever make and we therefore recommend that you use
a lawyer rather than a notary public. A lawyer can provide
a legal opinion on the title and can assist if there are complications
in your transaction. We suggest that you call around and compare
costs. Neither lawyers nor notaries public mind giving an
estimate. Make sure, however, that the estimate includes fees
and disbursements. Disbursements are the expenses incurred
by the lawyer or notary public in handling your transaction
(for example, search fees, registration costs and delivery
and photocopying costs). Whether you are hiring a lawyer or
a notary public, it should be someone you trust. At some point
in the transaction, you will be paying a large sum of money
to that lawyer or notary public to hold and use in the purchase
of the property.
Locate financing. Since most of us are unable to pay
cash for a house, it will be necessary to locate a bank, trust
company or other lending institution to lend you money. Which
one to choose? We advise you to shop around and to carefully
evaluate the cost of financing by considering the following:
. mortgage
processing/appraisal fee a lending institution may charge
a fee for deciding whether to lend money to you.
. interest rate
. how often is the interest compounded (the more often it
compounded, the higher your effective rate of interest)
. amortization period
. prepayment penalties (for example, if you resell the home
before the end of the mortgage term)
. renewal fees at the end of the mortgage term
. does the lending institution require a survey certificate
or title insurance? If so, normally you will be responsible
for this cost.
Here is where your lawyer should take over for you to attend
the following things:
. review
final contract of purchase and sale
. order and review land title and tax searches
. provide you with an initial report on title and taxes
. prepare legal documents
. order forms from the building management company indicating
that the vendor has paid all fees owing to them (for condo.)
. forward documents to vendor for execution
. receive and review executed vendor's documents
. meet with you to review searches and documents and to have
you sign documents
. receive your money to use in the purchase
. present documents for registration at the land title office
. receive a post application search
. receive the lending institution's money to use in the purchase
. forward money to vendor
. if new property, hold back money for builders' liens
. interim report on title to you and to the lender
. receive State of Title Certificate
. release any holdback money
. final report on title to you.
Of particular
importance is the initial land title search, especially in
the case of condominiums where there are a number of dwelling
units sharing one building. In order to regulate the use of
the building by the various suite owners, the Strata Property
Act provides a set of bylaws to govern the conduct of the
people in the building. Any modifications to these bylaws
will appear on the land title search. Typical modifications
are to prohibit pets or rentals. In the case of some condominium
buildings, the buildings and lands are owned by the government
and the owners of the suite in fact only own leases.
While your lawyer is attending to step four, you will have
to attend to these items:
- open hydro and cablevision accounts
- arrange for telephone service
- arrange for insurance on the property or, for a condo, on
the contents of your suite (the management company places
fire insurance on the building)
- arrange to obtain keys through the real estate agent
- arrange for movers
Before making an offer to purchase, make sure you take into
account all the costs. The following items should be included
in your calculations:
Gross
purchase price
+ property transfer tax (1% on first $200,000, 2% on the balance)
[unless you qualify for exemption]
+ sales tax on appliances (applies only to purchase of a new
home)
+ legal fees and disbursements
+ municipal taxes (if the vendor has paid taxes for the whole
year, you will have to reimburse him for the portion of the
year you own the property)
+ maintenance fees (if the Vendor has paid maintenance fees
for the whole month, you will have to reimburse him for the
portion of the month you own the property)
-amount of mortgage
+ mortgage processing fee, interest adjustment cost, survey
certificate, legal fees and disbursements
+ insurance premium and insurance binder costs
+ if condo, any move in fees and certificate costs
= net amount of money you need

This article contains only a general overview and may not
discuss all items relevant to a particular transaction. Every
transaction is unique. For more information, please contact
your real estate agent or your lawyer.
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