HOME SELLING TIPS
If you are currently a homeowner, you’ll also have to consider selling your current home. The most common question is: Do I Sell First or Do I Buy First?
1. If you find a home that you want to purchase before being able to sell your existing property, you can make a “conditional” offer on the sale of your existing home to avoid paying for two properties.
2. If you sell your existing home before finding your next home, you can extend the “closing period” to allow for more time in finding your next home. Most home buyers with the assistance of their REALTOR® are able to successfully coordinate their “closing date”.
Arrange Your Mortgage
As mentioned earlier, an important step prior to looking for your dream home, is to get a mortgage pre-approval so your home search efforts are targeted to properties you know you can afford.
Some basic mortgage considerations include choosing between:
1. Down payment – putting a larger down payment will mean that your mortgage becomes smaller, though you must keep in mind to reserve some money for fees associated with home buying/ownership, taxes, repairs, moving, furniture, etc.
2. Fixed rate mortgage – involves an interest rate that does not change during the entire term of the loan, and offers peace of mind as your monthly payments will remain consistent during the term
Variable rate mortgage – involves an interest rate that changes based on market rates, and can be unsettling if the rates begin to rise
3. A mortgage term is the amount of time the bank has agreed to lend you the money. Terms usually
can range from 6 months to 5 years, after which, your mortgage is renegotiated
Long term mortgages may be more attractive when rates are beginning to rise or trending upwards, while short term mortgages would be preferable if rates are high
4. Open mortgage – offers flexibility to repay the mortgage with a full payment or large payments anytime during the term without penalties. Typically, the interest rate for an open mortgage is higher
Closed mortgage – usually offers lower rates, but do not have the flexibility of allowing large one-time payments
5. Amortization – is the process of paying off the loan by periodic payments of blended principal and interest. A shorter amortization involves paying less interest, but your monthly payments would be larger, whereas a longer amortization would lower your payments
When applying for a mortgage prepare the following:
- Letter of employment confirmation (include your position, your pay and how many years you’ve been with the company)
- List your assets (your car, stocks, bonds, GICs, etc)
- List your liabilities (car payments, student loans, credit card debt, etc)
- Social Insurance Number
- Your chequing account number
- Your lawyer’s contact information
- Information about the house you want to buy
ADD TO YOUR TEAM: LAWYER AND HOME INSPECTOR
With the legal documentation and steps involved in transferring land ownership from one party to another, retaining a lawyer to avoid setbacks such as fraud, zoning and government issues, taxes, and to ensure a smooth legal transfer makes having a lawyer worthwhile. A lawyer can also be there to answer any questions and explain any legal jargon to assist you along the process.
A thorough home inspection, which often costs less than a few hundred dollars, can save you from expensive, unforeseen costs and surprises.
An inspection will look into things such as your home plumbing and electrical systems, the home’s foundation, roofing, walls, windows, etc. Other checks may also include inspection for asbestos, mould, dangerous wiring, and evidence of mice or termites.
Once the work has been conducted, the home inspector will provide you with a summary and estimated cost for repairs if necessary.
To ensure that your home inspector has superior training and hands on experience, make sure that they are a professional and a member of the Canadian Association of Home& Property Inspectors (CAHPI).