Buying a home is probably the biggest investment you will ever make, so you’ll definitely want a team of professionals to help you every step of the way.
Important members of your team may include a lender or mortgage broker, a real estate agent, a lawyer (or, in Quebec, a notary), an insurance broker and a home inspector. Before selecting any of these professionals, however, it’s wise to do some homework and prepare some questions.
Lender
When looking for a lender, keep in mind that many different institutions offer mortgages such as banks, trust companies, credit unions, pension funds, insurance companies and finance companies. Therefore, it’s a good idea to shop around and speak with more than one lender, because terms and options will vary.
To find a lender or mortgage broker, you can ask for a referral from your real estate agent, family members, friends or other professionals. You can also contact the Canadian Association of Accredited Mortgage Professionals (CAAMP).
Real estate agent
If you are buying a resale home, chances are you will work with a real estate agent. The agent’s job will be to help you find the ideal house, write an Offer to Purchase and negotiate on your behalf to get you the best possible deal. Your agent will also be helpful in providing important information about the community and should be knowledgeable about all aspects of the home-buying process.
When it comes time to select a real estate agent, don’t be afraid to ask questions – especially about fees, as some agents charge a “buyer’s agent” fee. To learn more about real estate agents, including their ethical obligations, contact your local real estate board.
Lawyer
You will need a lawyer to protect your legal interests, such as ensuring you have valid title (proof of ownership) to the property you are buying and that it is described correctly in every document. He or she will review all contracts before you sign them, especially the Agreement to Purchase.
Lawyer fees range widely and depend on the complexity of the transaction, so be sure to shop around for rates. To find lawyers who specialize in real estate law, check with your local law association.
Insurance broker
An insurance broker can help you with your insurance needs. Lenders insist on property insurance because your property is their security for your loan. Your lender may also offer mortgage life insurance (not to be confused with mortgage loan insurance), which provides coverage for your family should you die before your mortgage is paid off. However, you may want to compare rates between both an insurance broker and your lender.
Home inspector
You should consider having any home you are thinking of buying inspected by a knowledgeable and professional inspector. The home inspector’s role is to inform you if something is not functioning properly, needs to be changed or is unsafe, or even where there may have been problems in the past. Although there is no legislation governing home inspectors, a good one generally belongs to a provincial or industry association.
In order to make wise decisions throughout the home buying process, you should learn all you can. Visit the Canada Mortgage and Housing Corporation website and search “step by step” for CMHC’s Home Buying Step by Step interactive guide.
Mark Salerno is district manager for the Greater Toronto Area at the Canada Mortgage and Housing Corporation. You can reach him at 416-218-3479 or msalerno@cmhc.ca.
