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Realty - Purchase - What to Do


Disclaimer

The following is no substitute for advice provided by a lawyer specifically for you. It is intended only to help you understand that advice. No responsibility is taken for any problems arising except due to paid legal advice.

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Choose a property

There is no legal advice for this. It just depends on your needs. Use a realtor. It is free to the purchaser. However, they will only show you listed properties, so keep your own eyes open.

Check it out

Check out its construction. Perhaps hire or persuade an appraiser or contractor to inspect it. If you are contracting to have it constructed, have us review the agreement, and refer to our construction law page.

Perform searches to check for legal problems. See our site for retaining our services for a mortgage or purchase. It lists some of the available checks. Performing these searches once the agreement is made, offers you damage control only. It is better to do it before you offer. It is even better to make the vendor do it and provide satisfactory results, as part of the agreement. You may retain us to do so.

Take a video of its condition. This will help ensure that no fixtures disappear.

Obtain the disclosure statement the vendor will have provided to the realtor.

Make an Offer

If you have not already done so, refer to our page on real estate purchase and sales.

You want a low price, of course.

You want a possession date convenient to yourself. Your costs will begin on the adjustment date, which is usually the same date as the possession date, so make sure you need the house for that date.

You want a low interest rate and a low deposit too.

You want warranties of the condition of the property. The realtor's form includes a warranty that there is no urea formaldaehyde insulation and that it be delivered in the condition it was in at the time of inspection. We also suggest the following.

That the property conform to the disclosure statement provided to the realtor.

That a surveyor's certificate (Real Property Report) satisfactory to your mortgagee is delivered. The common clause, "existing surveyor's certificate" does you little good.

That a Zoning Memorandum (Siting Certificate) satisfactory to your mortgagee is delivered.

That a clear Sask Energy Certificate is delivered.

That there are no work orders outstanding against the property.

As above, check out our site for retaining our services for a mortgage or purchase. It lists some of the available checks.

Ensure any items which are not fixtures, and which you want, are included.

Ensure that you make any absolutely essential requirements a condition of the sale. For instance, you will want to make it a condition that you obtain satisfactory financing.

Arrange Financing

Shop around. See our list of online banks.

The interest rate will make a huge difference in the total amount you must pay. However, you must consider the future, since you will have to renegotiate the interest when the term expires.

Pre-payment privileges are important too. Since you can't deduct the interest paid on a residential mortgage, it should be one of your first priorities to pay off. Further, restrictions on repayment can make it more expensive to re-sell your property. Normally there is a penalty amounting to three months of interest. However, sometimes there is an interest differential penalty, which makes pre-payment almost always uneconomical.

Central Mortgage and Housing Corporation offers mortgage insurance to the banks. If the bank insures the mortgage they will finance up to 95% of the value of the property. However, the mortgage premium is charged to you, and it is presently (Nov. 96) 2% of the mortgage. It is added onto the mortgage however, so you won't be out of pocket for the cash until the end of your mortgage, when you would otherwise be paid off. If you can arrange sufficient funds to pay more of the price yourself, you might be able to avoid this heavy premium.

The bank may also offer life or disability insurance. Sometimes it is a good deal.

Hire a Lawyer

Well, hire us, by phone, in person, or via our retainer page.

If you are financing with a mortgage, your bank will usually insist that you pay their legal fees. However, a good bank allows you to choose their lawyer. Then, the lawyer typically acts for both you and the mortgagee. This is a desirable thing, in our view, but you must be aware of the drawbacks. In our view, the convenience and savings more than justify the risk, which is both unlikely and comparatively insignificant.

Occasionally the lawyer will also act for the seller too. The same risk and the same advice apply. Again, we highly recommend it. It saves about $25.00 in costs, and we reduce our fees by 10% to each side.

If you have obtained a quotation on the fees, bring it to our attention to ensure it is not missed.

The bank will have certain requirements to ensure their security meets their needs. In many cases, their instructions will overlap with the purchaser's. For instance, both would insist on a title search. In some cases, one may want something done which the other does not require. If so, it would be done.

If we do not guarantee anything except the transfer of title, and do not handle the payment, then we don't consider that 'conveyancing' and the fees are considerably cheaper.

Get the Necessary Documents to the Lawyer

Tell the mortgagee to send the mortgage instructions to us.

Arrange fire insurance. Your bank will usually require that it cover 'fire and extended' risks, and be in the amount of the greater of the mortgage value or replacement cost. Your bank will require that it be 'first loss payable' to the bank. In other words, if the property is damaged, the proceeds go to the bank. They can use it to pay down your mortgage or release it to you. In practice, the banks simply consent to its release on most minor claims. You should buy this immediately, but of course, it should not take effect until the adjustment date. Tell the insurer to send us the insurance certificate, but if that will take more than a few days, to also fax us a confirmation in the meantime.

Tell the realtor to send the Agreement to us.

Sign the Documents and come up with the money.

We will prepare the mortgage, and calculate the money necessary to complete the transaction. Before we will use the transfer which we get from the vendor's lawyer, we must be protected for that amount. You can simply pay it to us and we will put it in a special trust account. We will also accept unconditional written promises to pay from lawyers or bankers.

Make Moving and other Physical Arrangements

You must arrange the utility services yourself. Don't forget Sask Tel, Sask Power, Sask Energy, Cable, and Water. If you discover, after possession, that there is a claim against you for utilities the vendor used, you must tell us immediately.

You should send changes of addresses to anyone with whom you deal.

Prepare and follow a moving checklist.

Enjoy your new home.

We will send you a full report once the transaction is complete, together with any money we obtained from you but did not use.

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