Purchasing a house is a significant milestone, but what should you know before buying a house? This blog post will consider key considerations for prospective homeowners and will provide valuable insights to help buyers navigate the real estate process.
Take Care to Avoid Scams and Fraudulent Transaction
Real estate fraud is not uncommon. So, before getting serious about buying a house, it is important to understand the common types of real estate fraud in Ontario so that you can be aware of any red flags that may arise.
Hire a Realtor and Real Estate Lawyer
When making such a significant investment, it is critical to ensure that you have a team of experts guiding you through the process. Consider hiring a reputable real estate agent who is licensed in Ontario. Real estate agents can help you find properties, negotiate the purchase price and other conditions of the purchase, and guide you through the purchase process.
While a real estate lawyer traditionally becomes involved in a transaction once the Contract of Purchase and Sale is signed, it is never too early to hire a real estate lawyer for your upcoming purchase. Real estate lawyers can not only help with transferring title and making the purchase “official,” but they can also help answer any questions you might have about purchasing a property, including issues relating to rights and liabilities.
Do Your Research
Perhaps the most important thing to know before buying a house is the importance of research. While a hot real estate market can make you feel antsy to put in an offer, it is important to do your due diligence before making an offer to ensure that the property is the right fit for you and won’t come with any unexpected surprises.
Depending on the type of property you are purchasing, your “research” might include:
- arranging for a home inspector to assess the property, or making the Contract of Purchase and Sale contingent on a home inspector providing a favourable assessment of the property,
- familiarizing yourself with the neighbourhood to ensure that not only the property but that the location suits your lifestyle,
- asking a real estate lawyer to review the property title to ensure there are no issues with ownership and the seller can transfer the property to you, or
- reviewing relevant strata or condo documentation and noting any significant events or issues, such as an upcoming special levy for repairs.
Additional work can feel overwhelming, especially amid excitement over the prospect of purchasing a property. However, it is essential to conduct your own due diligence to ensure you have the right information to decide whether the property is right for you.
Consider Your Finances
Talking about finances can be tough, but you will need to discuss financial considerations before purchasing a house. A first step as a prospective buyer is to speak with your bank or a mortgage broker to confirm you will have adequate funding to purchase the property and consider whether the mortgage payments and associated costs align with your budget.
It is important to remember that mortgage payments are only one cost associated with purchasing a property. In addition to mortgage payments, you may need to think about additional water and heating costs, strata fees, annual property taxes, and setting money aside for renovations or unexpected home repairs.
Another financial consideration that is often overlooked is the true cost of purchasing a home. In addition to fees charged by your realtor and real estate lawyer, you will likely be charged land transfer taxes, a Municipal Land Transfer Tax (if you are purchasing in Ontario), and Harmonized Sales Tax.
To learn more about the taxes you can expect to pay on a new house, read our previous blog post that speaks to real estate taxes in Ontario.
How Will You Take Title?
Depending on your circumstances, you may be purchasing a property as the sole owner or purchasing with another person (such as your spouse) as joint tenants. In recent years, we have also seen many situations where children purchase properties with their parents. In any of these cases, the type of ownership you choose can have different impacts on matters ranging from financing to estate planning, so it is critical to speak with a real estate lawyer to determine which ownership option makes the most sense in your situation.
Thoroughly Review Your Contract of Purchase and Sale
From a lawyer’s perspective, signing a Contract of Purchase and Sale is a crucial event in the home-buying journey. When you sign a Contract of Purchase and Sale, you enter into a legal agreement to purchase a property, subject to conditions in some cases. At this stage, it is essential to understand the terms of the contract and how they may impact your rights and obligations.
Typically, a real estate agent will help you draft the Contract of Purchase and Sale and negotiate with the seller on any additional considerations. If you or your real estate agent are unsure about particular terms and how they may impact your legal obligations, do not hesitate to seek out a real estate lawyer. They can help you understand how any terms in the Contract of Purchase and Sale might impact you and whether any essential terms are missing from the contract based on your circumstances.
Obtain Home Insurance and Title Insurance
A critical element of homeownership is obtaining insurance to protect your investment. You will invariably need to obtain home insurance, and, in addition, homeowners must also consider title insurance. This essential insurance protects you from potential title defects or unforeseen claims against your property. Be sure to speak with an insurance provider before taking possession of the property to discuss your needs and find the right insurance for your circumstances.
Contact the Residential Real Estate Lawyers at Campbells LLP in Oakville for Assistance With Your Next Home Purchase
Whether you are buying your first home, purchasing a cottage, or are looking to downsize, the seasoned real estate lawyers at Campbells LLP will guide you through each step of your real estate transaction. Our lawyers will review all relevant paperwork and explain how certain terms will impact you and your new property. If a dispute arises, we will explain your options and work quickly to defend your interests.
We provide a variety of legal services related to buying and selling property and can assist you with all of your real estate law needs. If you have questions about your upcoming home purchase, contact us online or call us at 905-828-2247 to schedule a consultation with a member of our team.