Homeward bound – my house buying experience (Part II)

This is a continuation of my post from two weeks ago (Homeward bound – my adventures in house buying part I) about how I went from living with my folks to being a property-tax paying, home owner. In the first post, I covered how I came up with a livable budget, got pre-approved for a mortgage and found a realtor. In this post, I’m going to relive the horrors surprises of house hunting, putting in an offer and finding a lawyer.

4) House Hunting

Once I found my realtor, it was time to start looking at houses. Of course, buying a house had been on my mind for a while now, so you can bet that I had MLS bookmarked and was checking it like a rabid fangirl checks Justin Biebers twitter feed. MLS, or Multiple Listing Service (MLS.ca) allows you to search for properties listed with any real estate office. It’s probably the first place you should check out if your thinking about buying a home. When you do a search, usually the results are displayed on a map of the area you’re looking in. Ye be warned though, not all properties for sale will show up on the map, it seems that a lot of realtors have difficulty putting in the correct geographic location of some of the homes they are trying to sell. For instance, I searched for one place I knew was for sale and ended up finding it mapped to Northern Ontario. For this reason, it’s good to check out realtors websites and actually take a drive around where ever it is you’re looking for a home. Often, I found houses for sale that hadn’t been listed on MLS yet.

I made a list of all the places I wanted to see that were in my budget. I made myself promise that I wouldn’t look at any places outside my budget (even the pictures on MLS), because there’s no sense in falling in love with something you can’t afford. Once I had my list, I gave it to my realtor to set up times we could go for a tour of the property. When I toured a home, I brought along a notebook, easy to get on and off shoes, a flashlight, and my parents. My Dad has a good grasp of a number of trades (carpentry, plumbing etc.,) along with a keen eye for detail, so I knew he’d be really helpful in weeding out those houses that look ok on the outside, but have a shoddy skeleton. I brought my Mom along because she is a voice of reason. I highly recommend having someone come along with you when you look at houses, you can’t go wrong with another set of eyes on potentially the biggest investment of your life.

In total, I toured about 14 homes, many of which were immediate no’s. Most of my no places were too small, too poorly maintained, one was brand new but about six feet lower than the neighbouring properties, or they were old cottages with a little extra insulation and re-labelled a house. I went back to two homes for second tours. The second tour through the places, we really took our time and were as thorough as possible, we crawled into crawlspaces, were up in attics, and really examined the house. We also asked my realtor to bring information on the monthly utility bills including heating costs and hydro. My advice here is don’t be afraid to nosy, when we crawled into basement of one place (through the floor of the walk in closet), we found that a floor joist was missing from underneath the entire length of the house.

The other place I toured a second time, didn’t seem to have any major structural problems. I viewed it for a second time on a Thursday, and thought about the house all weekend. By Monday, I had made my decision. It was time to put in a offer.

5) Putting in an offer.

I called my realtor and set an appointment to go over putting in an offer. Of course, I was nervous, but I had my offer price firmly in my head, the knowledge that the buyer was looking to sell quickly (due to a sudden job transfer) and that there were a couple other people seriously looking at the house. The first thing that the realtor and I went through was an agreement between myself and my realtor. My realtor was also the listing agent of the house I was going to put an offer on, so the agreement basically stipulated that he was acting as a neutral party between myself and the buyer and would not offer one party information (like the highest amount I would be willing to pay) and visa versa. The agreement also set out who pays the realtor’s fees, which was 4% of the selling price. In my case, the seller paid the realtor fees; however, if I had gone off and suddenly bought a house privately, I would be on at the hook to pay 1.5% of the selling price to the realtor. This was in the fine print of the agreement, but I didn’t have a problem with it because I knew I wasn’t going to run off and buy privately at this point.

Next, we went over the conditional offer. I made the offer conditional on a number of items which, if weren’t to my liking, would let me back out of the deal. Here’s what my conditions were:

  • the findings of a home inspection
  • me being able to get a mortgage
  • the wood stove passing a WETT (wood energy technology transfer) inspection
  • a septic system inspection
  • being able to get insurance for the home
  • and being able to have one last walk through of the home

The offer also listed the chattels included in the sale – things that will be staying with the house essentially. For me, the chattels included all the appliances, window covers, light fixtures, ceiling fans, the water softener and the wood stove. The offer also lists any rental equipment (usually propane tanks, water heaters and the like) – something you may want to make note of because you’re responsible for assuming the rental contract.

My conditional offer also stated my offer price (obviously) as well as what amount I was setting aside as a deposit and when that deposit could be accessed. Usually, according to my realtor, deposits are either $500 or $1000, and usually a cheque in-trust to the real estate office. The offer also stated the deadline for a title search, which is usually completed by the buyer’s lawyer.

I sat and read the entire offer, asking my realtor questions when I didn’t understand something. Once I’d gone through it, my realtor asked how much time I’d like to give the seller to think about the offer. I said 48 hours, which I think is pretty typical and signed my name, multiple times, on the dotted line. After signing all the papers, I headed for home to wait to hear back whether my offer was accepted or not. Two hours later, my realtor called and told me my offer had been accepted!

HolygeezlouisewhatthehelldoIdonow!?!

The answer? Get a lawyer.

6) Getting some legal support

Before starting this, I had no experience with lawyers whatsoever. I was pretty intimidated by the thought of having to go find a lawyer, and really didn’t know where to start. I’d heard a lot of bad things about the lawyers in the nearest town, from a legal assistant my Dad works with, so I decided to look for a lawyer in the town that I work with. The town that I work in is the home of the county court, so there is no shortage of lawyers to choose from. I had a list of lawyers and no idea where to start. Thankfully, I had a coworker who just bought a house. I asked him what lawyer he used, and he gave me a glowing reference of their lawyer. I asked another coworker, who mentioned the same lawyer with equally high praise, so I gave that lawyer a call. I gave him the details of the sale, including the deadline for the title search, and he agreed to take care of my legal stuff. I asked for a ballpark price, and he was hesitant to give me one, but I coaxed him enough that he finally did, he guessed about 800 dollars. That sounded reasonable to me, so I made copies of all the papers from the realtor and took them over to his office. If you can get a lawyer within walking distance from your workplace, do it! It’s so very handy. Before I went to meet the lawyer, I knew he was young – thanks to my coworker’s review – but my coworker failed to mention that the lawyer was also pretty easy on the eyes. Bonus for me! We met, and he gave me a list of to-do’s (while I tried not to sigh every time he took his glasses on and off >.<).

Next up, the nitty-gritty: home inspections, signing the mortgage agreement, insurance and taking possession.

Have a good ‘un

Country Girl

 

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Categories: Uncategorized | 4 Comments

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4 thoughts on “Homeward bound – my house buying experience (Part II)

  1. I work for a bank and I do mortgage loans. It is much different here in the States. The mortgage loan officer really facilitates everything. We order the appraisal and title work. Will you have to have an appraisal? I will stay tuned. Congrats on the house purchase!

    • Thanks! I didn’t have to pay for an appraisal, I just had to bring a copy of the listing to the bank. From there, we came to an agreement that an appraisal wasn’t necessary.

  2. Congrats again, and thanks for such a thorough step-by-step!

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