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Buyer Frequently Asked Questions

Buyer Frequently Asked Questions

Why should I use a REALTOR® to help find and purchase a home?

Buying a home can be an emotional and complex undertaking. It's a step-by-step procedure that will create many questions, and involves a lot more than just "looking" for a property. A professional REALTOR® on your side at the outset will help prepare you for your future winning offer, and will alleviate a lot of stress, which helps create a smooth and easy transaction. He or she will be able to orchestrate the entire process for you and bring in other professionals you will need along the way. The REALTOR® also has the use of their local MLS® System which allows him/her to access all the properties listed for sale with all the other brokerages. By keying in your wants and needs into the system the REALTOR® can find homes that meet your specifications within minutes. That's a lot easier than looking through endless ads, calling on "for sale" signs, and looking at outdated properties on the Internet. It's important to note as well that there is rarely a cost to a buyer for using the REALTOR's® services. Please visit our REALTOR's® Role page to read more.

Why should I choose "Lil Wilkinson Realty" to help purchase my home?

The best way to answer this question is to visit our "Buyer Benefits" page.

Why should I sign a buyer agency agreement?

A buyer should always know when a REALTOR® is working on their behalf and should stipulate that relationship by signing an agreement with that REALTOR®. A REALTOR® can then treat you like a client rather than just a customer. The REALTOR® can answer your questions, give you advice, inform you about the buying process, show you property, draft the offer tailored to your needs, protect your bargaining interest, negotiate on your behalf, and will not disclose any confidential information to other parties in the transaction. Signing an agency agreement is also a show of "good faith" between the REALTOR® and the buyer. The REALTOR® is investing their time and effort, and working on your behalf to help you purchase a property, and you are interacting solely with that REALTOR® for the term of the relationship, or until you make your purchase. Both parties will then know where they stand with each other. To read more please visit our agency page.

Why should I get pre-approved for a mortgage before I begin my search for a property?

Sometimes you may think you can afford something that may be out of reach, or conversely you can afford more than what you're looking at. By knowing your mortgage situation you are able to look at properties that meet your criteria financially. You will also be able to lock in an interest rate for a given period of time. If you delay in getting approved then interest rates may go up and that could affect how much you can afford. Getting pre-approved for a mortgage also helps the REALTOR® significantly when they are searching for properties to show you. It also helps the offer presentation. When a seller has confidence that you are able to meet your financing condition in the offer then he is able to make easier decisions about his property and its sale. You will also be confident that you can afford the home.

How do I know that I'm paying fair market value for my purchase?

A good REALTOR®, after discussing your wants and needs, will show you homes that suit your interests and your pocketbook. After seeing a number of homes you will be able to assess for yourself what you like and dislike, and also what is the better deal for the money. Once you decide on a home, the REALTOR® can do a "reverse analysis" through the data on the MLS® System to see what comparable properties have recently sold for in the marketplace. This may give you a more precise idea of what to offer the seller.

Do properties under "Power of Sale" necessarily sell for a bargain price?

No, they do not. The lending institution that holds the mortgage to the property must make every concerted effort to get the highest and best price for the home based on the market conditions at the time. They must try to get enough money to pay the mortgage off. Anything over that amount will be given to the past owner of the home. Anything under that amount the bank may likely sue the past owner for, if possible. Lending institutions also do not warrant anything in the home and do not even guarantee a deed on closing. It may also be your responsibility to pay any outstanding liens on the home, if any. That may be the only way to obtain clear title.

What other professional advice or services do I require?

The number of extra services you require will depend on the nature of your property. You will need a lawyer to close your deal regardless of the home you choose. If you're placing a mortgage on the home then you will need the help of a lending institution, and you will need an insurance broker to protect your investment from fire, flood, and theft. You may also wish to have a home inspection, a building contractor for any renovations you'd like, someone to check the well and septic, if applicable, an interior decorator, or a survey done, etc. The list may be lengthy depending on your situation.

What is Land Transfer Tax and how much does it cost?

Land Transfer Tax is a government tax that is applied when a property transfers from one owner to another. The fee is based on the amount the property sells for. The higher the amount then the higher the tax. You will pay $5.00 per thousand dollars for the first $55,000 and then $10.00 per thousand for the difference up to $250,000. It then increases to $15.00 to $400,000, and then it's $20.00 per thousand afterwards.

For example: If you purchase a property for $430,000 then you will pay the following.

$5.00 x 55 ($55,000) = $275.00
$10.00 x 195 ($195,000 is the difference to $250,000) = $1950.00
$15.00 x 150 ($150,000 is the difference to $400,000) = $2250.00
$20.00 x 30 ($30,000 is the difference to $430,000) = $600.00
The total is $275.00 + $1950.00 + $2250.00 + $600.00 = $5075.00

What are disbursements and how much do they cost?

Disbursements are the property checks or requisitions that your lawyer will do on your behalf, but that you will pay for. These checks are required to obtain clear title to your next home and are not something that you can waive or do without. These checks include, but are not limited to; conformity to zoning by-laws, utility checks, sheriff reports, city reports, etc. Disbursements run from $600 - $800.

When is HST (Harmonized Sales Tax) applicable on my purchase?

You should always look at HST as being payable by you unless you're exempt from it. There is currently no HST payable on resale homes. There may be HST payable on vacant land, farms, commercial properties, etc. You should consult your lawyer as to how much this would be and the rebate you may be entitled to depending on your situation. New homes are currently subject to HST, meaning you would pay the tax over and above the purchase price. Some builders include the HST into their asking price. Make sure you verify this during negotiations.


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