Whether to first buy your new home or sell your old one is the greatest dilemma facing homeowners who are entering the mortgage market. If you choose to buy first, make sure that your house is marketable and that the offer to purchase is conditional on selling your current house. 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, since knowing how much money you’ll get on the sale will help you establish a price range for the new house. Selling first also allows you to negotiate the purchase more vigorously, since unconditional offers carry a lot more weight with sellers.
Market conditions are another important consideration. In a seller’s market, it’s probably better to sell after buying, but in a buyer’s market, it makes more sense to sell first. A mortgage broker from Mortgage for Less can help you navigate the market and make sure you have all the information you need for your mortgage purchase or home mortgage refinancing.
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, including 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!
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 pre-approved mortgage through Mortgage for Less, you can make your offer more attractive by excluding this condition.
A firm offer, has no conditions attached, and when the offer is accepted by the seller, the deal is complete. Sometimes the seller will ‘sign back’ your offer, making a counter-offer for a higher price or different terms. You decide, with your realtor’s help, whether you want to sign the counter-offer, prepare a new offer, or decline to make another offer on the home.
Before accepting an offer, it’s wise to have a lawyer or notary review it. If you don’t have a preferred lawyer or notary, Mortgage for Less 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 or notary plays an important part in finalizing the purchase of your home. He or she 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, 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 there is in the United States.Back