Buying a house in Canada has differences and commonalities with Iran. In this article, my whole goal is to help you step-by-step in simple language so that entering your new nest is peaceful and successful.
To achieve this goal, we must go through all the steps together. There is much content. But I have tried to explain the essentials to you. Whether it’s your first home or you’ve done hundreds of real estate transactions, these materials will help you from “decision to handing over the keys.”
To do justice and provide you with a complete resource for a guide to buying property in Canada, in addition to the steps of buying property in Canada, we also review the additional costs, rules, and conditions for buying different types of property and property prices in Canada.
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Steps To Buy A House In Canada
As I explained on the home buying page in Vancouver, many of our compatriots wait to prepare the down payment first and then go to the consultant. I suggest that even if you want to buy in the distant future, get advice from at least one realtor before making a down payment; Because:
Contrary to what you think, you may need a smaller down payment or be able to get it from the bank. I have seen many people spend much time putting together a down payment, But due to the change in house prices in Canada, they have to buy more expensive ones.
Having a plan and roadmap will help you reach your goal sooner. Ambiguities create fear and doubt and are breaks and additional burdens.
When it is unnecessary to continue with the same person from whom we got advice, use the free facilities around us.
Your biggest gain from meeting a realtor is what you learn. For this reason, instead of the “consultation” session (which is common and for attracting clients), I have a “training and question and answer” session. Because I prefer people to choose consciously, not by pressure and insistence, and even if they don’t choose me, I know I have done something useful and helped.
Getting pre-approval for a mortgage, choosing the right loan, and choosing a bank
The next step is to meet with a loan specialist (get help from friends and your realtor). I advise going to an independent mortgage broker, BMO, and RBC banks to buy real estate in Canada. Because these two banks have mortgage specialists, independent mortgage brokers need access to their products
Loans are divided into three general categories:
Loans that depend on your income: Usually, about a third of your annual income, after deducting your expenses and financial obligations, determines your ability to repay the loan and, as a result, the amount of your loan. Generally, you can borrow between four and six times your annual income.
Loans that depend on your property: If you have a deposit in the bank, you can use one-third of it for the down payment of the purchase and borrow two-thirds of it from the bank without your income being the criterion. The advantage of this loan is that you can use an amount in your account to buy your second or third home or invest in your business.
One of the most important parts of the Canada Home Buying Guide page is here, and the good news is that almost all homes for sale are listed on the MLS system. So you and your consultant have access to all listings (ads) and see them. But this search method is time-consuming, and you must constantly filter and re-check some houses. Because the number of ads is usually high, it is natural to doubt whether you have seen it before or not. So what is the solution?
Method 1: Search on realtor.ca and rew.ca. You can save your search on these sites. That is, using this method, once you have filtered, you can save it, and after that, new listings will be emailed directly to you.
The second method: using the Paragon system. I use this system myself. Because in addition to having more and more detailed settings, it allows you to leave a note for each of these houses and specify which ones you like and which you don’t like (these features are evident in the photo below).
Another feature of the Paragon system is that you can discuss a listing with your consultant on the spot (if the consultant gives you access). Most importantly, you can specify the search area on the map.
Presentation Of The Offer, Familiarization With The Paperwork, And Negotiation
Paperwork: In Canada, basically everyone complains about many forms. Although I also have to spend much time preparing documents for every property purchase in Canada. But because the discipline of this country is due to them, I wholeheartedly accept and follow all the rules and conditions of buying property in Canada.
There are several forms that your consultant prepares, and you sign them or write your initials there.
DORT: Your advisor has obligations to you that are written in this form. The counselor should give you a copy so you know your legal rights.
Privacy Notice and Consent: In this form, you specify who, other than your advisor, can contact you by phone or email.
Agency Agreement: A contract between you and your consultant in which your moral obligations to each other are written (if you are not satisfied with the services of your consultant, you can unilaterally terminate it. Additional explanation in the video on this page)
Contract of purchase and sale: This offer becomes a contract between the buyer and the seller after signing (I have put it at the bottom of the first-page photo).
Remuneration: Through this form, your consultant informs you what amount the seller has given him as a salary (or any gift and benefit) (usually, it is a percentage of the price of the house in Canada).
Subject removal: Whenever one of the conditions you set in the contract is fulfilled, you notify the seller with this form.
Among the above forms, you can set up forms 1, 2, and 3 at the very beginning of the work. Suppose you prepare these forms at the beginning. In that case, you will have enough time to read them carefully and ask your consultant whenever you have questions. Meanwhile, on the day you want to write an offer, your time and focus are only on your purchase, not paperwork. (My way of working is that I explain all 6 forms to my client’s line by line on the first day, and I also send a copy so that if they want to look at it later patiently and without worry and sign the first three, but the working method of your consultant can be different).
Contract and offer steps:
When you like a home, your consultant will send a completed contract (offer) to the seller’s consultant based on the price, office date, and terms you want.
The seller’s advisor and the seller can accept or change your terms after receiving the offer. If they accept your offer without change, it is called an Accepted Offer. But if they make changes and send it to you, it is called Counter Offer.
If they change the offer, you and your consultant decide whether to accept it or make changes and send it back to the seller.
It back and forth continues until one party withdraws or both parties reach an agreement and an accepted offer is formed.
After this, it is time to fulfill the conditions (subject) the buyer brought in the contract, such as Inspection, Finance, and Document.
When these conditions are fulfilled, the buyer’s consultant informs the seller’s consultant of his satisfaction using the subject removal form. In the same form, he can inform the buyer of his chosen office.
Usually, the day after submitting the subject removal form, the buyer gives a bank check of 5% of the total price of the transaction to his consulting agency (Deposit). This money remains in a bank trust account called the real estate agent until the day of the office.
A few days before, the buyer’s office and Al-Baghi Bank deliver the transaction price and expenses to the Notary Public (office) so that the home office can transfer the document on the Completion Date.
Usually, the day after the conveyancing day, your consultant will take the house key from the seller’s consultant and hand it over to you.