Buying & Selling a Home For Canadians For Dummies

Douglas Gray, LLB, is a retired real estate lawyer and the author of 25 bestselling books. He is also a speaker and columnist. His website is homebuyer.ca. Peter Mitham has more than 20 years' experience writing about Canadian real estate for national and international publications.

• Introduction 1About This Book 1Foolish Assumptions 2Icons Used in This Book 3Where to Go from Here 3Part 1: Getting Started Buying and Selling a Home 5Chapter 1: Buying and Selling a Home: Just the Basics 7Knowing the Cast of Characters When Buying or Selling 8Recognizing who’s important when buying 8Identifying who’s essential when selling 9Preparing to Buy a Home 10Arranging financing 10Finding a home 11Making an offer 11Doing the due diligence 11Closing the deal 11Considering Some Important Questions to Ask When You’re Ready to Buy 11What is this going to cost me? 12This is the right home, but is this the right neighbourhood? 12What kind of changes can I make? 13How much should I budget for maintenance? 13What’s my exit strategy? 13Knowing What Happens When You Sell 14Deciding to sell 14Preparing the home 14Listing the home 14Negotiating the sale contract 14Closing the deal 15Answering Some Questions You May Have When Selling 15Does this home meet my needs? 15Will moving be more trouble than it’s worth? 16How much will this cost me? 16Are last-minute renovations worth the cost? 16What are the chances I’ll be homeless if I sell? 17Chapter 2: Introducing the Key Players 19Understanding the Real Estate Agent’s Role 20Identifying important agent qualities when buying or selling a house 20Sorting out the basics to the broker-agent relationship 21Understanding the agency relationship 22Discovering the perfect agent 25Sizing up the candidates 26Making your agent work for you 30Choosing to Go It Alone 32Saving the commission 33Working out the costs of selling it yourself 34Getting some help 35Valuing the Appraisal Process 36Knowing what an appraiser looks for 37Eyeing who needs an appraiser and why 38Recognizing a good appraiser 39Knowing how much you can expect to pay 40Comprehending How a Lawyer Fits into the Picture 40Taking care of business: What your real estate lawyer does for you 41Finding a lawyer or notary 44Knowing what to look for in a lawyer or notary 46Costing out a lawyer’s fees 46Part 2: Preparing to Buy a Home 49Chapter 3: Sizing Up Home Ownership 51Recapping the Joys of Ownership 52Knowing What’s Right for You 54Considering your foreseeable future 54Saving space for change 55Knowing What You Want 55Focusing on your needs 55Making the list 57Knowing When the Time is Right 62Knowing your finances 62Comparing renting to buying 63Considering homeowner concerns 65Adding up the costs of homeownership 65Understanding the market 66Chapter 4: Understanding Your Finances 69Increasing Your Down Payment 70Dealing with debts 70Sizing up your savings 71Getting Up Close and Personal with Your Finances 74Determining What Size Mortgage You Can Carry 77Gross debt service (GDS) ratio 77Total debt service (TDS) ratio 78Generating your own figures 78Getting a Head Start with a Preapproved Mortgage 79Understanding the advantages of preapproval 79Getting the lay of preapproval land 80Anticipating the Closing Costs 81Deposit and down payment 81Identifying three key closing fees 82Appraisals, surveys, inspections,and condominium certificates 83Taxes 84Remembering Little Extras You May Not Have Considered 85Chapter 5: Knowing Your Mortgage Options 87Defining Your Financing Goals 88Knowing the potential scenarios 88Keeping interest payments in check 89Mastering the Lingo: Mortgage Jargon 101 90Mortgage principal 91Interest 91Amortization period 91Mortgage term 92Understanding the Types of Mortgages 92Conventional mortgages 93High-ratio mortgages 93Fixed-rate mortgage 93Variable-rate mortgage 94Blended payments 95Mortgage-a-rama: All the Nifty Options 96Payment options: Open, closed, or in between? 97Portable mortgage 98Assumable mortgage 99Vendor (seller) take-back mortgage 99Builder/developer interest rate buy-down 100Self-directed mortgage 101Line of credit 101Playing It Safe: High-Ratio Mortgage Insurance 102Qualifying for high-ratio mortgage insurance 102Determining the cost of high-ratio mortgage insurance 103Covering Your Bases: Life and Illness 103Going Mortgage Hunting: What You Need to Do to Get a Mortgage 104Enlisting a mortgage broker’s help 105Searching on your own 107Getting an online mortgage preapproval 107Questioning Your Lender 108Helping Your Lender Help You: Prepare Your Information 110Sharing about yourself 110Getting it in writing: The paperwork 111Part 3: Discovering Your Perfect Home 113Chapter 6: Finding a Home That’s Right for You 115Looking Closer at Your Housing Options: Determining the Best Fit 116Buying into a Fresh Start 118Buying new 118Building a home of your own 120Country living in a new home 122Following a Lead: Resale Houses 125Eyeing the pros and cons with resale houses 125Choosing the right resale home 126Rising Ambitions: Investigating Condos 128Weighing the ups and downs of condo living 128Understanding condo ownership 130Closing the deal 133Converting condos 136Living Co-operatively 138Considering the co-op’s pros 139Weighing the co-op’s cons 139Home Owning as an Investment 140Doing your due diligence 140Helping your mortgage 141Chapter 7: Shopping for a Home: The Nitty-Gritty 143Finding the Right Home for You 144Making the list 144Checking what’s on your doorstep 148Staying connected 149Checking Out the ’Hood 150Defining neighbourhood character 150Improving the prospects 151Your neighbourhood priorities 152Drilling into Opportunities 154Working with your agent 154Working online 155Working the neighbourhood 156Working your network 156Attending open houses 157Getting Up Close with Foreclosures 157Taking a Closer Look at Properties 159Stacking up the properties 159Scrutinizing more than one house 160Coming to Grips with Coming up Empty 161Getting Fired Up: Recognizing What Powers the House 162Heating systems 162Fuelling up 164Considering electricity 167UFFI 169Asbestos time, the worst of times 169Septic tanks 170Well water 171Stacking Them Up — How the Homes Compare 171Chapter 8: This Home is Great! (Except for . . . ) 177Putting Your Emotions Aside 178Reality Check: Can You Fix the Home’s Problems? 179Household cosmetics 179Things you can’t change 180When it’s not worth it 181Catching a Flipped Home 182Check It Out: Investigating Your Prospective New Home 183Moving beyond appearances 184Don’t be afraid to snoop 186Ask questions 187Determine whether the home has been maintained 187Part 4: Getting the House You Want 189Chapter 9: Making a Deal on Your New Home 191Preparing to Make an Offer 191Get your mortgage preapproved 192Get to know the local market 192Get to know the seller’s motivation 193Get to know your limits 193Ready to Purchase: Making an Offer 194Figuring out who’s who and what’s what in your contract 194Comprehending the terms and conditions (subject to clauses) 197Competing with multiple offers 199Chapter 10: Signing On to a New Life 203Taking Care of the Paperwork 203Removing conditions 204Paying your lawyer a visit 204Getting that mortgage 206The Ins and Outs of Inspections 207Getting an inspection, no matter what 208Understanding what your inspector does 208Choosing a good inspector 209Knowing what to expect when you’re inspecting 210Inspecting a Newly Built Home 212Sizing Up an Inspection Report 213Home exterior 213Home interior 214Checking Out Condo Inspections 216Outside the building 216Inside the building 218You Are the Owner of All You Survey 219Considering title insurance 219Figuring out why you need a survey 220Finding a professional surveyor 220Chapter 11: Protecting Your Interests: Insurance and Warranties 223Insuring Your Home 223Knowing what to protect 224Understanding how you’re protected 226Extending your coverage 228Getting the best deal 229Finding Out Whether the Property Comes with a Warranty 229Understanding the new home warranty 230Knowing what’s covered 231With a warranty, you’re in the driver’s seat 231Preparing for the Preclosing Walk-Through 232Chapter 12: Closing Time: Closing Events and Moving Day 235Identifying What You Sign 236Recognizing What You Pay 237Taking Possession on the Possession Date 238Making Your Moving Experience One to Remember 239Moving day versus the day of possession 239Timing is everything 240Moving your life 241Moving your stuff 241Packing it all in 243Moving it yourself versus hiring professional movers 244Being Organized: The Moving Timeline 247Two months and counting 247One month to moving day 247One week before 248The day before 249The big day 249After the move 250Part 5: Preparing to Sell Your Home 253Chapter 13: Deciding To Sell (or Stay) 255Making the Big Decision 255Identifying the reasons why people sell 256Recognizing reasons to stay put 256Taking stock of wants and needs 257Looking At Your Budget: Your Finances 259Doing the math 259Contemplating refinancing 260Considering Your Mortgage When Moving 261Paying off your mortgage early 262Letting your buyer take over your mortgage 262Taking your mortgage with you to your new home 264Scouting incentives 264Knowing the Ups And Downs Of Financing 265Trading up: Your options 266Trading down: Your options 266Timing Your Move 268Sell first and then buy, or vice versa? 268Buying before you sell 271Selling before you buy 272Cutting through the stress 273Buying time with the closing dates 275Timing it right: The ideal selling and buying scenario 276Changing Your Mind about Selling 276Home equity loans and homeowner lines of credit 276Refinancing your mortgage 277Reversing your mortgage 277Considering Estate Sales to Sell Your House 279Knowing what to do as the estate’s executor 280Being aware of taxes 280Chapter 14: Setting a Price and Knowing the Cost 283Pricing Your House to Sell 283Determining your home’s worth 284Recognising the three most common pricing mistakes 285Comprehending the Basics of Appraisals for Sellers 287Knowing if your home requires an appraisal 288Exploring how an appraisal is performed 288Appraising condominiums 290Preparing for an appraisal 291Sum Fun: The Math of Selling Your Home 292Estimating the costs of selling 292Tallying it up 296Some Good News about Taxes 297Principal residence exemption 297Moving tax credits 298Chapter 15: Making Your House Shine 299Taking a Closer Look at Inspections for Sellers 300Having your home inspected: The why 300Having your home inspected: The why not 301Knowing what your inspector looks at 301Preparing for the inspector 302Undertaking Home Improvements 303Keeping future returns in mind 303Creating curb appeal 305Alluring interiors 306Going to Market 309Your basic For Sale sign 310Advertise, advertise, advertise 310Showing (Off) Your Home 313Fielding the calls 314Staying secure 316Holding an open house 317Part 6: Sealing the Deal 319Chapter 16: Examining Listings and Disclosures 321Getting the Lowdown on Listing Contracts 321Understanding the listing contract 322Selecting your listing type 323Grasping the Importance of Disclosure Statements 325Knowing who sees your disclosure statement 326Identifying what you need to disclose 327Chapter 17: Understanding the Legal Stuff 329Cooking Up a Recipe for a Successful Contract 329Reading the Recipe: Basic Contract Know-How 330A pound of offer 331An ounce of buyer 332A pinch of deposit 332A dash of address details 333Pricing to taste 333A handful of covenants and a sprinkle of conditions 334Time frame of the offer 339If you have rental units 340Top with acceptance 341Keeping Condo Owners Covered 341Examining Deeds and Titles 342Conveyance 343Land registries 344Chapter 18: Being Cognisant of Negotiating Tricks and Bargaining Chips 347Keeping Your Eye on the Prize: What’s Really Important 348Getting an Overview of the Negotiating Process 349Knowing how low you will go 350Negotiating the subject to clauses 350Including appliances and household decor: “I never liked those drapes anyway” 353Deciding on the closing date 354Racing against the clock: Open for acceptance until 355Signing on the dotted lines 356Contending with Multiple Offers 356Dealing with Backup Offers 357Part 7: The Part of Tens 359Chapter 19: Ten Regional Concerns When Buying a Home 361Check Transportation Routes in Cities 361Be Cautious about Industrial Sites 362Stay Away from Major Roads If You’re Noise-Sensitive (Or Nose-Sensitive) 362Be Certain Your Street’s on the Level 363Make Sure You’re in a Good School District 364Be Sensitive to How Local Climates Can Affect Your Lifestyle 364Watch Out for Waterways 365Only You Can Avoid Wildfires 365Research Services in Rural Areas 366Think Twice about Leased Land 366Chapter 20: Ten Tips for Condo Buyers 367Insist on Seeing and Reading Documentation 368Have the Condo Inspected 368Use Your Measuring Tape If You Buy New 369Get to Know the Board of Directors 369Stay Away from High-Rental Developments 370Watch Out for Maintenance Fees That Are Too Good to Be True 370Ask about the Building’s Commercial Property 371Share as Few Walls as Possible, Especially If You Crave Quiet 371Own Your Locker and Parking Space 372Check for Signs of Aging 372Chapter 21: Ten Tips for Home Sellers 373Sell When Your Home is at Its Peak 373Prepare Your Home for Sale 374Fix the Little Things 374Light It Up 375Let Your Neighbours Know 375Know Where to Advertise 376Get Your Documents in Order 376Prequalify Buyers 377Tighten Security 377Send Notifications: My Dear Tenants 378Chapter 22: Ten Ways to Protect Your Investment 379Inspect the Exterior 379Know Your Surroundings: Landscaping, Yard, and Deck 380Maintain Heating and Cooling Systems 381Stay Warm: Insulation 381Breathe Easy: Ventilation 382Sleep Soundly: Home Safety 382Keep an Eye on Your Doors and Windows 383Cook Up a Storm in a Safe Kitchen 383Get Away in a Leak-Free Bathroom 384Into the Dark: The Basement and Attic 384Glossary 385Index 397