Road to home ownership: Professionals to consult when buying a home
The process of buying a home can often start with more questions than answers for those who are new to Canada. In this three-part series, we share tips to help newcomers make the leap to home ownership in Canada. In the first post, we shared tips to build a credit history in Canada, and in the second, we shared questions to ask to help you decide how much to spend on a house.
In this post, the last of the three-part series, we’ll help you learn more about the professionals you will engage with on your road to homeownership.
Real estate agents
When you start shopping for a home, one of the first professionals you will encounter is a real estate agent. Real estate agents are licensed professionals who help their clients make informed decisions when buying or selling a home. They serve as an intermediary between the parties in a real estate transaction and are typically paid a portion of the final sale price as their fee. While in some cases the agent can be the same person for both the buyer and the seller, it’s generally a good idea to have your own agent as you enter into an agreement to buy a house.
Home inspectors perform a visual inspection of the major systems of a home like the roof and eavestroughs, heating and cooling, plumbing and electrical. In many cases, especially in fast-moving real estate markets, some buyers forego an inspection condition on their home purchase. Because an inspection is visual only, there could be non-visible issues with the house that are not detected on inspection. However, if you can include an inspection, the time and money spent on it might help save money later.
Home appraisers are professionals who assess the value of a home. An appraisal includes a visual inspection of the interior and exterior of the borrower’s property. Additionally, the appraiser will consider market conditions, and the pricing of similar properties in your area to determine its value. The borrower is responsible for paying for the appraisal of their home and this cost should be included in their costs to consider when thinking about a purchase or refinance. For your assistance, Home Trust has reliable appraiser partners in each province who will work with you and your broker to complete this step in the process.
Lawyers and Notaries
In most provinces (excluding Quebec), a real estate lawyer will act on your behalf to review the purchase agreement. It’s important have the agreement reviewed by a lawyer before an offer is submitted to ensure that everything is in order before a property’s sale is final. Your lawyer can also help arrange title insurance, ensure property taxes are up to date, assist with mortgage documents and ensure all legal and financial conditions are met.
In Quebec, a notary performs title searches, reviews the purchase documents, ensures the property tax account on the house is current, and facilitates the mortgage with the purchaser’s lender if they are taking out a mortgage to buy the property.
Mortgage brokers and lenders
Mortgage brokers help home owners identify the best mortgage solution available from the lenders they work with based on the borrower’s financial situation. They will also collect the necessary documentation for the mortgage lender’s underwriting and approval purposes. Mortgage lenders provide mortgage loans as determined by specific borrowing guidelines. They will set the terms, interest rate, and repayment schedule based on the information provided in your mortgage application.
In 2020, Home Trust sponsored a research report by Environics that found that 66% of those who are new to Canada had their mortgage with the same financial institution where they did their day-to-day banking. While that may be the path of least resistance, choosing to work with a mortgage broker may help you find a mortgage solution that better matches your long-term financial goals. Visit our post on working with a mortgage broker to learn more.
According to the same Environics research report, 81% of people who are new to Canada and planning to buy a home in the next few years felt that the process would be challenging. With this three-part Road to Home Ownership series, we hope we have addressed some of the concerns and made buying your first home in Canada easier. Be sure to become familiar with the topics in the posts in the series including how to establish a credit history in Canada and what you can afford to pay for a house.
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