THERE ARE NORMALLY 3 IMPORTANT DATES WHEN YOU PURCHASE A PROPERTY

1. Subject removal date - Subject removal is once you have an accepted offer with the seller on terms and conditions in the contract, you will need to work on removing your subject conditions (ie subject to financing, inspection, strata minutes if applicable, etc). The subject conditions are your opportunity to do your homework and make sure you’re satisfied with all subject conditions.  This is typically 5 business days but can vary.  Once you have reviewed all of your subject conditions and are 100% comfortable to proceed you must sign a subject removal form.  This is the point when you’re making your firm commitment to the property.

2. ​Completion date​ - the date on which the seller is entitled to the net proceeds of the sale and the buyer is entitled to the transfer of the title. Real estate commissions and legal fees are normally paid out at this time to the transfer of the title. Real estate commissions are normally paid by the seller, not the purchaser.

3. ​Possession date​ - the date on which the purchaser is entitled to possession of the property.

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PLEASE SEE STEPS BELOW REGARDING THE PURCHASE PROCESS

STEP 1 - Get pre-approved   

Pre-approval is a strategic step in the home buying process because:

• You know how much you can borrow, so you don't waste time looking at properties you can't afford.

• You have an edge when you make an offer, because the seller knows you're more likely to get a loan and that you are a serious buyer

• You save time when you apply for your loan because you have already assembled some paperwork.

• Real estate agents may encourage you to get a pre-approval before they begin working with you.

 

STEP 2 - Find a realtor

When you use a realtor (buying realtor) to purchase a property you typically do not have to pay a commission as the buying realtor will receive a portion of the selling realtor’s commission which comes from the seller.  Good realtors are trained, knowledgeable professionals that can save you considerable time.

 

STEP 3 – You have found a property      

Once you have found a home, the next step is to write an offer which is the first step in negotiating (ie purchase price, amount of deposit, subject removal date/conditions, completion date, possession date, etc) a sales contract with the seller.  After you have presented the offer on a home and the offer has been accepted by the seller, there is typically 5 business days to remove the “subjects” but this can vary.

 

Once the offer has been accepted I will request a copy of the mls (feature sheet of property), contract of purchase, property disclosure statement and Strata minutes/Form B Information Certificate (if applicable) from the client or the realtor and submit the mortgage application with the property information to the lender.   The lenders can be very busy so it is very important to submit the mortgage application as soon as possible and to provide the requested documents to approve the mortgage in a timely manner. 

 

STEP 4 – Mortgage approval process

• I submit the mortgage application electronically to the lender

• The lender will issue a commitment typically 1 to 2 days after submission outlining what documents/conditions are required to fulfill the mortgage approval

• I will send the lender the required documents (down payment confirmation, closing costs confirmation, employment confirmation, etc)

• I will order an appraisal if required.  An appraisal is an estimate of a property's market value, used by lenders in determining the amount of the mortgage.

• The lender will review the documents and issue a full approval once all the conditions have been satisfied

 

In addition to the down payment lenders require confirmation of closing costs (ie for property transfer tax, lawyer fees, inspection fees, etc) and they use 1.5% of the purchase price for confirmation.  You do not necessarily have to use the full amount but lenders want confirmation of this amount in your bank account and it is the lawyer who determines the final amount required to complete the transaction.

 

It is highly recommended to provide as much documentation (ie job letters, paystubs, down payment confirmation, closing costs confirmation) at the pre-approval stage as things move very quickly once an offer has been accepted.                                                                                                

STEP 5 – Removal of subjects

If all subject conditions have been satisfied (ie financing has been approved, home inspection goes well, strata minutes are good, etc) the buyer will sign the subject removal addendum on the subject removal date and provide the deposit as specified in the contract.  The deposit forms part of the down payment and is the money paid up front by a purchaser as security for completing the transaction.  The deposit amount is determined by the parties involved to the transaction and can represent 5% to 10% of the purchase price and clients must have access to this amount on the subject removal date or shortly thereafter as stipulated in the contract.

 

The deposit is determined when the contract of purchase is written up and your realtor will be in the best position to recommend the deposit amount.  The important thing is that you have access to the deposit money and if the deposit is being borrowed (ie from family, line of credit, credit card, etc) or from RRSP’s it is imperative that you notify the mortgage broker at the pre-approval stage.

 

I will meet with the clients to sign the mortgage documents, review the mortgage product and explain what happens between subject removal and completion.

 

STEP 6 – Choose a lawyer or notary

The purchaser will have to designate a lawyer or notary at least a few weeks before the completion date.  The lender and the realtor will send their instructions to the lawyer and typically 1 to 2 weeks before the completion date the lawyer will call the clients to arrange a time to sign documents on or just before the completion date.  The lawyer will normally request 2 forms of ID, a void cheque where you would like your mortgage payments withdrawn from, and will request a certified cheque or bank draft for the rest of the down payment and closing costs.  If the client has purchased a house (not a condo or townhouse) they will have to arrange house insurance prior to completion and provide confirmation to the lawyer.

               

STEP 7 – Completion

The date on which the Seller is entitled to the net proceeds of the sale and the Buyer is entitled to the transfer of the title. Real Estate commissions and legal fees are normally paid out at this time to the transfer of the title. 

                                                                                                                                      

STEP 8 – Congratulations! 

You get your keys to your new home!

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This information is being provided to assist in the planning of a home purchase. It is not intended to be legal advice and the information set out may not be applicable in all cases.