Canada being a developed North American country has a well defined and mature process when it comes to buying real estate. Like the United States, much attention and focus is given to protecting the rights of both the buyer and the seller. While at times this can result in excessive documentation, buyers must remember that following the process is in their interest.
It is strongly recommended that those looking to buy real estate in Canada get themselves pre approved if they are seeking a loan to buy real estate. A pre approval not only provides the buyer an estimate of the loan they can qualify for, it also gives the seller the necessary confidence in the financial ability of the buyer. In addition, a buyer with a pre approved loan can now focus on the properties that are in line with their budget rather than spending time and money on finding properties which later turn out to be beyond their financial capacity.
A good place to start for a buyer of real estate in Canada is to find a licensed real estate agent. A licensed real estate agent who understands the budget and the kind of house the buyer is looking for can more often than not find properties which are hard to find otherwise. A licensed real estate agent can also help a buyer of real estate property prepare and submit purchase offer, negotiate with the seller or the seller¡¯s agent and help ensure that the entire process is smooth and transparent to the buyer. In addition to a real estate agent, a buyer of real estate in Canada will also need the services of a lawyer or a notary if the buyer is purchasing the real estate in Quebec. The lawyer (or the notary) will ensure that all the processes are followed and help ensure the legal interest of the buyer of the real estate.
After identifying the property, the next step in the process is to furnish a legal document to the seller known as an ¡®Offer to Purchase¡¯ or ¡®Agreement of Purchase and Sale¡¯. If the buyer has a real estate agent or a seller, they will prepare the document for the buyer and ensure that the terms and conditions stated in the document along with the price are what the buyer and the seller had agreed to. Typically, the document undergoes several revisions as the seller and the buyer review it to ensure their interests are honored in the document. Once the terms and conditions have been agreed, the agreement becomes final.
The buyer of real estate in Canada should be cognizant of the costs involved in buying a property. Listed below are some of the costs that the buyer has to incur:
o Mortgage insurance and loan application fees
o Appraisal fees
o 5% deposit that is typically paid when an offer to purchase is accepted
o Down payment of around 25% less the 5% deposit
o Home inspection fee
o Land and deed registration fees
o Prepaid property tax refund
o Home insurance
o Survey costs
o Legal fees
o Title insurance
The last and final step in the process is closing of the escrow. On this day, the transaction is completed and ownership transferred to the buyer. The buyer can now have the title deed registered in their name.
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