I have no idea what I'm doing...

[mousme]

So... when contemplating buying a house, complete with mortgage and property and... gah!

I can figure out the main things (talk to the bank, possibly a mortgage broker, get the property and building inspected), but are there any pitfalls I should look out for?

I'm looking for advice from people who have done the homeowner/buyer thing.

Thanks!

Comments

[joane.livejournal.com]

Fact-finding mission: For rural property - find out about the septic system, how old it is, what kind of maintenance it needs... see if you can dig up what the property taxes are on the property right now, if you'll have to pay for garbage removal on your own, that kind of thing.

Also, how long has this place been on the market, and if it's been a while, can you find out why it hasn't sold? (If it was a grow-op, for instance, there's likely to be mould everywhere.) How old is the furnace/water heater, and when was it last inspected? Will they, or the roof, need to be replaced soon?

Can you get phone/internet (my grandmother's northern Ontario camp was on a party phone line with six other families until about ten years ago)? Is there a long drive/road connected to the land, and do you have to pay for snow clearing yourself, or is it within town lines and under a tax-paid service contract?

I suggest reading through chunks of this thread - you can do a search for parts of the discussion that deal with rural properties. There's a metric fuckton of good advice there, though the finance/legal discussions tend to be US-centric.

[chasingthenuns.livejournal.com]

i don't know about in canada, but in the u.s. the housing inspector will be able to tell you about mold, how old the furnace/water heat is, the roof, if it's structurally sound etc. but, i totally concur with all of her questions.

[ajpursell.livejournal.com]

Insurance.

Closing costs.

Contingencies.

A fund for home improvements/maintenance.

While I'm not an agent, I do work with them and I've learned a few things. Mostly find an agent you trust and will want to work with, a good one will be able to guide you along the way. Also, I am in San Francisco, so not too sure on the differences in laws and such.

Good luck, buying a home is easily the most stressful thing short of death/new baby.

[silly-imp.livejournal.com]

Does the property have a real estate agent that's selling it or is it a sale by owner?

If it's an agent, contact the agent to get the ball rolling there. Aks the agent how much the property costs and what the annual taxes are. The agent will probably want to see a pre-approved mortgage before he or she will take you seriously. To do this go to the bank.

At your bank make an appointment with a mortgage specialist. Be prepared to tell them what you owe and what you own. You will need to bring with you any documents pertaining to loans (including car, furniture, credit cards, overdraft etc...), employment income(pay stubs), and assets (if you own anything of value).

The bank will do calculations and come up with an amount that they will be willing to load you. Once they've done the credit check (although this will vary from bank to bank), they will give you a pre-approved mortagage certificate for this amount.

Those two steps will get the ball rolling and at least you can see how much the bank is willing to lend you and if you have marks on your credit history.

If your pre-approved mortgage is greater than what they are asking for the property you can go through the hoops of putting an offer on the property and getting inspections done.

If you can't get a mortgage or a big enough mortgage, consider getting friends together to form a co-op to buy the land. That's what P did up north with some his neighbours when they wanted to buy a piece of land with a swimming hole.

Good luck.

[chasingthenuns.livejournal.com]

if you end up making an offer, always put in there that the sale is contingent upon the housing inspection. i'm not sure how canada works, but in the u.s. you need that. because of that we ended up being able to bargain on our house. there was a structural issue with the house and we told them that we wouldn't buy it unless it was fixed before the closing date. they fixed it (we were the only offer they had on the house). also in the u.s. there's a sheet the current owner fills out that will say if the owner knows of anything wrong with the house. the agent should have that and it's always good to look it over. we got one before we put an offer on the house.

[talyesin.livejournal.com]

I have a copy of the Idiot's Guide to Buying and Selling a House in Canada I could loan you.

[mousme.livejournal.com]

Oh, please! I would *love* to read it. In fact, if I like it I may well end up buying my own copy. Are you going to Mackayhotep's party? If so, would you mind bringing it with you then?

[talyesin.livejournal.com]

But of course! And not at all!

In that order!

[talyesin.livejournal.com]

Also, go have a look at mls.ca and search around for potential properties. It'll give you an idea of the sort of things you'll be looking at, and moreover, crystallize the things you're looking for.

[pasley.livejournal.com]

Um. . . could we borrow that book after mousme is through with it?

[talyesin.livejournal.com]

Naturally. :)

[bodhifox.livejournal.com]

As fearsclave related regarding his experience with law, I'd give you my advice, but my 12 years working in real estate title is useless, as we're the Wild West down here. I can help you in Ohio, but you'd never, ever want to live here.

[taxlady.livejournal.com]

Back in 1989, when I bought a house (a duplex with a tenant), I had the services of real estate agent who was a friend.

We didn't have enough down payment, so we asked for, and got, a balance of sale (2nd mortgage from the seller). That meant that the seller got to choose the notary.

We made an offer contingent on getting a mortgage and on an inspection. We gave a $1,000 certified cheque with the offer. The offer was good for three days. The seller counter offered and we accepted.

Then we got the house inspected and walked around with the inspector. ~$300

We had to get a surveyor to survey the land and write a certificate of localisation. Can't remember how much, a few hundred dollars.

The bank wanted their appraiser to appraise the house ~$200. He only looked at the outside, so no appointment was necessary. He appraised it at "the selling price or more".

We got approved for the mortgage (they hadn't wanted to do the pre-approved mortgage, but I think that is more common now).

We got insurance. It is required by the bank, but we would have gotten it anyways.

A date was decided for the transfer of ownership.

We got together with the notary and our real estate agent and the seller and her real estate agent. There were all kinds of adjustments for property taxes already paid, rent already collected, and probably some other stuff. Money was paid. Papers were signed, we got the keys. The notary handled getting the mortgage money from the bank.

After we had been there for a while, we got a tax bill for transfer of ownership, commonly known in Quebec as the "Welcome Tax". I think it is about 1% of the value of the house.

[whiskeygirl8.livejournal.com]

I have no advice. I just want to make a request. When you get done, will you please come help me? The thought of going through all that scares the crap out of me.

[rosy1.livejournal.com]

Check out first home buyers incentives. Like borrowing from your RRSP or even if you don't have one, doing it retroactively.

This site has info on it for Ontario:
http://www.househuntingintoronto.com/buying/firsttime.htm#landtransfertax

Also, know that you have a certain amount of leverage if the person selling wishes to close the deal quickly since a lot of people buy a house on the condition that they sell their own home first.

I was able to go in with a lower offer on my current house because I had the money approved and told the seller...we can wrap this up this week.

Don't scrimp on your house inspector. A good house inspector will not only tell you what work will be needed to be done immediately and down the road, he/she can also work with you to come up with ballpark figures of the cost of repairs that you can negotiate down from the asking price.

Also, most people are somewhat naive about what owning a house costs. You have to have an emergency fund at all times for repairs, need to budget for taxes and all houses, especially older ones need constant upkeep.

Most people will also not tell you about buyer's remorse. It's inevitable. Once you purchase, you wake up at night, sweating and breathing heavy and thinking you made the worst mistake of your life even though you were completely driven to buy it. This too passes.

[le-maistre-e.livejournal.com]

Hi. OK so about 3 years ago I was in exactly the same position as you are right now. I mean exactly right down to the later posts you have made up to and including 23:30 Sept 4th 2007.

Call me and we'll do coffee. 514-543-5383. Seriously, 'cause I now own a duplex in St Henri and I love it.

[mousme.livejournal.com]

Yay!

Erm, what times are good to call you? I work afternoons and evenings up until 11pm, which means I get most of my calls done during the morning. However, I know most civilized people work 9 to 5-ish jobs.

Are you available by phone in the mornings? Otherwise, what's a good time to call?