Anchor Realty

Doug Moxam
902-830-1448


THE BUYING PROCESS
Buying a house is a complicated process. Here is a brief explanation of how it works .

You and your real estate agent
The buying process
Agreement of Purchase and Sale
Deposit
Closing or Possession Date
Conditions in your agreement
Closing costs

YOU AND YOUR AGENT

Buying a house is totally different than buying any other large ticket item.The owners of  the houses list or sign a contract to sell the house with a licensed real estate agent. The owners pay the agents a commission when the house is sold. These houses are listed on a system called the MLS system ( Multiple Listing System).Any agent in any real estate company has access to information on any house listed in the Halifax area on this MLS system.. Unlike car buying where you have to deal with different salespeople for different types of cars you only have to deal with one agent who has access to all MLS listings. Interview some different agents and then pick the one you are most comfortable with. You should choose an agent who is familiar with the area you are interested in and the type of housing you require.
Once you choose your agent work with this agent and only this agent. If an agent knows he/she is working with a loyal client the agent will spend as much time as it takes to find you a home. On the other hand if an agent knows you are working with several agents the agent will spend less time looking after your interests. An agent is paid on a 100% commission basis. If the agent sells a home the agent gets paid. If the agent doesn't sell a home the agent doesn't get paid. Pick your agent and stay loyal .Demand good service and if you don't get it choose another agent.

HOW THE BUYING PROCESS WORKS

Once you have selected your agent, you and the agent will sit down and together you will select houses that suit your needs. Every second week an MLS catalog of homes is printed for the entire Halifax metro area and distributed to all the real estate agents. This catalog generally has over 5,000 listings in it broken down by area and price. You and your agent can look at this catalog and decide what you want to see. The agent will phone the agents who have the properties listed and make appointments for you to view the homes. Your agent will then take you to see the homes. After you have viewed the homes you pick the home that you feel is the right one for you. This may take several outings but not necessarily. Many buyers find there home on the first outing. You will then prepare a written offer or what is referred to as an " agreement of purchase and sale" on the home with your agent.

THE OFFER  or AGREEMENT OF PURCHASE AND SALE

When you make an "offer" on a house you will sign an Agreement of Purchase and Sale. This is a written contract that you will sign and if acceptable the owner will also sign. This agreement sets out the conditions under which you are agreeing to buy this house. It is a binding contract between the two parties and will stand up in a court of law. It is for this reason that you must understand some conditions that should be in your offer.

Deposit:

You will be required to write a cheque as a deposit when you sign the offer. This deposit is written to the listing real estate company in trust. The deposit cheque is only cashed if the offer is accepted. It is held in the real estate companies' trust account until you take possession of the house or what we refer to as the closing date. This deposit is credited towards the purchase price on closing.You can use this deposit as part of your down payment.
This deposit will be returned if all the conditions you set out in your agreement are not met. For example say you couldn't arrange financing then the deposit is returned. You also agree to forfeit this deposit if all conditions are met and you do not go through with the sale.
The amount of the deposit will vary but will be a minimum of $1,000. There are several good reasons for giving a larger deposit. Discuss the deposit with your agent

Closing Date:

The date you take possession of and pay for the house is referred to as the " closing date". This date is set out in the agreement. You should choose a date that will be acceptable to both you and the owner. A reasonable amount of time is usually 4 -8 weeks from the date you make your offer. This may vary considerably. The owner may require much more time or if the house is vacant you could take possession within a couple of weeks. Discuss this with your agent.

Conditions:

The conditions that can be put into an agreement are endless. I have seen it all. .However there are several conditions  that are standard in all agreements such as:

Conditional upon the purchaser obtaining financing.
Unless you have the entire amount of the purchase price in cash you should always put a condition in the offer for financing. This condition will outline the amount of financing you will need, the interest rate and the terms of the mortgage. You will be given a set number of days to arrange this financing, usually 5 banking days. If the lender turns you down for some reason the agreement is no longer is force and your deposit is returned.

Conditional upon the purchaser having an inspector inspect the property for structural soundness
Most purchasers have the house inspected by a professional home inspector after they have an accepted offer. There are many inspection companies to choose from. Ask your agent for recommendations. The inspector will charge about $250. The condition would set out a set amount of days usually no more than 3 for this inspection. In the event the inspection uncovers major structural problems with the house your deposit is returned and the agreement is no longer in force.

Conditional upon the owner providing a " Property Condition Disclosure Statement"
When a house is listed by an agent the owner is asked to fill out a Property Condition Disclosure Statement or PCDS. This form asks the owner many questions about the structural soundness of the house such as has the owner had any leaks in the roof, problems with the electrical or plumbing system, and many other questions about the house. In your offer you should ask to see this PCDS and have at least 24 hours to review and accept this PCDS. This is important. Say the owner has an ongoing leak in the basement that is disclosed in the PCDS. You may choose not to go ahead with the purchase.

Conditional upon the owner providing a survey or plot plan
You will want to know what the property lines are for the property you are considering. You should ask for the owners copy of the survey and have a certain amount of time to approve this survey usually 1 day. It is a good idea to have your own survey done later but usually the owner's survey is accurate and you will be able to locate the boundaries of the property.

The owner warrants that the property does not contain Urea formaldehyde foam insulation (UFFI)
Ureaformadehyde Foam Insulation (UFFI) is an insulation that was installed in many homes several years ago. It was found to cause serious health problems. A condition whereby the owner warrants the property doesn't have UFFI in the house is a standard condition.

Conditional upon certain items remaining
Items such as drapery tracks, carpets, light fixtures and any other fixture that you want to include such as appliances, shelves etc.. will be identified in your offer. The list can be endless but should include carpets, drapery tracks, mirrors in bathrooms, blinds and built in appliances such as dishwashers. You should discuss with your agent the items you want to include in your offer and the agent will write this items into the agreement.

Conditional upon a water test and the results meeting the Nova Scotia health standards( if the property has a well ).
If the property has it's water supplied by a well then you will have a condition outlining provisions for you having the water tested and the results being satisfactory. You physically take samples of the well water and bring small bottles of water to the Department of Health for testing.The Department of Health will test the water for a fee which is usually $50 for such items as bacteria, arsenic and uranium. There are levels that they have determined as satisfactory. If the water does not test within this parameters your agreement becomes null and void and your deposit is returned. The time given for this test is usually at least 7 days.

Other Conditions
As I said the list of potential clauses is endless. Consider the things that important to you and discuss this with agent.