R. The following are examples of additional costs that will be incurred during the purchase of a standard single family residence:

R. The first step you should be taking, before even looking at any homes, is to talk to your mortgage lender. We always recommend dealing with a mortgage broker or bank representative who deals ONLY with mortgages. They do more deals per year, and are better equipped to handle difficult financing issues than a branch representative who only does a handful of transactions each year. In addition, they are available around the clock in case we need to reach them while dealing with an offer, as opposed to branch representatives, who only work during branch hours. Imagine losing an offer on a house on a Sunday evening because you couldn’t get hold of your mortgage representative! It is important that once you’ve met with your lender that you get a letter of mortgage pre-approval. It is usually prepared by the lender after they have performed a credit check, and outlines the amount of mortgage that the lender is prepared to lend you for the purchase of your new home!

A. If you're prequalified it means that you POTENTIALLY could get a loan for the amount stated to you, assuming that all of the information given was accurate and true. If you're preapproved, it means that you have undergone the extensive financial background check - which includes looking at your credit history, previous tax returns and verifying your employment - and the lender is willing to give you a loan. You're APPROVED! So, they give you a letter that states such and it is valid for a approximately 60 days thereafter.

Notwithstanding the above, you will have an accurate figure which shows the maximum amount that you are approved for. Most vendors prefer buyers that have been preapproved because they know that there will not be any problems with the purchase of their home.

Q. What kind of conditions should I put in my offer to purchase?

R. The most standard conditions normally seen in an offer to purchase are those allowing for mortgage financing, home inspections, and Seller’s Property Condition Statements. We always recommend that purchasers get a home inspection and a Seller’s Property Condition Statement. A home inspection by a qualified home inspector can help identify potential issues and save a buyer potential headaches in the future. A Seller’s Property Condition Statements asks detailed questions of the vendor regarding their experiences in the house, for example, whether or not they are aware of any structural defects not readily available, or whether they have had water in the basement.

Q. How do I find a reliable, qualified home inspector?

R. Because there are no licensing, minimal education or insurance requirements to be in the home inspection business, it is important that you choose carefully. The inspection company you select should stand behind their inspector’s work, and guarantee that the inspector was properly trained and that a thorough inspection was performed. You should ask that the company guarantees their inspection reports, and whether the company provides a complimentary guarantee with each inspection report. Also ask the company what protection it offers against deficiencies found after purchase. In addition, you should ask what kind of training the company’s inspectors receive, whether or not they are required to complete on-going training, and whether they are members of the Canadian Association of Home and Property Inspectors (CAHPI). Members of CAHPI are required to attend regular training sessions and seminars, and are required to pass exams prior to achieving full member status. Additional questions to ask the inspection company are:

R. Deposits usually accompany an offer to purchase in the form of a cheque (personal or certified), or money order. Once an offer to purchase is accepted, the cheque (or money order) must be deposited into the listing broker’s trust account by the end of the next business day. This cheque is cashed, held in the trust account, and then forwarded to your attorney, where it forms part of your down payment. If any conditions made in the offer to purchase fail (for example, a home inspection), your deposit amount will be refunded. However, once all conditions are satisfied, the deposit becomes non-refundable. Deposits are viewed by the vendor as “good faith” money, meaning it is unlikely that a buyer with a sizeable down payment is likely to walk away from a transaction. It is not a requirement of an offer to purchase to include a deposit, however it is standard practice, and most vendors will ask for one to accompany the offer. An amount of between $3,000 and $5,000 is normally adequate, however vendors will normally view a larger deposit as more favourable.