MAKING THE OFFER So you’ve found the home that fits your budget, your lifestyle and your family. Now it’s time to make it official by making an “Offer to Purchase” . If you’re using the services of a real estate agent, he or she will help you prepare the Offer to Purchase. If not, you may want to prepare this document with the help of a lawyer (or a notary in Quebec). Either way, it’s appropriate to engage the services of a lawyer or notary to research the title (property ownership) and prepare all final documentation. You’ll also need legal assistance for a property transfer if your Offer to Purchase is accepted.
FINANCING YOUR HOME Most homebuyers rely on lenders (banks, credit unions, caisses populaires, pension funds and insurance companies) to lend them money to finance the purchase of their home. This loan, called a mortgage, is repaid by you through regular payments over a period of time, typically 25 years (see “Amortization Period” on page 7). Lenders will charge interest to lend you this money. Interest is the cost of borrowing money. It will be added to your regular payments. As a newcomer to Canada, it may be difficult to finance the purchase of a home because you may not have an established credit history. See the Credit History section of this guide for alternative ways to show that you are able to manage credit in Canada. GETTING PRE-APPROVED BEFORE SHOPPING It’s a good idea to sit down with your lender or mortgage broker to discuss your needs and get mortgage pre-approval. Pre-approval means that your lender commits to giving you a mortgage up to a specified amount, at certain terms and conditions, including the interest rate. This commitment will be valid for a specific period, usually up to 90 days. Preapproval doesn’t lock you into the mortgage. You are still free to pursue other arrangements. That way, you know exactly how much you can spend on your new home. If you are buying a home using CMHC Mortgage Loan Insurance, you will need to get your home loan from an approved lender. For a complete list of banks, trust companies, credit unions, and other financial institutions approved to give loans insured by CMHC, visit www.cmhc.ca and type “approved lenders” in the search box.
Expect to negotiate. The process of making an offer, receiving a counter-offer and then revising it again until it is accepted is not uncommon. The whole process can seem like a roller-coaster ride, exciting, but it can be stressful. It’s all part of making the deal work best for you and the seller.
Your Offer to Purchase is likely to include: ■■ The purchase price offered. ■■ The amount of the deposit. ■■ Extra items such as window coverings, refrigerator, stove, washer and dryer that you might want to negotiate into the purchase price (also called chattels). ■■ The closing day (date you take possession of the home) – usually 30 to 60 days from the date of agreement. ■■ A request for a current land survey of the proper ty. ■■ The date when the offer becomes null and void. ■■ Any other conditions that go with the offer, including approval of “mortgage financing” and a “home inspection” . For more on this, see the Home Inspection section of this guide.
Canada Mor tgage and Housing Corporation 5
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