If you are considering buying a property in Canada
then this guide is for you. As relocation specialists and licensed realtors
we find that many people from outside Canada do not know how the system
works in Canada. This guide is based on the process in British Columbia,
but the system is very much the same everywhere in Canada.
It is
important to understand how buying property works. Ignorance of the process
can be costly. If you know how it works then you can get a better deal and
make the whole process less stressful.
You don’t have to live in
Canada to buy property. So this guide could apply if you want to buy an
investment property or fancy owning a ski chalet or a cabin on a lake. And
if you are emigrating, you can get your dream home – and even get land and
build your own.
Good news for home buyers
Buyers
of properties in Canada have a great advantage over those in countries
where the real estate market does not have a centralized online database.
In Canada we have the Multiple Listings Service (MLS). This online database
holds details of almost all property for sale throughout Canada. As the
system is online, our clients in the UK and elsewhere in the world can
search for properties.
The MLS is a great place to start your
search for a home in Canada. But the public only has access to part of the
information on properties. Realtors have more information and when this is
just one of the reasons why you will want to engage a realtor to help you
buy. Another good reason is that you do not pay for their service – they
are paid by the seller’s realtor for introducing a buyer.
Making use of a realtor
When you find a
property you are interested in, you will want to find a realtor to act as
your agent – called a buyer’s agent. Their job is to represent your
interests exclusively. This is why you should not use the same realtor who
is selling the property – they represent the seller and cannot properly
protect your interests.
Make an offer
Assuming
you have found a property you want to buy, the next stage is to make an
offer. There is more good news here because this is a legal process. The
offer is made in writing. This is where your realtor should use their
inside knowledge of the market to help you arrive at an offer that is right
for the property and the current market conditions.
The offer will
contain not only the amount, but also the timescale. That’s quite
revolutionary for some of our clients, used to having to live with
uncertainty and doubt over when and whether the sale will go
through.
What’s my subject?
Your offer also
includes what are commonly called “subjects”. These are conditions under
which your offer is made. The most common ones are subject to financing, an
acceptable property inspection and title search. You can add other
“subjects” but of course the seller need not accept them.
The point of
these subjects is to protect your interests. Remember offers, once
accepted, are binding. So these subject clauses are there so that you can
check you are really in a position to buy the
property.
Negotiation
The offer is presented to
the seller. This is done by your realtor. The seller may accept the offer,
reject it or make a counter offer. All of this is done in writing, with all
parties signing or initialling changes made.
Finally you and the seller
will agree and the offer or counter offer is accepted. There is no chance
of another buyer coming along at this point as the seller is legally bound
by this contract until the time that the subjects are due to be removed.
I just got my subjects and now I have to remove
them!
Once the offer is accepted, there is an agreed period,
specified in the offer, for you to “remove the subjects”. All this means is
that you have to ensure that all the conditions you made in the offer can
be met.
During this period, usually a week, you will finalize your
mortgage arrangements, get the property inspected and get the title search
done. A busy time. But a very important one.
Assuming all goes well,
you will sign the contract again to formally remove the subjects. This has
the effect of making the sale binding on both you and the seller. The
property will be yours on the agreed completion date.
At this point you
will need to pay the deposit.
Legal stuff
The
final stage requires you get a lawyer to complete the sale. This is to
ensure that legal title is transferred to you and the mortgage is arranged.
They deal with the funds and will make sure that everything is in place for
the completion date.
Moving
The final step is
moving into your new home. As we are both realtors and relocation agents,
it is at this final step, when our clients move into their new homes, that
we feel we have helped them settle into their new country. And as many of
our relocation clients, like us, come from the UK with it’s unreliable and
imperfect real estate system, it is also a pleasure to show them that life
in Canada can really be a lot easier than it was in the
UK.
----------------
Sue and Frank Gerryts live in Vancouver,
British Columbia. They are licensed realtors and run a relocation company.
They can be reached at Relocation2bc.com or via e-mail at
frank@relocation2bc.com
Article Written
By Frank Gerryts
Last Updated: Thursday 15th December
2005 - 7:04pm GMT
United States Edition