Buying and Selling Tips

Buy first or sell first?

Which comes first--the purchase or the sale--is the greatest dilemma facing homeowners planning to move-up.

If you choose to buy first, make sure your current home is very marketable. That way, if you sell your house, both deals proceed; if not, the deal is off, and you won't be stuck with two homes.Selling first though will give you considerable peace of mind.

Knowing how much money you'll get on the sale will help you establish a price range for the new house. Selling first allows you to negotiate the purchase more vigorously, too, since unconditional offers carry a lot more weight with sellers.
Market conditions are another important consideration in deciding which route to follow. In a seller's market, you'll probably do better selling after you've bought, but in a buyer's market, it makes more sense to sell.

Making the offer

By this stage, you've found the house you want and it's within your price range. It's now time to proceed with the purchase. Your realtor will prepare the offer, stating the price, the down payment details, closing date, and any conditions attached to the purchase (such as the inclusion of appliances, light fixtures or window coverings, the sale of an existing home, or approval of financing).
If you have questions, this is the time to ask. Ensure the offer reflects your wishes. After all, it's your money!

An offer can be conditional or firm.

A conditional offer depends on certain conditions being met (e.g., the buyer being able to arrange a mortgage or sell an existing home; or on the vendor making certain repairs, producing a survey, or a building inspection). Many offers are conditional on making satisfactory mortgage arrangements. By obtaining a preapproved mortgage through Mortgage for Less, you can make your offer more attractive by excluding this condition.

The second type of offer to purchase is a firm offer.

In this case, there are no conditions attached, and when a firm offer is accepted by the seller, the deal is complete. Sometimes the seller will 'sign back' your offer, making you a counter-offer for a higher price or with different terms. You then decide, with your realtor's help, whether you want to sign the counter-offer, prepare a new offer, or decide not to make another offer on the home.
Before the offer is accepted, it's wise to have a lawyer/notary review it. If you don't have a preferred lawyer/notary we can recommend one. You'll need to provide a deposit cheque with your offer, to show the owner that you intend to make the offer legally binding if it's accepted. The deposit will be held in trust and returned to you if the vendor doesn't accept your offer.

Finalizing the deal

Your lawyer/notary plays an important part in helping you finalize the purchase of your home. S/he will prepare the necessary documents for your signature, conduct a title search, and obtain a land survey if the vendor didn't provide one. Your lawyer also verifies all the figures and prepares a statement showing how much has to be paid to the vendor, the balance of down payment, and adjustment costs. Adjustment costs include various closing costs, such as prepaid property taxes or utility bills, land transfer tax, and legal fees. Before closing, you'll need a certified cheque for the balance of your down payment and closing costs payable to your lawyer in trust. On closing day, the lender will provide your lawyer with the agreed mortgage funds to close the transaction. Your lawyer will register the property and the mortgage in your name, and obtain the keys and the deed for you. In Canada there is no escrow closing procedure like in the United States.