First-Time Home Buying with HomeSellerPak - Canada

Are you buying your first home? Don't worry. We'll make it easy with HomeSellerPak.

Get A Pre Approved Mortgage
Start by getting pre-approved by your bank, mortgage broker or lender of choice; this will help to determine what you can afford to spend on a house. We recommend getting approved by at least two lenders - as a first time home buyer you are excited just to qualify and most lenders quote the going rate or posted rate. In most cases you can negotiate at least a 1/2% to 1% lower than that. By being approved by two lenders, you are in a position to further negotiate the interest rate. A 1% savings on a $250,000 home is $250 per month. Over the life of a mortgage that can add up to over $50,000 in savings; negotiate hard. Another tip is to pay your mortgage weekly or bi-weekly (as frequently as possible). Over the life of your mortgage this can save you tens of thousands of dollars and cut years off the life of your mortgage. You'll already look like a pro if you start by doing these two things.

Get a Real Estate Lawyer - They do all the legal work for you
Find a local real estate lawyer. You can find one by clicking here, in your local phone directory or online by searching real estate lawyers in any major search engine. Call several, let them know you are buying a house privately and that you want a price on their services including writing the offer to purchase. Once you have found a lawyer, the house of your dreams, and you and the sellers have come to a deal in principle, your lawyer will then take care of everything else.

Start looking at homes. You are ready to buy.
With HomeSellerPak you will be dealing directly with the homeowner. The homeowner will show you the home and you will negotiate the final selling price with the homeowner. Don't worry - it is as easy as buying a car. Once you have found a home you like and you want to make an offer - what do you offer? What is the process? It's simple. You negotiate over the main points: price, closing date and what is included. Once you have an agreement in principle, that's it. Your lawyers will then write up the offer, ensure you have covered everything and present it to both parties to sign. You're done!

You don't need a Real Estate Agent, but if you want to use one you can.
If you are nervous about buying on your own and prefer to work with a real estate agent, many of our sellers co-operate with these agents. On our listings you can see the BAP symbol (Brokers and Agents Protected). These sellers will pay your agent a commission. With sellers not willing to pay a commission you will need to make an agreement with your agent to pay them directly. If you agree to 2.5% commission with your agent, just deduct at least 2.5% from your offer price to pay your agent directly. You really don't need an agent with HomeSellerPak as we make it easy. All that matters is that you get the house you want!

Making the offer

i) At this point, you have probably looked at a couple of other homes in the area and have a decided price range price as well as looked at the real estate MLS (Multiple Listing Service) to see comparable prices in the area. You can also go to one of the online appraisal services (Home Valuations Canada) in the links and resources section. Online services typically cost $30 and can provide you with the value of that property as well as others in the vicinity. You can also write in the offer to purchase, as a condition of closing the sale, that the home must be appraised by a certified appraiser and that the appraisal must be to your liking. Though you have been approved for financing, it is wise to put a condition of financing in the offer as your lender will do an appraisal before lending you money. They do this to ensure their loan is safe and you did not over pay. Lastly the appraised value from online appraisals and comparisons should be based on the home in good condition. Any needed repairs should be deducted from the offer price. For example if the seller is asking $235,000 and you feel a fair price is $230,000 if the house was in good shape. You notice however that the roof needs to be repaired and the estimated cost is $5,000 you may offer $225,000.

ii) You will want to use our non-legal offer to purchase form to use as your working copy in making an offer to the seller. Please print off the Offer to Purchase and use it as we go forward. You will write down what you want to give and get from the seller. This is not a legal form but a working copy. Once you and the seller agree, you will forward this to your lawyer to complete the legal offer to purchase.

Price - This is the amount you want to pay to buy the home/property for based on your research and deduction for any repairs. You will make a condition of sale that a home inspection is to be completed (this price may change based on what your inspector finds). Price is usually the number one important item to a seller.

Deposit - This is an amount you will give to your lawyer, who will give to the sellers lawyer as good faith that you are going to complete the transaction. This amount is usually 1-2% of the homes value or sometimes just between $2,500 and $10,000. If you walk away you will be walking without the deposit after you firm up this deal. DO NOT GIVE THIS MONEY TO THE HOMEOWNER! It goes to your lawyer who will forward it to the sellers lawyer with the legal offer to purchase or in some cases an escrow agent. Your attorney will specify who.

Closing Date - This is the date you would like to take possession of the property. This can be tricky as sellers want a certain time line to coincide with schooling or completion of their new home. Sellers are often willing to take a lower price in return for a more convenient closing date. Also keep in mind that end of months can be really busy for lawyers and getting moving trucks can be impossible. By choosing a middle of the month or weekday closing date you can save money and hassles.

Terms - These are items you want included in the property, excluded and work to be done. Things you may want to include may be: appliances, furniture, window coverings, light fixtures, etc. For this draft, just note them on the non-legal offer to purchase, but for the legal offer to purchase get serial numbers, take photos and have your attorney add them as an exhibit to the agreement. While unlikely - it is important to have serial numbers, photos and descriptions to prevent homeowners from switching furniture. Take nothing for granted and include anything of value.

If you want items excluded from the purchase such as drapes, sheds, etc, be specific and put it in the agreement. If the items are not removed from the property on the closing date the Seller will then be responsible for removing them. With the cost of disposal today, removing items can be costly. Work to be done should be fully described as best as possible and all work shall be completed to the buyers satisfaction should be included in the agreement.

Conditions of Sale - This means you will not buy the house if any of these conditions are not met to your satisfaction. As a new home buyer MAKE SURE you add in your conditions. These will ensure that you get what you want and the professional help you need.

Financing - Check this box. Give yourself the 72 hours. As soon as the seller agrees to your offer, notify your lender and provide them with the property details. Most lenders do an appraisal before giving you the final go ahead, so get this started right away.

Home Inspection - Check this box. The agreement will become void if the property does not pass the home inspection. As soon as you have a deal in principle, hire a home inspector and have the property fully examined. If the home insepector finds problems, you will need to decide whether to reduce your offer, have the seller fix the problems to your liking or accept the house as-is before a deal can close.

Home Appraisal - As a first time buyer you want to ensure that you are not overpaying - so by checking this box it gives you a chance to double check your price by having an appraiser give you their professional evaluation which will let you sleep better at night.

Purchasers Home Selling - This should not apply to you as you are a first time buyer. This would only apply if you needed to sell another home first before you could buy this one.

Other Conditions - You may have other conditions such as finding out about adequate schooling, bussing, transit, city planning, land use etc. Your lawyer can help you with this.

Now forward the non-legally binding offer to the seller. You can call them and go over it on the phone, through email or through fax. If emailing or faxing, always call to make sure they have received it. If they accept the offer as-is, they will then sign and return it to you - or they may want to counter offer. If they counter offer, they will present their revised offer, which could mean a price change, new terms or different conditions. You can then decide to agree to the changes, try to meet in the middle somewhere or you may walk away and buy another property. You may also counter offer their counter offer and come back with revisions again if you feel you are close to reaching an agreement. Keep in mind that both the buyer and seller may have to make some concessions to enable the purchase to be completed.

If and when you obtain an agreement in principle, meaning you agree to buy and they agree to sell at a certain price and terms, you should call your real estate lawyer as quick as possible so they can draft the legal Offer to Purchase. Once you and your lawyer complete the legal offer, forward it to the sellers and their lawyer so it can be signed to finalize the deal.

Now you are a homeowner! Congratulations!

All you need to do now is plan the move. Don't forget to contact the hydro, utilities, phone and cable companies, schools, etc. to arrange your move.

If you have any questions along the way please contact us at info@sellerpak.com or call us at 1-866-769-6616. We are always here to help.