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Buying a Home

Q- What should I look for when buying a home?

Prepare a needs list by deciding what it is you are looking for in a home in terms of size, bedrooms, location, type of neighborhood etc. Find out from your real estate agent if there are any developments planned for the neighbourhood that might affect your decision to buy. Then try to settle on a price range that you can afford. You will need a down payment usually around 5% of the house price. Do not forget to take into account other costs involved such as home inspection, deed transfer tax, other closing costs and your lawyer’s fees. Your lawyer will explain these costs to you in advance.

Q- Are there things to consider if I am buying in a rural area?

When purchasing a rural home you should ensure that the drinking water is tested. You should consider having both the quality and quantity of water tested. Most rural homes will be on a well so it is important that you ensure the water is safe to drink before purchasing. Most rural homes are on a septic system, and you will want to have someone inspect this to ensure it is in working order. Also consider how far you have to travel to services such as hospital, schools, work, shopping etc.

Q- Are there things to consider if I, buying a newly built home?

New homes may have fewer maintenance concerns, but there will be different kinds of questions you will want answered. Is it protected by a new home warranty? Have all the required permits been issued? Can copies be provided for your review?

Q- Are there things I should consider if I’m buying a condominium?

You should find out what the monthly condominium fee is and what it covers. Are there plans to increase the fee? Have there been any maintenance or repair problems? How much is in the reserve fund to cover future maintenance and repairs? Are most units owner occupied or rented? Can you hear the occupants of the unit overhead or next door?

Q- Who is involved in the process of buying a home?

When purchasing a home, you will require the services of a lawyer, a real estate agent, and most likely financial assistance from a mortgage lender. You may also need the services of other professionals such as building inspectors, land surveyors.

Q- What is the role of a lawyer?

A lawyer will inform you of your legal rights and obligations when you are buying your home. You should have your lawyer review your offer to purchase. Your lawyer should explain the conditions that have to be met before you are legally obligated to buy, and the general terms of the legal contract you have entered into. He or she will also ensure that you understand any ownership interests’, limitations of your new home such as restrictions on use of the property or rights of way over the property. Your lawyer will also review documents, ensure that you and the seller sign the documents, ensure that he or she has sufficient funds to complete the closing of the sale, make sure the appropriate searches are done and that any liens or mortgages are paid off on closing, and, following closing, file documents to register your mortgage and you as the new owner of the property.

Q- What is the role of the real estate agent?

A real estate agent provides advice on the type of property which will best suit your needs including balancing your wish list with any budgeting limitations. He or she will prepare the offer to purchase, as well as negotiate on your behalf with the seller’s agent. When purchasing a home, the real estate agent has obligations to the seller, so ensure you ask your agent to explain fully the extent that this obligation may limit their duties to you as a buyer.

Q- What is the role of the lender/financial institution lending you the mortgage?

Your financial institution/lender’s main role is to provide you with a mortgage to enable you to purchase your home. There are many different mortgage plans with varying interest rates. The financial institution should work with you to decide what kind of mortgage best suits your financial situation and your needs. Some buyers use a mortgage broker to find the best mortgage to suit their needs. A financial institution may give you a pre-approved mortgage enabling you to know for sure what you can afford, so that you can avoid getting your heart set on a home that you may not be able to afford. Don’t hesitate to ask any questions you feel will help you decide what kind of mortgage best suits your needs.

Q- What should I look for when choosing a lawyer, real estate agent, or financial institution?

Take the time to understand what the services will consist of. You can ask family, friends or people you work with who they would recommend. Lawyers may have varying rates. You do not necessarily need to chose the first lawyer or real estate agent you approach to represent you, explore your options. Ask whether their practice is for the lawyer to meet with the client for a closing appointment. You should talk with different financial institutions and have them explain the different mortgage options available to you based on what you can afford. They will explain such things as fixed rates, variable rates, and help you determine the best mortgage repayment options. You can also use a mortgage broker to shop around for you.

Q- Can I use the same real estate agent, or lawyer as the seller?

Yes - but is recommended you hire a lawyer or real estate agent that is not representing the seller. This is to ensure that they will solely serve your interests in the home buying process.

Q- What costs are involved in purchasing a home?

Before making an offer to purchase a house, you should ensure that you understand and can afford all the costs of buying the home as well as the purchase price. Here is a list of the usual fees involved when you buy a home. You will want to find out what each is likely to cost so that you can keep to your budget as far as possible. The costs may include:

  • A down-payment
  • Inspection fees (home inspection and sometimes inspection by an electrician, roofer or other tradesperson)
  • Moving costs
  • The cost of connecting utilities
  • Closing costs: - legal fees - land transfer tax - municipal/ school/ other property tax and fuel adjustments - survey fees, document registration fees
  • Renovations or repairs that are required immediately.

Don’t forget to budget for insurance on the building and contents from the closing date. Usually, you don’t pay your real estate agent as he or she takes a share of the fee paid by the seller to his or her agent.

Q- What should I include in my offer to purchase?

In your offer to purchase you should include:

  • any chattels such as a stove, fridge, dishwasher that are to remain with the house when you buy it should be specifically listed in the offer to purchase. Personal furniture items such as curtains, sofas, chairs, paintings etc. are rarely included.  If the seller has agreed to include curtains etc. these should also be listed in your offer to purchase.
  • any conditions such as the seller having to vacate by a certain time on the closing date, or that the offer is subject to you having it reviewed by your lawyer
  • any repairs that the seller needs to complete by a certain date
  • whether the offer is conditional on you securing satisfactory financing by a certain date, a home insprection, and/ or the sale of you current home. Your real estate agent and lawyer will help you when you draft your offer to purchase to ensure any concerns you have are properly addressed. If your offer is accepted, you will be expected to make a downpayment to the seller’s agent who will hold it until the sale proceeds.

Q- What happens if the seller doesn’t accept my offer?

If the seller doesn’t agree with the price you offer or with any of the conditions in the offer, he or she can make a counter offer. You then have to decide whether to accept it. You may also be able to make a further counter-offer. If you and the seller cannot reach an agreement then negotiation is at an end and you should look for another property.

Q- What if I or the seller does not satisfy the conditions in the agreement of purchase?

The agreement of purchase is a contract, and therefore it follows the general rules of contract if the terms are not carried out by either party. At any point if one party cannot satisfy a condition of the contract the other party may withdraw from it provided the contract allows the withdrawal for that breach. For example, if you decide not to complete the purchase because you find another house you like better, you might forfeit the down payment (deposit).There will be certain time frames in the offer for conditions to be satisfied. For example, you might have a certain time to get mortgage financing in place, if you can’t get a mortgage then you may be able to withdraw from the agreement without paying a penalty. You should tell your lawyer or agent if you cannot meet a condition within the time frame provided.

Q- What is a property condition disclosure statement?

A Property Condition Disclosure Statement is a report that is provided by the seller. It discloses information about the existing condition of the property that is known to the seller. This statement will help the purchaser decide whether further inspections are needed. Review it carefully, and ensure you have all your questions answered to your satisfaction. For example, if the Property Condition Disclosure Statement says that the roof was last replaced 10 years ago, or there was water in the basement last spring, you may want to have the roof inspected to see if it needs repair or replacement and the basement inspected for current and possible future damage.

Q- Does the seller have to tell me about problems such as a flooding basement?

The seller is legally required to disclose what they know about the condition of the property. Specific questions about water leakage should be included in the property disclosure statement. A building inspector can also assess whether there is any evidence of past or present water problems. Again ask questions of your inspector and ensure any information you need is provided to your satisfaction.

Q- Should I have a building inspector inspect the home?

Yes. Purchasing a home is a large investment. You will want to ensure as far as possible that what you are about to purchase will not have any unexpected problems down the road. Hiring a building inspector will help identify any past or already existing problems with the house that may not have been apparent to you when you viewed the property. While it may cost money to have a building inspector look over the house you wish to purchase, the potential cost of not having a building inspected could be far greater.

The home inspector cannot identify every potential problem; however, if you are unsure of a particular aspect of the house such as wiring, structure, the roof etc. you can hire a specific tradesman such as an electrician, roofing specialist etc. to further investigate the part of the house in question. There is usually a time frame set out in your contract for this work to be done. Ensure you are aware of the time frames you have to meet. If the home inspection finds significant or costly problems there may be an opportunity to withdraw from the purchase or to ask the seller to fix or pay all or part of the cost of fixing the problems. Talk to your lawyer and real estate agent if you are concerned about the results of the inspection.

Q- What are restrictive covenants?

Restrictive covenants are conditions that come with the property you are purchasing. They may include such restrictions as size of building on land, prohibition against establishing a business on the property, and many others. Your lawyer will inform you of these covenants upon a review of the state of the title. The restrictive covenants are in place to protect the value of your property as well as the value of homes in your neighborhood. It is important to be aware of them when buying or when selling your home in the future.

Q- Will my spouse be included in the deed to the home?

You should discuss with your lawyer whether you and your spouse should jointly own the property and the options of how you take title to your new home. For example, as a sole owner, joint tenant or tenant in common. If your mortage lender is relying on both your spouse’s and your income to support a mortgage application, then it will require both names on the deed.

Q- When should I insure the property and its contents?

You should make sure that you have insurance coverage on the property from 12:01am on the day of closing. Your lawyer will require proof that insurance has been arranged in the form of a “binder letter” from the insurance company. It can be faxed to your lawyer before the closing date.

Q- What is title insurance?

Title insurance is specialized insurance that you should discuss with your lawyer. It provides protection against a number of events. It you choose to have title insurance it is a one time closing expense.

Q- What happens on the closing date?

The closing date is the day that you purchase your property in full and receive possession. Your lawyer will have prepared a closing statement showing all the money due to complete the purchase. You should ensure that you provided your lawyer with a certified cheque or bank draft payable to your lawyer “in trust” for the balance due from you. Your lawyer will also arrange to receive the mortgage funds from your lender. On the closing date your lawyer transfers the appropriate funds to the seller’s lawyer. Your lawyer will ensure other closing costs such as deed transfer tax, legal fees, title search, and location certificate are taken care of. Your lawyer will register your deed and mortgage with the Land Registry Office and forward to you the original deed to the house once he or she receives it from the Registry Office.

Q- When can I move in?

Your purchase agreement may set out the exact time on the closing date that you are able to move in. However this will depend on whether your lawyer has received all the funds necessary to complete the purchase, from both you and the lender. You will complete a final inspection of the property and if this is satisfactory, and your money has been paid, your lawyer will arrange for you to have the keys to your new home.

Q- What is a Parcel Register?

The new Nova Scotia Land Registration system requires the seller to register all the title information in the “parcel register” at the government land records office. Every parcel register has a number (Property Identification Description or PID) and this number remains the same through all transfers of ownership. Your lawyer will review the details of your parcel register with you before the purchase.

Q- Is the property migrated

All properties that are to be transferred to new owners must be registered or migrated into the new Land Registration system. If the seller has not already done this, it will be set out in the contract that he or she will do it before the transfer is completed. For more information on the new Land Registration Act you can visit the website of the Land Registration Office of Nova Scotia.

Q- What is a location certificate?

A location certificate is a survey conducted by a Nova Scotia Land surveyor. It ensures that the building the seller is selling to you is within the boundaries of the lot. It ensures the property as you viewed it, is within the boundraries of what the owner has to sell.. The company giving you a mortgage will require you to get a Location Certificate to ensure the money it is loaning you is secure. Your lawyer will make the necessary arrangements to have a land surveyor carry out the survey

Q- Am I required to register my new home under the new Land Registration Act?

If the home you are purchasing is not yet registered according to the Land Registration Act, then it must be done before the home can be purchased. The registration process is sometimes called conversion or migration to the new land registration system. There is a fee for registration. It is up to the purchaser and the seller to negotiate who covers the costs involved. The practice has developed that the seller usually pays the cost of registration.Your lawyer will tell you if the property your are purchasing has been registered. Once a property is registered under the new registration system it will not need to be registered again. For more information on registering property and the new Land Registration Act you can visit the website of the Land Registration Office of Nova Scotia.

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