What Professionals Should You Call On?
Even if this isn’t your first homebuying experience, you’ll want to get help from a team of professionals. Having the help of professionals will give you experienced and knowledgeable people for reliable information and answers to your questions. These are the people who can help you:
•Lenders or mortgage broker
•Lawyer or notary
•Builder or contractor
You will be doing a lot of interviewing to establish your team. Use this handy CMHC worksheet to help you keep track of the people you interview and the ones you finally choose.
The next sections describe each professional role.
Your realtor’s job is to:
•Help you find the ideal home
•Write an Offer of Purchase
•Negotiate to help you get the best possible deal
•Give you important information about the community
•Help you arrange a home inspection
Finding a Realtor
When looking for a realtor, don’t be afraid to ask questions — especially about possible service charges. Normally, the seller pays a commission to the agent. But, some realtors charge buyers a fee for their services. Use the CMHC worksheet Checklist for Evaluating Realtors to help you.
If you would like to know more about a realtor’s ethical obligations, go to the Canadian Real Estate Association’s website at www.crea.ca, or call your local real estate association.
The Lender or Mortgage Broker
Many different institutions lend money for mortgages — banks, trust companies, credit unions, caisses populaires (in Quebec), pension funds, insurance companies, and finance companies. Different institutions offer different terms and options — shop around!
Mortgage brokers don’t work for any specific lending institution. Their role is to find the lender with the terms and rates that are best for the buyer.
Finding a Lender or Mortgage Broker
•Ask around. Your realtor, another professional, family members, or friends may give you helpful suggestions.
•Look in the Yellow Pages™ under “Banks,” “Credit Unions” or “Trust Companies” for a lender and under “Mortgage Brokers” for a broker.
•Contact the Canadian Association of Accredited Mortgage Professionals at 1-888-442-4625, or visit the Association’s website at www.caamp.org.
Having a lawyer/notary involved in the process will help ensure that things go as smoothly as possible. You need a lawyer (or a notary in Quebec) to perform these tasks:
•Protect your legal interests by making sure the property you want to buy does not have any building or statutory liens, charges, or work or clean-up orders
•Review all contracts before you sign them, especially the Offer (or Agreement) to Purchase.
Finding a Lawyer
Law associations can refer you to lawyers who specialize in real estate law. In Quebec, contact the Chambre des notaires du Québec for the names of notaries specializing in real estate law.
Remember that a lawyer/notary should:
•Be a licensed full-time lawyer/notary
•Live/work in the area
•Understand real estate laws, regulations and restrictions
•Have realistic and acceptable fees
•Be able and willing to explain things in language you can easily understand
•Be experienced with condominiums, if that’s what you are buying
Lawyer/notary fees depend on the complexity of the transaction and the lawyer’s expertise.
Shop around for rates when choosing your lawyer/notary. Use the CMHC worksheet Checklist for Selecting a Lawyer/Notary to guide you.
The Insurance Broker
An insurance broker can help you with your property insurance and mortgage life insurance.
Lenders insist on property insurance because your property is their security for your loan. Property insurance covers the replacement cost of your home, so the size of your premium depends on the value of the property.
Your lender may also suggest that you buy mortgage life insurance. Mortgage life insurance gives coverage for your family, if you die before your mortgage is paid off. Your lender may offer this type of insurance. In this case, the lender adds the premium to your regular mortgage payments. However, you may want to compare rates offered by an insurance broker and by your lender.
Don’t confuse property insurance, or mortgage life insurance, with mortgage loan insurance.
The Home Inspector
Whether you are buying a resale home, or a new home, consider having it inspected by a knowledgeable and professional home inspector.
The home inspector’s role is to inform you about the property’s condition observed at the time of the inspection. The home inspector will tell you if something is not working properly, needs to be changed, or is unsafe. He or she will also tell you if repairs are needed, and maybe even where there were problems in the past.
A home inspection is a visual inspection. It should include a visual assessment of at least the following:
•Doors and windows
•Roof and exterior walls (except winter)
•Plumbing and electrical systems (where visible)
•Heating and air conditioning systems
•Ceilings, walls and floors
•Insulation (where visible)
•The lot, including drainage away from buildings, slopes and natural vegetation
•Overall opinion of structural integrity of the buildings
•Common areas (in the case of a condominium/strata or co-operative)
Finding a Home Inspector
It’s important to hire a knowledgeable, experienced and competent home inspector. In most areas of Canada, there are no licensing or certification requirements for home inspectors. Anyone can say that they are a home inspector without having taken any courses, passed tests or even inspected houses. So look for a home inspector who belongs to a provincial or industry association holds an accreditation that demonstrates training and experience, provides inspection reports, carries insurance, provides references and has strong experience with the type of home to be inspected.
While CMHC does not recommend any individual home inspector or association, CMHC supports a common national occupational standard for home inspectors such as the home inspection industry’s voluntary and independent national certification program.
Home inspector fees range, depending on the size and condition of the home.
Before you make an offer, an independent appraisal can tell you what the property is worth. This will help ensure that you are not paying too much. In order to complete a mortgage loan, your lender may ask for a recognized appraisal.
The appraisal should include:
•Unbiased assessment of the property’s physical and functional characteristics
•Analysis of recent comparable sales
•Assessment of current market conditions affecting the property
Finding an Appraiser
Ask your realtor to help you find an appraiser.
The Land Surveyor
If the seller does not have a Survey or Certificate of Location, you will probably need to get one for your mortgage application. If the Survey in the seller’s possession is older than five years, it needs to be updated.
Remember that you must have permission from the property owner before hiring a surveyor to go onto the property. Ask your realtor to help co-ordinate this with the owner.
Finding a Land Surveyor
Search the web or Yellow Pages™ or ask your realtor to help you find a land surveyor.