So you have decided to Buy a home. From a financial point of view its probably the single biggest decision you will make in your lifetime. If you are a first time Buyer likely the first question you will have is “Where do I start?” and, after, “How does a Notary Public fit in?” This page will guide you through the process of buying Real Estate step by step. Below are links directly to each topic or feel free to read it from start to finish! If you have any questions about any part of the process please feel free to contact one of our Notaries directly at (250) 388-5905 or by e-mail: James Farley, Notary Public or Kristy Martin, Notary Public
The first thing to do is have a conversation with yourself and/or your family and try to determine what are the basic requirements you want in your new home. For example what are the minimum number of bedrooms you want, is a garage needed, etc.
Once you have had that conversation you have a choice to make. You can either decided to look for a home alone, without guidance, or you can select a Realtor to help you. With any chore, job or task the advantage of having the assistance of someone with experience is that it takes less effort (you do not have to reinvent the wheel), the process is more efficient (it takes less time) and the outcome or result is much better (you have a much better chance of getting what you want at the price you want to pay). Always remember that your Realtor is not paid by you but by the Seller and only if you are happy, that is when you buy. Most Buyers select a Realtor, a choice we at Farley Martin Notaries recommend.
If you do not know a Realtor or are unsure how to find one to work with just ask us we will be happy to match you with one of our trusted real estate professionals.
Once you have selected a Realtor and before you start looking at houses another question needs to be answered; How much can you afford to pay for your new home? The money required to purchase a home is usually much more then most people have saved. Therefore in most cases the price is paid in 2 parts - the cash that you have on hand plus the additional money that you borrow. Without knowing how much you can borrow you can not know how much you can pay for a home and without knowing that looking for a new home will be like trying to see in the dark- you can try but it’s a waste of time.
Borrowing for a home is done by way of a mortgage. A mortgage is simply a loan which is secured against property. In order to find out how big a mortgage you can get and therefore what price range you can afford to buy in you have to be qualified. Qualification is the process by which the mortgage company determines how much it is willing to lend you. There are many different types of mortgages, mortgage rates, payment plans and terms. How do you sort through it all? First you may already have a relationship with a Bank, Credit Union or Mortgage Broker. If so simply give them a call and they will lead you through the Qualification process. Your Realtor will generally ask at your first meeting if you have been qualified and by who. If you do not know where to start in finding a Mortgage Broker, Bank or Credit Union simply let us know and we can also put you in contact with one of our Trusted Mortgage Professionals.
Now you are ready to start looking for you new home with your Realtor. Your Realtor will use his or her knowledge of the market and match your needs as close as possible to those homes currently for sale in your price range. Once a suitable home has been found your Realtor will prepare a written offer for the property and negotiate the terms of the sale with Seller for you.
Most real estate offers are written with ‘subject to” conditions. These conditions are clauses in your offer which describe events or things that have to be happen or have to be done before you are legally committed to buy your new home. Some of the more common subject to conditions are: subject to financing, subject to a building inspection, subject to the Buyer’s Notary’s approval of the contract, subject to a review of the property’s legal title and subject to confirmation of the property’s ability to be insured.
“Subject To” Financing:
To this point in the process you have already been qualified by your lender so why would you still make your offer subject to financing? The reason is because of the nature of the mortgage. The mortgage is a loan to you so you have to personally qualify, but it is also secured by the property therefore the property must likewise qualify. The lender does this by way of an appraisal of the property’s market value. This is important to keep in mind because the maximum amount of your mortgage is always a percentage of which ever of the two values is lower - the purchase price or the appraised market value. So even if you were qualified personally by your lender for a million dollar mortgage if the market value of your home only supported a mortgage value of half a million dollars, that is all your lender could lend you.
“Subject To” Building Inspection:
Subject to a building inspection is straight forward. This provides you, the Buyer, the opportunity to have your new home’s condition inspected and any problems brought to your attention before you purchase it. Based upon the inspector’s report you can either confidently move forward with the purchase or negotiate with the Seller to have any problems dealt with before you buy or if the report is unsatisfactory and no resolution can be found you can move on to another home.
“Subject To” Review of the Contract by the Buyer’s Notary:
Subject to review of the contact by the Buyer’s Notary is just one of the areas where we can help. The old saying “that two sets of eyes is better then one” pretty must sums up the reason for this subject to. One of the most important jobs a Realtor performs and one for which they are trained is that of preparing a legally binding Contract Of Purchase and Sale. When asked or required we at Farley Martin Notaries, in concert with you and your Realtor, will review in detail your contact with an eye to ensuring that there are no issues which need to be addressed, that any questions you have about the contract get answered all to insure that you are getting what you bargained for and that your interests are properly represented and protected before you become legally obligated to buy your new home. Remember our only mandate at Farley Martin Notaries is to represent you and only you!
“Subject To” Review of the Properties Legal Title:
All privately held land in British Columbia has a title with its own unique description (ie. Parcel Identifier Number, Lot Number... Plan Number). The word title itself cangues up an image of some old, dusty document, with various official seals on it, sitting on a shelf in a government office. In British Columbia this is not quite the case. In the Land Title Office titles are not in paper form but are electronic. This means that with proper computer access any one can get a copy of any title delivered via the their web browser.
All titles start by identifying the registered owner(s) and then list all those items which are currently legally registered on the property. These items can be divided into two basic categories: financial items such as mortgage, liens, judgements, etc., and non-financial items such as easements, rights-of ways, covenants, building schemes, etc. Financial items for the most part do not present a problem as standard contracts of Purchase and Sale prepared by Realtors have a provision that the Seller is responsible for paying and removing from title all financial items. With non-financial items however the standard is that the Buyer accepts them being on the title and will buy the property with them in place. A lot of the time these non financial items are written with confusing legal jargon, which makes them difficult to understand. Furthermore, the majority of them, to one extent or another, limit (some times severely) the Buyers use and enjoyment of a property. Consequently, it is always important that these items be identified, reviewed and throughly discussed with any Buyer prior to him or her becoming legally committed to purchase a property. This is the why the subject to title review clause is so important. This is another area that we at Farley Martin Notaries can assist you – we can review what is found on title and discuss it with you, the buyer to ensure you are fully informed of what is registered on title and what it means to your enjoyment and right of use of the property.
“Subject To” Confirmation of Insurance:
The subject to confirmation of insurance clause is inserted to give the Buyer the opportunity to check with an insurance company to make certain that a insurance policy can be obtained for the property. Most properties are insurable, however situations arise where there are problems. If there is a problem and the property can not be insured then the result in almost all cases is that the mortgage company will not lend any money. So like the the previously discussed issues insurability should be dealt with prior to Buyer becoming legally obligated to purchase a property. At Farley Martin Notaries our advice to Buyers is to always include this clause in your contracts because “its always better to be safe then sorry."
The time has now arrived the Buyer to take the next step. All of the Buyer’s “subject to” conditions have been satisfied. Your Realtor will now prepare a document for the Buyer which will formally remove all the conditions so that the purchase can proceed straight to completion. The Buyer has now has become legally comitted to purchase the property. All the Buyer need do at this point, if has not been done already, is to inform the mortgage lender and the Realtor that we are the notaries who will be acting for him. From here on out we take care of everthing.
About ten days to a week before the completion of the purchase we contact the Buyer to obtain the basic information required to complete the transfer and mortgage documents and set an appointmnet to meet so that the documents can be reviewed and signed. To expediate this process feel free to use our secure online information submission form. Our office then sets about contacting various goverment and non-government offices to confirms and to gather all the additional information required to complete the purchase including any adjustment required for property transfer tax, municipal property taxes, water accounts, municipal utiltiy accounts (if required), etc. At the appointment with one of our Notaries all the documents with respect to the purchase of the property including the purchase monies, closing costs and adjustmenst are reviewed in detail. Any last minute questions the Buyer may have are answered, and the remaing steps in the purchase process are detailed and gone over.
One day prior to the purchase the Buyer deposits with our office by certified cheque or bank draft the balance of the purchase price plus closing costs. On the next day, the completion date, first we arrange for the deposit of the Buyer’s mortgage funds with the mortgage lender, register the transfer of the property into the Buyer’s name, register the Buyer’s mortgage, insure arrangements are in place to payout any existing financial items on the property and pay the Seller for the property.
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