THE FINAL STEPS
You've finally found the perfect home and are ready to make an offer. You and your Realtor will need to determine what price to offer and fill out a standard form called the Contract of Purchase and Sale. Your Realtor will present your offer to the seller, who will accept, reject or make a counter-offer.
Negotiating and Acceptance
If your offer is accepted you will still need to remove the subject clauses
before the sale is finalized. If your offer is rejected, there is no deal and
that is the end of the transaction. If the seller presents a counter-offer
in which some of the terms are changed, you are then free to accept
the counter-offer, reject it or make a counter-offer.
Once your offer is accepted you will need to carry out a number of steps and fulfill certain legal requirements before the completion of the transaction.
- Pay the deposit amount you agreed to in the contract. This will be kept in trust and will become part of your down payment.
- Have the home inspected. Most Realtors recommend that you have your home inspected by a certified home inspector.
Ask your Realtor for a list of qualified inspectors.
- Satisfy the conditions and subject clauses set out in the contract. For example, if you made the sale subject to a certified inspection, you will have to complete the inspection by the stated date. If the findings from the inspection report are not to your satisfaction, then the condition wasn't met and the contract will terminate.
- Finalize your mortgage. You will need to send your lender a copy of the Contract of Purchase and Sale and an up-to-date land survey of the property. The lender will also arrange to have an appraisal of the property done.
Purchase Homeowners' Insurance.
- Hire a lawyer or notary public. Your Realtor will send your lawyer/notary a copy of the signed Contract of Purchase and Sale.
Your lawyer/notary will:
- Search the title to make sure it is free of complications
- Make sure the property taxes are up to date
- Prepare all the documents to transfer ownership to you
- Ensure that the seller's mortgage is discharged
- Prepare a Statement of Adjustments showing the money you owe
- Arrange for the transfer of money from your lender to the seller
- Ensure you are registered as the owner in the Land Titles Office
The Completion Day is the day you legally get ownership of the house. There are several things that will take place.
- Your bank will provide the mortgage money to your lawyer/notary
- You must pay the balance owing, including the down payment, legal fees, property transfer taxes,
and any other remaining completion costs. See Completion Costs Guide below.
- Your lawyer/notary will pay the seller and register the home in your name with the Land Title Office
- You will get the keys to your new home
Congratulations! You are now able to move in to your new home.
COMPLETION COSTS GUIDE
If you buy a newly constructed home, you must pay the 6% GST. However, if your house is less than $450,000
you may be eligible for a rebate.
For more information, please visit www.cra-arc.gc.ca/tax/business/topics/gst/construction/menu-e.html
Property Transfer Tax:
When a residence is purchased a Property Transfer Tax (PTT) is applied. The tax is calculated at 1% on the first $200,000
and 2% on the remainder. The First-Time Home Buyers' Program offers an exemption to PTT if the fair market value of the residence is $325,000 or less, in the Greater Vancouver, Fraser Valley and Capital Regional Districts. The threshold for the rest of BC is $265,000. In all regions there is also a proportional exemption for first-time buyers of homes with a fair market value up to $25,000 above the thresholds. This means in the Greater Vancouver area, homes valued up to $350,000 ($325,000 threshold + $25,000 proportional exemption) will be charged a pro-rated PTT.
For more information please visit: www.rev.gov.bc.ca/rpt/ptt/ptt.htm
Prepaid property taxes or utility bills:
You will have to reimburse the sellers for any prepaid property taxes or utilities.
Mortgage loan insurance and application fee:
If you get a high-ratio mortgage (a mortgage where you pay less than a 25% down payment) you will have to buy mortgage loan insurance from CMHC or a private company. If you qualify for a 5% down payment, CMHC charges an insurance fee that equals 3.25% of the mortgage. If you put 10% or 15% down, your insurance fees will decrease to 2% and 1.75% respectively. The insurance premium usually gets added to your mortgage.
You will also have to pay an application fee:
CMHC's standard fee is $235. CMHC also offers a basic service for a $75 fee but it must be accompanied by an appraisal.
Before your lender approves your mortgage, you may be required to have an appraisal done. Sometimes your lender covers this cost otherwise you are responsible for covering this cost. The fee ranges from $150 to $350.
Your lender may require an up-to-date survey of the property. If the seller did not provide you with one, you will have
to pay to have one done. The fee ranges from $150 to $350.
Home Inspection fee:
Most Realtors recommend that you get a home inspection by a certified home inspector. It will cost you from
$150 to $350 for a smaller house. Large houses may cost more.
Lawyers/Notaries fees for closing the sale range according to the complexity of the deal but they will probably
be at least $400.
Disbursements to Land Titles Office:
These fees are approximately $300. Your lawyer/notary will arrange this payment.