In order to obtain a conventional mortgage, home buyers are required to provide a down payment of at least 20% of the purchase price. If you do not have the full 20% down payment, it may be possible to obtain a high-ratio mortgage that will require a down payment of at least 5% and the purchase of default insurance.
Be sure to visit at least two lenders before you make a decision.
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ELEMENTS OF AN OFFER TO PURCHASE A PROPERTY
An "OFFER" - also known as an Agreement of Purchase and Sale - is a legal agreement to purchase a home and, upon acceptance and fulfillment of any conditions, it becomes legally binding. Below are some key elements of an OFFER that you should consider.
DEPOSIT: The initial deposit should be between 2-5% of the purchase price. On. Some occasions, an additional deposit can be given after the fulfillment or removal of all the conditions by the Buyer and/or Seller. This is not a requirement but, in a competitive market, it can show commitment and enthusiasm by the buyer.
INCLUSIONS: These may include such items as: the dishwasher, refrigerator, stove, light fixtures, window coverings, etc.
EXCLUSIONS: Includes items that the Seller wishes to retain (e.g. Chandeliers, Mirrors, etc.)
IRREVOCABLE: The Agreement of Purchase and Sale will include an Irrevocable Date which sets the time limit the Seller has to accept or counter the Buyer’s offer.
COMPLETION DATE: The date upon which the Buyer takes possession of the property.
CONDITIONS & TERMS: An Offer to purchase a home will likely include various conditions and terms. The most common conditions are: Financing, Home Inspection, Insurance, and Sale of Buyer’s Home. If any of the conditions are not met, the Buyer may change or cancel the offer even if it has already been accepted by the Seller. Standard clauses that may be included in an Offer are: Payment of the Balance of the Purchase Price, Chattels and Fixtures included to be in Good Working Order, the Right to Re-Visit the Property Prior to Closing, etc.
SATISFYING THE CONDITIONS: Typically the Buyer has five to ten business days to satisfy the conditions in the Offer. Upon acknowledgement by the Seller of receipt of the Notice of Fulfillment of Conditions or the Waiver of Conditions, the sale will be FIRM.
IDENTIFICATION: The Federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act requires Realtors® to identify clients involved in the buying and selling of real estate. Realtors® and their Brokerages must be provided valid government identification and are required to record the name, address, date of birth, and occupation of all parties to a real estate transaction.
For more information on the Financial Transactions and Reports Analysis Centre of Canada, visit: FINTRAC
IMPORTANT INFORMATION REGARDING MULTIPLE/DUAL REPRESENTATION
A situation can arise where the Sales Representative/Broker (or different individuals from the same brokerage) represents the interests of both the Seller and the Buyer in the same transaction. The Sales Representative/Broker has the fiduciary responsibility to both the Buyer and the Seller and must act in the best interests of both parties. The duty of full disclosure is waived in Multiple Representation in order to remain neutral to all parties involved.