Buying & Selling

New vs. Resale

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Should you buy a brand new home that you can customize, or shoose one that's move-in ready? Both have their advantages:

New Home

Personalized choices. You may be able to upgrade or choose certain items such as siding, flooring, cabinets, plumbing and electrical fixtures.

Up-to-date with the latest codes/standards. The latest building codes, electrical and energy-efficiency standards will be applied.

Maintenance costs. Lower maintenance costs because everything is new and many items are covered by a warranty.

Builder warranty. A homebuilder's warranty is usually available in all provinces (except Nunavut and the Northwest Territories). This can be important if a major system such as plumbing or heating breaks down. This warranty does not apply if you build the home yourself. Neighbourhood amenities like schools, shopping malls and other services may not be complete for years.

Taxes. Such as the Goods and Services Tax (GST) will apply. However, you may qualify for a rebate of part of the GST or HST on homes that cost less than $450,000. For more information about the GST New Housing Rebate program, visit the Canada Revenue Agency website at, http://www.cra-arc.gc.ca.

Extra costs. You may have to pay extra if you want to add a fireplace, plant trees and sod, or pave your driveway. Make sure you know exactly what's included in the price of your home.

Resale Home

Easy access to services. Probably established in a neighbourhood with schools, shopping malls and other services.

Extras included. Landscaping...
Landscaping is usually done and fencing installed. Previously owned homes may have extras like fireplaces, finished basements or swimming pools.

No GST/HST. You don't have to pay the GST/HST unless the house has been renovated substantially, and then the taxes are applied as if it were a new house.

Possible redecorating and renovations. You may need to redecorate, renovate or do major repairs such as replacing the roof, windows and doors.

Make An Offer

When you find the perfect home, buy it.

After touring homes, you will probably instinctively know which one or two homes you would like to buy. Ask to see them again. You will see them with different eyes and notice elements that were overlooked the first go-around.

At this point, your RE/MAX agent should call the listing agent to find out more about the sellers' motivation and to double-check that an offer hasn't come in, making sure these homes are still available to purchase.

Your RE/MAX agent will help you through the offer process. Be very specific in your offer about any improvements or repairs you want the seller to make before closing or about any appliances or other items you expect to be included.

Counteroffer. The seller may accept your initial offer, no questions asked, but often he or she will make a counteroffer, accepting some terms but making changes or raising the price. This process goes back and forth until you either agree or the deal collapses.

Contingencies. Acceptance of the sales contract can be made contingent on (that is, dependent on) certain circumstances. As a first-time homebuyer, you should probably stipulate that the house passes any inspections you want performed and that financing is approved.

Money Saving Tips

Shop for a mortgage. That ½ percentage point may not seem like much but it will save you thousands over the life of a mortgage. Get quotes from a variety of banks or enlist a mortgage broker (the bank, not you, pays his or her fee). You can always go to your own bank to see if they will match the rate.

Shop for a lawyer. Fees may vary greatly and you can often save a lot by using someone who specializes in real estate law, as they compete for this business. Costs are often less due to economies of scale, but ensure you get a full cost quote.

Get a home inspection. Not only for piece of mind but there is nothing worse than discovering cost prohibitive problems after you have moved in. If your home inspector identifies deficiencies, you may be able to renegotiate the purchase price to cover required repairs.

Decline mortgage insurance. You are farther ahead to increase your own term insurance for the amount of the mortgage. The premiums are often less and the payout greater.

Buy a home that produces revenue. If you can rent out your basement or a self contained suite it will help you pay the mortgage or offset your home expenses. Your RE/MAX sales associate can offer advise when it comes to zoning requirements and public transportation access.

Shop and get quotes on all of your major expenses including moving costs, renovations, home insurance etc. Ask lots of questions and get referrals. Your RE/MAX sales associate is a great resource.

Don’t buy your furniture on time payment plans. Make do until you can afford it. Shop garage sales or used furniture outlets.

Make a budget and stick to it. There are a number of costs that you need to take into account as we have illustrated. Put the money aside.

Remember, all of the above will save you money but the most important consideration is to buy a home you can afford to live in.

What Advice, Ideas & Tips

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Every year, hundreds of thousands of homes of every style, shape and size are bought and sold across this country. In spite of all the differences, many of them have one very important thing in common: a RE/MAX Professional who is the driving force behind the transaction. RE/MAX agents buy and sell more homes in your area than anybody.

When you choose RE/MAX you are choosing the combined experience we have gained from every deal we've completed. This experience and expertise ensures that you get the best possible price.

RE/MAX has done extensive research with homeowners, to better understand what makes them tick. This enables us to help you in many ways. First, knowing your preferences is invaluable when it comes to finding that perfect home. Open concept or traditional? Lofty or intimate?

As a home owner, you are likely to re-sell at some point and should consider the benefits of the neighbourhood. Remember, choices you make regarding improvements or renovations can drastically influence your home's market value.

LANDSCAPING

IT ALL STARTS AT THE CURB Everyone knows the value of a first impression. But RE/MAX has learned that landscaping the front and backyard of your home will give you a 7% better return on your renovating dollar over the average return on other popular renos you might consider.

Increasing your curb appeal can be as simple as adding containers of brightly coloured flowers. Another idea would be to add a low maintenance garden for blocks of colour and texture. Also, consider a simple water fixture in the back yard to add ambiance.

 

KITCHEN

THE KITCHEN IS THE HUB

Ever wonder why "kitchen parties" naturally occur every time you have guests?

Well, it's because the kitchen is the hub of every home. It's where we get nourishment, refreshment, gather and regroup after a busy day. It is a room with real value for every family. At RE/MAX we've learned that kitchen upgrades can really deliver, with a 44% higher return on investment over the average return on other popular renos you might consider.

Whether you're working with a contemporary kitchen or more of a country feel, stainless steel appliances continue to hold a lot of interest. In cabinetry, look at fine-grained maple, stained or natural, over the traditional heavy oak look of the past. Laminates and marble are great choices for countertops, but granite continues to be the most popular surface of all. Check out the latest fixtures in today's new, brushed nickel finishes.

FIREPLACE

REKINDLE YOUR PASSION FOR LIVING

Nothing beats the feeling of curling up around a fire on a cold winter's night. Not to mention the comforting feeling of hearth and home that a fireplace adds to a room.

The RE/MAX Return on Reno Index will tell you that installing or upgrading the fireplace in your home will generate 11% greater return on investment than the average return on other popular renos you might consider.

Gas fireplaces have made huge advances in popularity thanks to recent increases in efficiency as well as advances in design. A gas fireplace delivers the best of both worlds - all the comfort without the mess and maintenance.

BATHROOMS

DISAPPEAR IN YOUR PERSONAL SPA
Today's stress-filled world leaves us all crying out for rest and relaxation. RE/MAX knows that making your bathroom the best it can be will generate a 56% better return on investment than the average renovation.

The goal should be to create a spa-like environment in your bathroom by installing a soaker tub with relaxing jets, or perhaps a new steam shower stall.

GREAT IDEAS UNDERFOOT

Great looking floors are a strong feature of any home. It often makes all the difference. With RE/MAX, we'll show you how this upgrade can generate a 22% better return on investment than the average.

Start by ripping out that dated wall-to-wall carpet. Then, sand your existing floors down and refinish them, or choose one of the many easy-to-install and affordable laminates now available. A darker stain gives an elegant, yet up to date look. Use area rugs to accent and ground the space.

Buying Costs

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In preparing to buy your first home, you need to budget for expenses that will be incurred up-front in the process including:

Deposit. This is part of your down payment and must be paid when you make an Offer to Purchase. Deposits are usually around 1% but can be as high as 5% of the purchase price depending on the area. Sellers may request that the deposit be increased once all conditions have been satisfied.

Down Payment. At least 5% of the purchase price is usually required for a high-ratio mortgage and at least 20% of the purchase price is usually required for a conventional mortgage.

Mortgage Loan Insurance Premium. If yours is a high ratio mortgage (less than 20% down payment), you may need mortgage loan insurance. To get this insurance, you will be asked to pay the required insurance premium. Your lender may add the mortgage insurance premium to your mortgage or you can pay it in full upon closing. Mortgage loan insurance helps protects lenders against mortgage default, and enables consumers to purchase homes with a smaller down-payment — with interest rates comparable to those with a 20% down payment.

CMHC Mortgage Loan Insurance. The amount of the premium varies and can range between 0.65% and 2.75% depending upon how much of the purchase price/home value is financed with a mortgage loan.

Appraisal Fee. Your mortgage lender may require the property be appraised at your expense. An appraisal is an estimate of the value of the home. The cost is usually between $250 and $350 and must be paid when you contract for those services. Some banks will waive this fee in return for your mortgage which is another reason to shop around.

Home Inspection Fee. A satisfactory home inspection is often an important condition of the Offer to Purchase. A home inspection is a report on the condition of the home and generally ranges around $500, depending on the complexities of the inspection. Larger or older homes may cost more, especially if there is any suspicion of latent defects.

Land Transfer Tax. You have to pay this provincial tax upon closing. The cost is a percentage of the property's purchase price and varies by province. Use our calculator on www.remax-western.ca

Prepaid Property Taxes To reimburse the vendor for pre-paid costs (if any).

Property Insurance. The mortgage lender requires this because the home is security for the mortgage. This insurance covers the cost of replacing the structure of your home and its contents. Property insurance must be in place on closing day.

Survey or Certificate of Location Cost. The mortgage lender may ask for an up-to-date survey or certificate of location prior to finalizing the mortgage loan. If the seller does not have one or does not agree to get one, you will have to pay for it yourself.

Water Quality Inspection. If the property has a well, you will want to have the quality of the water tested to ensure that the water supply is adequate and the water is potable. This should be a condition on your Offer to Purchase.

Legal Fees and Disbursements. Must be paid upon closing and cost a minimum of $500 (plus GST).Your lawyer will also bill you for any disbursements they incur such as land titles costs to check on the legal status of the purchased property.

Title Insurance. Title insurance covers loss caused by defects of title to the property and may be recommended by your lawyer.

 

Costs After Possession:

Appliances. Check to see what comes with the house, if anything.
Gardening equipment.
Snow-clearing equipment.

Window treatments. Check to see what comes with the house.
Decorating materials. Paint, wallpaper, flooring and tools for redecorating.
Hand tools. You will need some basic hand tools for your new home.

Dehumidifier. May be required to control moisture levels, especially in older homes.
Moving Expenses including van rental and boxes

Service Hook-Up Fees. Charged for utilities. You may be required to pay a deposit for utilities such as telephone and heating services.

Condominium Fees. You may have to make the initial payment for these monthly fees.
Homeowner's association fees. Some subdivisions have an annual or monthly fee to maintain recreation facilities.

Repairs, upgrades, renovations. Depending on the condition of the home you buy, remember to budget for the work it will take to make it move-in ready.

Household items. As a first time buyer you may need any number of household items such as trash cans and shower curtains.

Home Staging Tips

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TOP 10 TIPS TO SUCCESSFUL HOME STAGING!

Preparing your house for selling can be a daunting and overwhelming task whether you have lived in your home a few years or many. The longer you have lived in your home the more things you will have acquired. The intent of this Top 10 Tips for Successful Home Staging is to help you save TIME, MONEY and ENERGY.

In preparing your house for selling you need to take a step back and have the mind set that this is no longer your home but your investment for your future. You want your home to have broad buyer appeal to your target market. Following these 10 Tips for Successful Home Staging will help you sell your house sooner and possibly for more money than if you did not prepare it for selling! Remember most people want to move into their new home without having to make updates to it.

1. Curb Appeal

Stand back and view your home as if you were seeing it for the first time. This is the ‘first impression’ stage. Depending on the season you may want to have pots of colourful and attractive flowers to greet buyers; a clean and inviting door mat; new and shiny door handles and/or knockers; a freshly painted door.

2. Declutter

Start your pre-pack as soon as possible. You need to decide what you are going to keep, give away, sell or throw away/recycle. Many clients will rent storage lockers or have pods delivered so they can start to clear out what is not going to make the house look good.

3. Clean

You would think this one is common sense but let me assure you, I wish it was so! A clean home translates into ‘They must have really cared for their home.” Use environmentally friendly cleaners where you can, for hard cleaning areas tsp is a good product. Bathrooms and kitchens must be sparkling clean at the very least.

4. Depersonalize

We know you love your family photos and your personal treasures and for living they are perfect. For selling pack them up carefully so you can showcase them in your new home. For selling you want buyers to focus on the best features of your home and not your personal things or collections.

5. A neutral colour scheme is the way to go for selling.

Choose only 3 colours or less to paint your house for selling. If you have an open floor plan then paint the main floor all the same colour. Bedrooms look good in light sage greens or warm blues like the new aqua.

6. Highlight your home’s best architectural features

Place your furniture in each room so that you have very obvious focal points that show off the home’s best selling features. For example, if you have a beautiful fireplace then place the furniture in a parallel grouping so that the eye is drawn to the fireplace.

7. Decide on the function in each room

If you were using your guest bedroom as your den for living, for selling turn it back into a bedroom with bedroom furniture in it. If you do not have the right furniture for each room consider renting it. There are more and more rental furnishing companies opening up every day. If you don’t want to rent then borrow.

8. Lighting your home to its best advantage

Spend money on new light fixtures in brushed nickel or stainless steel. Brass is out so don’t fight it. There are many low-cost lighting stores to select from so no excuses for having dated light fixtures.

9. Window treatments that sell your home

The most popular on the market are the 2” faux woods in a white tone to go with your trim. Decorative side panels will do the trick if you need to add warmth and colour.

 

10. Flooring needs special attention and is a good investment for updating the look of your home

Tile or linoleum is great for entranceways, bathrooms, kitchens, laundry rooms; a good quality laminate or hardwood is perfect for living rooms and family rooms; bedrooms are attractive in a neutral carpet.

By planning and budgeting you can get yourself to the “OPEN HOUSE READY” stage.

Remember that over 79% of prospective buyers have already checked you out through the MLS listings. Will they like what they see?

Happy Selling!

Home Purchase Expenses

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There are many costs that homebuyers incur, especially upon purchasing your first home that you should expect to pay. Some of the expenses related to buying a home are one-time costs, while others are continuing costs.

Your largest cost at the beginning is your down payment. As a first time buyer, this would likely represent only 5 - 10% of the purchase price. However, you should be prepared to pay for additional costs, such as:

  • Legal Fees & Disbursements
  • GST and PST (if applicable)
  • Property or Land Transfer Tax
  • Adjustments (reimbursed to the vendor)
  • Interest
  • Property Taxes
  • Utility Payments
  • Strata or Condominium Fees
  • Estoppel certificate fee
  • Survey Fee
  • Home Inspection Fee
  • Water quality and quantity certificate
  • Appraisal Fee
  • Mortgage broker's fee (if applicable)
  • Mortgage Loan Insurance Premium (if less than 25% down)
  • Mortgage Loan Insurance Application Fee (if less than 25% down)
  • Moving Expenses
  • Renovations and repairs
  • Furniture, paint, carpeting, window coverings, etc.
  • Service and Utility Hook-up Fees
  • Property/Condominium Insurance
  • Mortgage Application Fee
  • Deed and/or Mortgage Registration Fee

Additionally, once you have purchased your home, you will incur regular expenses on a monthly, quarterly or yearly basis. Some of these costs include:

  • Mortgage Payment
  • Water and/or Sewer Payments
  • Electricity and Gas Services
  • Cable and Telephone Services
  • Property Taxes
  • Strata or Condo Fees
  • Repair/Maintenance Expenses
  • Homeowner's Insurance

Home Renovation Tips

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What Advice, Ideas & Tips

Every year, hundreds of thousands of homes of every style, shape and size are bought and sold across this country. In spite of all the differences, many of them have one very important thing in common: a RE/MAX Professional who is the driving force behind the transaction. RE/MAX agents buy and sell more homes in your area than anybody.

When you choose RE/MAX you are choosing the combined experience we have gained from every deal we've completed. This experience and expertise ensures that you get the best possible price.

RE/MAX has done extensive research with homeowners, to better understand what makes them tick. This enables us to help you in many ways. First, knowing your preferences is invaluable when it comes to finding that perfect home. Open concept or traditional? Lofty or intimate?

As a home owner, you are likely to re-sell at some point and should consider the benefits of the neighbourhood. Remember, choices you make regarding improvements or renovations can drastically influence your home's market value.


LANDSCAPING

IT ALL STARTS AT THE CURB Everyone knows the value of a first impression. But RE/MAX has learned that landscaping the front and backyard of your home will give you a 7% better return on your renovating dollar over the average return on other popular renos you might consider.

Increasing your curb appeal can be as simple as adding containers of brightly coloured flowers. Another idea would be to add a low maintenance garden for blocks of colour and texture. Also, consider a simple water fixture in the back yard to add ambiance.

 

KITCHEN

THE KITCHEN IS THE HUB

Ever wonder why "kitchen parties" naturally occur every time you have guests?

Well, it's because the kitchen is the hub of every home. It's where we get nourishment, refreshment, gather and regroup after a busy day. It is a room with real value for every family. At RE/MAX we've learned that kitchen upgrades can really deliver, with a 44% higher return on investment over the average return on other popular renos you might consider.

Whether you're working with a contemporary kitchen or more of a country feel, stainless steel appliances continue to hold a lot of interest. In cabinetry, look at fine-grained maple, stained or natural, over the traditional heavy oak look of the past. Laminates and marble are great choices for countertops, but granite continues to be the most popular surface of all. Check out the latest fixtures in today's new, brushed nickel finishes.

 

FIREPLACE

REKINDLE YOUR PASSION FOR LIVING

Nothing beats the feeling of curling up around a fire on a cold winter's night. Not to mention the comforting feeling of hearth and home that a fireplace adds to a room.

The RE/MAX Return on Reno Index will tell you that installing or upgrading the fireplace in your home will generate 11% greater return on investment than the average return on other popular renos you might consider.

Gas fireplaces have made huge advances in popularity thanks to recent increases in efficiency as well as advances in design. A gas fireplace delivers the best of both worlds - all the comfort without the maintenance.

 

BATHROOMS

DISAPPEAR IN YOUR PERSONAL SPA
Today's stress-filled world leaves us all crying out for rest and relaxation. RE/MAX knows that making your bathroom the best it can be will generate a 56% better return on investment than the average renovation.

The goal should be to create a spa-like environment in your bathroom by installing a soaker tub with relaxing jets, or perhaps a new steam shower stall.

GREAT IDEAS UNDERFOOT

Great looking floors are a strong feature of any home. It often makes all the difference. With RE/MAX, we'll show you how this upgrade can generate a 22% better return on investment than the average.

Start by ripping out that dated wall-to-wall carpet. Then, sand your existing floors down and refinish them, or choose one of the many easy-to-install and affordable laminates now available. A darker stain gives an elegant, yet up to date look. Use area rugs to accent and ground the space.

Search Process

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Once you figure out what you can afford to pay for a house and obtain a pre-qualified mortgage, you are ready to start your search. There are a variety of sources you can use to find the home that is right for you:

Begin on the Internet

With just a few clicks of the mouse, home buyers can search through hundreds of online listings, view virtual tours, and sort through dozens of photographs.

Check out real estate websites, such as http://www.remax.ca for information and pictures of a wide range of properties. This site allows you to narrow your search by location, price, number of bedrooms and other features.

The amount of information available online is large and growing. Refine your property search to specific features you want. Are you looking for a lake view? Pet friendly condo? Three car garage? When you physically view homes you have selected, it's just a validation process.

Take advantage of property match services provided by your RE/MAX agent. Email alerts will keep you abreast of the newest listings and eliminate the need to manually check the Web again and again for updates. These can also be sent to your Blackberry, cell phone or other device. RE/MAX market reports, how-tos and other information can give you the foundation for an informed online home search.

Newspapers and real estate magazines. Check the new homes section in daily newspapers or look for real estate magazines available at newsstands, convenience stores and other outlets. These free publications feature pictures and brief descriptions of a variety of homes.

Visit open houses and new home developments. You will learn a lot by getting out and seeing what is on the market.

Work with a RE/MAX agent. For most buyers, a real estate agent is key to finding the right home.

Your RE/MAX Agent

No one will play a more important role in helping you find a home than your RE/MAX agent. His or her job is to:

Help you find the ideal home.
Write an offer to purchase.
Negotiate on your behalf to help you get the best possible deal.
Provide you with important information about the community, arrange and coordinate the home inspection and essentially save you time, trouble and money.
Good real estate agents will listen to your wants and needs and arrange to show only those homes that fit your particular parameters. Bring a digital camera so you can look at photos later.

You will have a lot of questions that your RE/MAX agent can answer such as - how should I decide how much to offer for a home? How does the negotiation process work?

What Should You Buy?
Assessing your needs.  As you start searching for a home, you need to think about your needs both now and in the future. Here are some things to consider:

Types of homes

There are many types of homes to choose from and each has its advantages and disadvantages. Think about your needs before making a decision. Don't forget to look beyond the walls. The environment surrounding your home can be almost as important as the environment inside of it.

Single-family Detached

The most popular style and the most solid investment. It is a free-standing home which sits on its own lot thereby offering a greater degree of privacy.

Semi-detached

A single-family home that is joined to another one by a common wall. It can offer many of the advantages of a single-family detached home and is usually less expensive to buy and maintain.

Duplex

Two units — one above the other or side by side. The owner usually lives in one unit and rents the other.

Row House or Townhouse

One of several types of single-family homes joined by common walls. It offers less privacy than a single-family detached home but still provides a separate outdoor space. These homes can cost less to buy and maintain.

Manufactured Home

A factory-built single-family home that is transported to your chosen location and placed on a surface-mounted foundation. The term manufactured home has replaced the term "mobile home".

Modular Home

Also a factory-built home constructed in compliance with local building codes. The home is typically shipped to your location in two or more sections. It may or may not have a longitudinal sub-frame.

Condominium

Refers to a form of legal ownership as opposed to a style of construction. Condominiums can be high-rise residential buildings, townhouse complexes, individual houses and low-rise residential buildings. Condominiums are also known as stratas in British Columbia.

Condo Buyers Guide

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Should I Buy a Condo?

As single family home prices have risen, many consumers have been looking to condominiums as an alternative. First time buyers like the lower prices, which makes entry into the real estate ownership market easier. Seniors like the low maintenance aspect and the ability to be in a community catering to their lifestyle. Others like the security advantages that the building provides, especially for those who travel frequently.

Condo Concept

When you purchase a condominium, you purchase and have title to your individual unit in a multi-unit property, and share in the ownership of the land and other common property with all the other unit owners.  The type of common property varies depending on the type of condominium - high rise or townhouse for example - and would include hallways, elevators, heating system, parking structures, landscaped areas, recreation areas etc.

A condominium is a specific form of ownership and does not describe a type of building.

One of the great advantages to owning a condominium is that in most cases, it is owner-occupied and owner run.  Owners ensure their investment is maintained and regard improvements as an investment which increases the value of their individual unit.

Advantages and Disadvantages of Condo Ownership

If a winter holiday is part of your lifestyle, you can leave with your mind at ease, without the worry of a driveway to clear. In the summer the grass will be cut, you won't have any exterior painting projects or fence repairs to look after.

Condo projects are now part of most communities which means being able to stay in the same location where you were a homeowner.  Some condo projects are more successful than others in terms of capital appreciation and length of time to sell. Here are some of the advantages and disadvantages of condo ownership:


Advantages

protection from rent increases
monthly cost of owning is often less than renting
easy financing
wide range of property types, prices, locations, sizes and amenities available
availability of amenities such as swimming pool, tennis courts, hot tubs, saunas, whirlpools, exercise facilities, health spas, sun decks, community rooms (the cost of which may otherwise not be affordable)
you are investing in your own home and build equity
appreciation of capital value
pride of ownership
freedom to make interior changes and enhancements to your unit
enhanced security availability and peace of mind when leaving unit unattended
maintenance and upkeep is kept down or eliminated
security of tenure and permanent occupancy
cost is often less than single family home due to efficient use of land and economies of scale
very marketable
wide range of prices depending on features, luxury and location
sense of community due to permanence of residents and resulting social activity
developments available geared to a specific lifestyle (restrictions on age, pets, children etc.)
participation of owners in operation of development including budgeting, decision making, determination of rules and by-laws.

Disadvantages

some loss of freedom may be experienced due to rules and by-laws e.g. type of pets allowed, right to rent unit etc.
due to a larger concentration of people you may experience problems with the "5  p's”, pets, parties, parking, personality and people.
money is tied up in equity
you may be paying for some amenities you never use
boards of directors vary in terms of skill and effectiveness

What You Need To Know

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Common Element Fees

As a unit owner you will be responsible for your share of expenses known as common element fees or common expenses. These are set out in the condo declaration. It describes what expenses are to be shared and in what proportion. This can be equal or unequal in cases where they are based on the comparative size of the units.

The exterior and common area maintenance of your condo is covered by your common element fee. The fees are usually paid monthly in accordance with the budgeted expenses. Of course if your condo has more amenities such as a swimming pool, on-site security personnel etc. your fees will reflect the extra services.

Reserve Fund

Reserve or contingency funds are set up by the condominium corporation to cover major or unexpected expenses. The developer of a new condominium usually sets up a fund which is then turned over to the condo corp. The fund becomes an asset of the corporation and each year the unit owners decide on what the level should be. The individual owner does not have any rights to the Reserve Fund.

Questions You Should Ask When Buying A Condo

Pricing

Is the unit competitively priced with others currently on the market?
Have you taken into account the amenities offered?
What is the resale potential?
Have the units appreciated?
Are other unit owners in your financial bracket? If higher they may vote for services you can not afford, if lower they may vote down changes you would like to see.

Condo Security

Security is a key factor in choosing a condominium. The type of security will vary depending on the type of condo you choose and special care must be taken to ensure it meets your lifestyle requirements. What security features exist or are planned - suite alarms, TV surveillance, controlled access? Here are the factors you should consider or the questions you should get answers to.

Doors - Are they solid wood or metal and equipped with dead-bolts and peepholes? Do patio doors have effective locks?

Parking - how is access controlled? Electronically?

Intercom - is there a good working system?

Lighting - is property well lit in all areas - hallways, parking, fire escapes entrances and exits?

Balconies - are they accessible from the ground or adjacent units?

Mailbox - are numbers different from apartment and parking spaces?

Alarms - is there wiring for home security alarms in every unit or suite?

If possible check on the condo’s record for break-ins and vandalism by asking local authorities or current residents.

Common Elements and Facilities

What amenities are offered, what are the hours of use, is there a separate cost?
What is common element fee and what is included? History of increases?
Are there any exclusive use common elements (reserved for one or more unit holders)?

Parking and Storage Facilities

What is included in the purchase? Some parking and storage may be separate and legally defined units you own, others are common property allocated to the owner and subject to reallocation by the Board, others are exclusive use elements designated for the use of a unit, pursuant to provisions in the Declaration.
What parking/storage is required and can you rent or buy additional spots/space?
Is there visitors parking available?

Quality of Construction

What types of materials were used in construction? Are the facilities in good condition? How old is the building?
Find out if the corporation has done a reserve fund study (estimate of the remaining life of the various components, cost of replacement, and contributions needed to ensure funds are available for anticipated repairs and replacements)
What is the reputation of the developer?

Design and Layout

Size of suite and rooms - adequate for furniture?
What exterior changes can you make?
Can you add solarium to balcony?

Owner Occupied vs. Tenants

How many units are owner occupied vs. tenant occupied? Is there a maximum? Are there rental policies and what are they?

Management/Appearance

Is project managed by a professional company, resident manager or self-managed?
How well has the building been maintained?
Does it fit your personality/lifestyle?

Restrictions

Ask your RE/MAX agent for the complete set of building rules and regulations. Are there any restrictions you require/don't want - pets, children, age, number of people per suite, carrying on business in a suite? Most condos have a long list of association rules and regulations by which you'll have to agree to abide if you purchase in the building. These rules may limit the number, type, and weight of pets; how many visitors you can have at any one time; how often - and for how long - you can rent out your unit (if at all); when and how you can reserve common facilities like the party room; when you can have work done in your unit; and, what day you can move.

Expenses

What will be your monthly operating cost?
Have there been any special assessments in the last two years and are any planned?
Which utilities are common and which are individually metered?
What are the property taxes?
What insurance do you need and what is covered by the corporation?

Ask to see the past two years worth of condo board meeting minutes, as well as the last two years' of budgets and the current year's projected budget. What are the owners concerns?
Are there any large-scale improvement projects planned? How much will they cost and how are they to be funded?
Has there been a review of the reserve fund to ensure it is adequate? Is the building fiscally responsible? Are any fees/owners in arrears?

New Condominiums

Check the reputation of the developer with people living in other projects they have done or project you are looking at.
What is the cost for set up of a reserve fund (one time up front fee)?
What are the landscaping plans?
What warranties are being offered - is the project covered by a New Home Warranty Program? What are the terms of this warranty? Contact the organization offering the warranty and find out exactly what is covered and what restrictions are involved. What specific timelines builders must work to and what dispute resolution services are offered? What clout does the warranty organization have with builders in settling a dispute?
How many elevators are there and how fast are they?
Are units wired for cable TV and telephone at the developers cost?
Does the corporation have a proposed operating budget? - If so, obrain a copy.

Before Writing an Offer

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Home Purchase Expenses

There are many costs that homebuyers incur, especially upon purchasing your first home. Some of the expenses related to buying a home are one-time costs, while others are continuing costs.

Your largest outlay is the down payment. As a first time buyer, this would likely represent only 5 - 10% of the purchase price. Be prepared to pay for additional costs, such as:
Legal Fees & Disbursements
GST and PST (if applicable)
Land Transfer Tax
Property taxes and adjustments (reimbursed to the vendor)
Interest on interim financing, if any
Utility Payments
Strata or Condominium Fees
Estoppel certificate fee
Survey Fee
Home Inspection Fee
Water quality and quantity certificate
Appraisal Fee
Mortgage broker's fee (if applicable)
Mortgage Loan Insurance Premium (if less than 20% down)
Mortgage Loan Insurance Application Fee (if less than 20% down)
Moving Expenses
Renovations and repairs
Furniture, paint, carpeting, window coverings, etc.
Service and Utility Hook-up Fees
Property/Condominium Insurance
Mortgage Application Fee
Deed and/or Mortgage Registration Fee
Additionally, once you have purchased your home, you will incur regular expenses on a monthly, quarterly or yearly basis. Some of these costs include:
Mortgage Payment
Water and/or Sewer Payments
Electricity and Gas Services
Cable, Telephone and Internet Services
Property Taxes
Strata or Condo Fees
Repair/Maintenance Expenses
Homeowner's Insurance

How to Make an Offer

When you have found a home you are interested in buying, your RE/MAX Sales Associate will walk you through the process of drafting an offer to purchase. Your sales associate will communicate the offer to the seller or the seller's real estate agent for you. Some properties are in demand and you will not be the only interested party making an offer. Your RE/MAX Sales Associate will assist you in generating an offer that is reasonable and protects your interests using specified terms and conditions.

An offer can be drafted with or without conditions; an offer without conditions is known as a firm offer and one with conditions is known as a conditional offer. A conditional offer represents the party with the placement of certain conditions on the purchase. Some of these conditions could be "subject to financing approval", "subject to the strata council allowing pets", "subject to the buyer's house selling", "subject to an approved home inspection", among many others.

The seller may accept your initial offer, reject your offer or present a counter-offer. The counter-offer may differ from your original offer in respect to price, conditions, the closing date or any other items. Offers can be countered back and forth between the parties until one of you accepts or rejects, ending the negotiations.

There are many components of an offer that you should be aware of and understand. Your RE/MAX Sales Associate will answer your questions and explain the entire process to you so that you are comfortable with the steps involved.

Terms

An offer includes certain "terms", which specify the total price offered and how the financing will be arranged, such as if you will arrange your own with a financial institution or mortgage broker or if you wish to take over the seller's mortgage (assumability).
Inclusions and Exclusions

These are specifications within the offer that detail the items to be included or excluded from the purchase of the property. Typical inclusions are appliances, window coverings, fixtures and decorative pieces.

Deposit

A deposit is provided from the buyer to the seller as a token of the buyer's assurance and intention to buy the property involved. The deposit is applied against the purchase price of the home once the sale has closed. Your RE/MAX Sales Associate can assist you in proposing a certain and appropriate amount for the deposit.

Conditions

Items that are usually put in place to protect a party's interests upon selling or buying the property and refer to things that must occur or be in place before the sale closes.

Closing Date

This is usually the date that the legal ownership of the property transfers from the seller to the buyer and, unless otherwise noted, when the funds for the purchase are concluded.

Possession Date

When the buyer takes possession as specified in contract oif purchase sale.

Purchase Price

This is the amount that the buyer is offering to pay for the property. The price is usually dependent on market conditions and may differ from the seller's current asking price.

Legal Needs

Purchasing a home involves a lot of paperwork, most of which are contractual documents that will legally bind you to the numerous terms and conditions. For this reason it is important to have a good lawyer or notary public acting for you. Someone to protect your rights and interests.

Finding a Lawyer/Notary Public

If you don't have a lawyer or notary public, you can look for a referral from friends, family or business acquaintances. Look for someone with real estate experience and discuss their fee scales. Your RE/MAX Sales Associate can help you locate a reliable professional, whom you feel comfortable working with.

Lawyer's/Notary Public's Function

You will need a lawyer or notary public to process your purchase and ensure the terms are met:

1. the correct property is purchased
2. transfered title to your name
3. ensureed title is free and clear of prior owners encumbrances
4. your mortgage is registered properly on title

The legal process varies from province to province within Canada. Specifically, you will need to consult with your chosen legal professional and he/she will explain the process and the steps that need to be completed before you get the keys to your new home.

Your lawyer/notary public will prepare a "Statement of Adjustments" outlining all the financial aspects of your sale.
Legal Fees and Disbursements

The difference between legal fees and disbursements is analogous to the parts and labour you pay when fixing your car. Your RE/MAX Sales Associate can help you locate a reliable professional, whom you feel comfortable working with.

Home Inspection

A home inspection is an objective visual examination of a home's structure and systems.


Why get a home inspection?

There are a number of reasons why RE/MAX recommends a home inspection including:
To ensure you are not surprised by major defects
So you can be advised about the various elements of the home including - heating and cooling systems, structure, electrical and plumbing
To learn about how the mechanical systems work and need to be maintained
Most homeowners are not expert in the numerous components of house construction
A third party can be objective as there is no emotional attachment


Who should you hire?

Home inspectors are often referred by family or friends. Your RE/MAX agent can also provide you with a list of inspectors. Look for one that is trained and certified by a national organization such as Canadian Association of Home Inspectors (CAHI) or National Institute of Building Inspectors (NIBI) and who has errors and omissions insurance. Do not hire someone who will do any suggested work due to the conflict of interest.

When should you call?

Order the inspection after your offer has been accepted. The contact will stipulate the length of time you have to complete the inspection.

What is involved?

The home inspection will determine the structural and mechanical soundness of the home. Your home inspector can identify existing and potential problem areas, suggest possible solutions and provide estimates for the cost of the work required. You will receive a report outlining the inspection findings. You should accompany the home inspector during the inspection or arrange to meet them at the home so they can walk you through the report. If as a result of the inspection, you have further concerns, have a specialist in that area conduct a more extensive examination.

What does it cost?

Costs vary depending on a number of factors including:

Size and location of the home, features, age, and services required. Additional services may include radon, septic and well testing. Your RE/MAX agent can assist you in obtaining a quote from a potential inspector before you enlist his/her services.

Mortgage Information

Mortgage lending is a highly competitive field. Information on mortgage rates, which can change daily, is available in local newspapers, through mortgage brokers, from individual lenders and of course through conventional financial institutions. When you are shopping for a loan, interest rates tell just part of the story. You will also need to study the various fees lenders charge and many mortgages today are almost custom-tailored to individual needs with many options available.


Ask your Agent

Your RE/MAX real estate professional can recommend lenders to check with prior to beginning any serious house hunting so you will know exactly what you can afford.

For further information, please contact a mortgage broker in your area or TD Canada Trust at http://www.tdcanadatrust.com/ [1]

RE/MAX Advantage

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RE/MAX Premier Market Presence

Premier Quality Professionals

RE/MAX professionals lead the industry in terms of experience, education and sales. In Western Canada, they average about 16 years of experience, and across the network, hold a higher number of professional designations than associates of any single competitor.

Premier Brand Name Awareness

The RE/MAX hot air balloon trademark is one of the most widely recognized trademarks in North American business and is now a global brand. No other real estate organization has the level of brand recognition and definition of RE/MAX. The brand draws buyers and sellers and as a result no one in the world sells more real estate than RE/MAX.

Premier Customer Satisfaction

Repeat and referral clients are the lifeblood of the real estate business. Approximately 70% of RE/MAX business comes from repeat and referral clients, a testimonial to the high caliber of service RE/MAX customers have come to expect from their Sales Associates.

A survey completed by RE/MAX found that 95% of RE/MAX customers report overall satisfaction with their RE/MAX Sales Associate, 92% say they will use RE/MAX again and 93% will recommend RE/MAX to others. This is, by far, the highest rating in the real estate business.

Premier Community Citizenship

RE/MAX is a front-runner in terms of giving back to the community, often devoting endless support to countless charities and local causes. The RE/MAX sponsorship of Children's Miracle Network is a great example of RE/MAX community citizenship. Since 1992, RE/MAX has been a major contributor to the Children's Miracle Network; a North American fund-raising organization dedicated to generating funds and awareness programs for the benefit of Children served by its over 170 associated hospitals. RE/MAX across Canada raises over $4 million annually on behalf of 14 Canadian children's hospital foundations.

As well, RE/MAX of Western Canada created the "Quest for Excellence Program". This bursary program was established to recognize the success and on-going pursuits of Western Canadian students. A "Quest for Excellence" involves any student in Grade 12 who demonstrates passion, commitment and dedication, positive attitude and enthusiasm for on of the 6 categories. RE/MAX presents 24 cash bursaries of $500 each. The categories are Leadership, Sports, Technology and Trades, Fine Arts, Performing Arts and Community Service. RE/MAX is proud to recognize students, in the very communities in which we live and work, for their outstanding achievements. Education is the building block of our future and if the children we hear from every day are any indication, our future has never been brighter.

RE/MAX is committed to help raise awareness of the ongoing need for organ donation. CA of T assists Canadians in making informed decisions regarding organ, tissue and bone marrow donation. The www.transplant.ca site provides some national information regarding organ and tissue donation, but more importantly acts as a portal to the many provincial organizations that are mandated to oversee organ and tissue donation programs across the country.

Yard Sale for the Cure

As a national presenting sponsor of Yard Sale for the Cure, RE/MAX associates support the need to raise funds to find a cure for breast cancer. This one-day event, held the last Saturday each May, is dedicated to hosting yard sales accross the country, with the proceeds going towards breast cancer research and treatment.

Premier Market Share

In large part, our community minded top producers who provide industry leadership, experience and excellent customer service under a respected company banner add up to leading market share. RE/MAX dominates virtually every market in Canada, in terms of market share. On average, RE/MAX outsells the competition 3 to1 across Canada. RE/MAX is supported by over 35 years of brand name development, referral services, promotional support and other benefits that today are an integral part of the RE/MAX network of over 100,000 Sales Associates in over 7,000 offices in 65 countries worldwide. RE/MAX has the network to provide the best real estate experience throughout the world.

6 Mistakes Buyers Make

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Mistake #1.  Not Getting Pre-Qualified

Before looking for your next home take the time to get pre-qualified by the bank or mortgage broker you choose.  This can save you hours of searching for homes in the wrong price range or worse, purchasing a home and then finding out you don’t qualify for financing.  Pre-qualifying gives you peace of mind, helps narrow your search criteria and most importantly, gives your RE/MAX agent a negotiating edge by being able to alleviate the sellers concern over financing. The latter is especially important should a competing offer surface.

Mistake #2.  Not Shopping For Mortgage Terms

Rates are negotiable! Banks will sharpen their pencils to get your business especially if you have a good credit rating and bring other business to them e.g. RRSP’s, general account, savings etc. Posted rates should viewed as a starting point. You need to know what the best rate is and this is usually done by get competitive quotes. Also, ask whether the bank will cover appraisal fees, and about buy-out fees, penalties, payment options, portability etc.  The time spent can save you thousands of dollars over the life of the mortgage.

Mistake #3.  Not Getting Professional Inspections

Nobody wants to purchase a home only to find out later there are defects, latent or otherwise.  Ensure you obtain inspections where needed e.g. home inspection, structural engineer, insect, radon etc.  If the inspection identifies deficiencies you may be able to negotiate the purchase price to cover required repairs or make your satisfaction of the inspection subject to the homeowner remedying the problem. Your RE/MAX agent can advise you on inspections you should consider.

Mistake #4.  Not Using A Professional Agent.

Your RE/MAX agent can help you make a purchase with the least amount of problems.  He or she can ensure the price you pay is market value.  They can offer expert advice on what to look for, conditions to include, negotiation strategy etc. After all, they work for you.

Mistake #5.  Buying First Before Selling

If price is important you should always sell your present home before buying another.  It has the advantage in letting you know exactly how much money you will have available for your next purchase.  Selling your home first allows you to place fewer conditions on your purchase which makes your offer more attractive to a seller.  They often will demand more money to take a “subject to” offer which takes their home off the market.  The other advantage is if you find a terrific house, chances are others will also find it attractive and you stand to lose it if you can’t make an unconditional offer.

Mistake #6. Not Knowing The Full Cost Of Buying

Know all the costs associated with your purchase.  Consider the following costs:   legal fees, transfer tax, property taxes, new home landscaping, fencing, appliances, window coverings.

Mortgage Information

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Mortgage lending is a highly competitive field. Information on mortgage rates, which can change daily, is available in local newspapers, through mortgage brokers, from individual lenders and of course through conventional financial institutions. When you are shopping for a loan, interest rates tell just part of the story. You will also need to study the various fees lenders charge and many mortgages today are almost custom-tailored to individual needs with many options available.

Ask your Agent

Your RE/MAX agent can recommend lenders to check with prior to beginning any serious house hunting so you will know exactly what you can afford.

For further information, please contact TD Canada Trust

Real Estate Glossary

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Amortization The period of time required to reduce a debt to zero when payments are made regularly. Amortization periods are most often 15, 20, or 25 years long.

Anniversary Most lenders allow borrowers to make a payment on the anniversary of the mortgage. (For a mortgage assumed on June 1, a payment can be made every subsequent June 1 for the term of the mortgage.) It is applied against the principal and is a good way of reducing a loan.

Appraisal A process that determines the market value of a property.

Appraised Value An estimated value of a property that is completed by a certified appraiser for mortgage financing.

Approved Lender A lending institution authorized by the Government of Canada to make loans under the terms of the National Housing Act. Only Approved Lenders can negotiate mortgages that require mortgage insurance.

Assumption A legal document signed by a homebuyer that requires the buyer to assume responsibility for the obligations of a mortgage by the builder or original owner.

Balanced Market Where demand for property equals the supply of available property. Sellers usually accept reasonable offers and houses generally sell in sufficient time periods. Prices remain stable and there is usually a good number of homes to choose from.

Blended Payment A mortgage payment that includes principal and interest. It is paid regularly during the term of the mortgage. The payment total remains the same, although the principal portion increases over time and the interest portion decreases.

Building Permit A certificate that must be obtained from the municipality by the property owner or contractor before a building can be erected or repaired. It must be posted in a conspicuous place until the job is completed and passed as satisfactory by a municipal building inspector.

Buyer's Market When there is a higher number of homes to choose from than buyers in comparison. Prices of homes tend to be lower and they remain available for sale longer. Buyers usually have more leverage in negotiating a purchase.

Closed Mortgage A mortgage loan that has a locked-in payment schedule, which does not vary over the life of the closed term. A buyer who uses a closed mortgage will likely have to pay the lender a penalty if you fully repay the loan before the end of the closed term.

Closing Costs Costs, in addition to the purchase price of a home, such as legal fees, transfer fees, and disbursements, that are payable on the closing date. Closing costs typically range from 2%-4% of a home's selling price.

Closing Date The date on which the sale of a property becomes final.

CMHC Canada Mortgage and Housing Corporation. A Crown corporation that administers the National Housing Act for the federal government and encourages the improvement of housing and living conditions for all Canadians. CMHC also creates and sells mortgage loan insurance products.

Collateral Mortgage A mortgage that secures a loan by way of a promissory note. The money borrowed can be used to buy a property or can be used for another purpose, such as a home renovation or a vacation.

Commitment Letter / Mortgage Approval Written notification from the mortgage lender to the borrower that approves the advancement of a specified amount of mortgage funds under specified conditions.

Conditional Offer / Conditions of Sale An Offer to Purchase that is subject to specified conditions, for example, the arranging of a mortgage. There is usually a stipulated time limit within which the specified conditions must be met.

Conventional Mortgage A mortgage loan up to a maximum of 75% of the lending value of the property. Mortgage loan insurance is not required for this type of mortgage.

Covenant A clause in a legal document which, in the case of a mortgage, gives the parties to the mortgage a right or an obligation. For example, a covenant can impose the obligation on a borrower to make mortgage payments in certain amounts on certain dates. A mortgage document consists of covenants agreed to by the borrower and the lender.

Conveyancing The transfer of ownership of any property or real estate from one person to another.

Deed A legal document, which is signed by both the vendor and the purchaser transferring ownership. This document is registered as evidence of ownership.

Default Failure to abide by the terms of a mortgage loan agreement. A failure to make mortgage payments, defaulting on the loan, may give cause to the mortgage holder to take legal action to possess (foreclose) the mortgaged property.

Deposit A sum of money placed in trust by the purchaser when an Offer to Purchase is made typically. The real estate representative or lawyer holds the sum until the sale is closed, and then it is paid to the vendor.

Discharge of Mortgage A document signed by the lender and given to the borrower when a mortgage loan has been repaid in full.

Down payment The portion of the house price the buyer must pay up front from personal resources, before securing a mortgage. It generally ranges from 5%-25% of the purchase price.

Easement A right acquired for access to or over, or for the use of, another person's land for a specific purpose, such as a driveway or public utilities.

Encumbrance A registered claim for debt against a property, such as a mortgage.

Equity The difference between the price for which a home could be sold and the total debts registered against the home. Equity usually increases as the outstanding principal of the mortgage is reduced through regular payments. Market values and improvements to the property also affect equity.

FHLI First Home Loan Insurance - This is a CMHC product of particular interest to people looking for their first home. It allows qualified first-time buyers to purchase a home with as little as 5% down. In these cases, CMHC will insure mortgages of up to 95% of the home's purchase price or the market value of the property, whichever is less. (Restrictions may apply. Contact your local lender.)

Foreclosure A legal procedure in which the lender gets ownership of the property if the borrower defaults on the mortgage loan.

Gross Debt Service Ratio The percentage of the borrower's gross income that will be used for monthly payments of principal, interest, taxes, heating costs, and half of any condominium maintenance fees.

High-Ratio Mortgage / Insured Mortgage Loan A mortgage loan in excess of 75% of the lending value of the property. This type of mortgage must be insured - for example, by CMHC - against payment default.

Holdback An amount of money withheld by the lender during construction of a house to ensure that construction is satisfactory at every stage. A standard holdback is 10% of the total cost of the building project.

Interest The cost of borrowing money for a given period of time. Interest is usually paid to the lender in instalments along with repayment of the principal loan amount.

Interest Adjustment Date (IAD) A date from which interest on the mortgage advanced is calculated for regular payments. This date is usually one payment period before regular mortgage payments begin. Interest due between the date the mortgage is advanced and the IAD is due on closing.

Interest Rate The rate at which you pay interest to the lender. For example, when the mortgage balance is $100,000, and the interest rate is 6 per cent, one single annual payment will include $6,000 interest. More frequent payments will result in different amounts.

Lending Value The purchase price or appraised value of a property, whichever is less.

Loan-to-Value Ratio The ratio of the loan to the lending value of a property expressed as a percentage. For example, the loan-to-value ratio of a loan for $25,000 on a home which costs $100,000 is 25%.

Lien (Mechanics) A claim against a property for money owing. A lien may be filed by a supplier or a subcontractor who has provided labour or materials but has not been paid. A lien must be properly filed by a claimant. It has a limited life, prescribed by statutes that vary from province to province. If the lien holder takes action within the prescribed time, the homeowner may be obliged to pay the amount claimed by the lien holder. Alternatively, the lien holder may force a sale of the property to pay off the debt.

Maturity Date The last day of the term of the mortgage agreement. On this day the mortgage loan must be paid in full or the agreement renewed.

Mortgage Security for a loan to purchase property. It is the purchaser's personal guarantee to repay the loan and a pledge of the property as security for the loan.

Mortgage Life Insurance Insurance to pay off your mortgage in full if you die. Many lenders offer this insurance and add the premium to your mortgage payments. However, you may want to compare rates for equivalent products from an insurance broker.

Mortgage Loan Insurance Insurance required by lenders for high-ratio mortgages (more than 75% of the purchase price). It is available from CMHC or a private insurer for a cost of between 0.5% and 3% of the amount of the mortgage.

Mortgage Payment A regularly scheduled payment that is blended to include both principal and interest.

Mortgagee The lender who provides the mortgage loan.

Mortgagor The borrower who pledges the property as security for the loan.

Net Worth A person's total financial worth, calculated by subtracting total liabilities from assets.

NHA Premium Insurance required by lenders for high-ratio mortgages (more than 75% of the purchase price). It is available from CMHC or a private insurer for a cost of between 0.5% and 3% of the amount of the mortgage. The premium can be added to your mortgage loan and paid off as part of your regular mortgage payments, or paid off in a lump sum at the time of purchase to save interest charges on the premium itself.

Offer to Purchase A written contract setting out the terms under which the buyer agrees to buy. If accepted by the seller, it forms a legally binding contract subject to the terms and conditions stated in the document.

Open Mortgage A type of mortgage loan where the borrower can make a partial or full payment of the principal amount at any time, without penalty.

Option Agreement A document stipulating that, in exchange for a deposit, a specified individual is to be given the first chance to buy a property at or within a specified period of time. An option holder who does not buy at or within the specified period loses the deposit and the agreement is cancelled.

P.I.T. Principal, Interest, and Taxes - payments due on a regular basis under the terms of a mortgage agreement. Generally, payments are made monthly and include one-twelfth of the estimated annual municipal and school taxes. Since these taxes change from year to year, this section of the mortgage will change accordingly.

P.I.T.H. Principal, Interest, Taxes, and Heating - costs used to calculate the Gross Debt Service ratio (GDS).

Portability An option available on a mortgage that enables the mortgagor to take their current mortgage loan with them to another property without penalty.

Pre-Approved Mortgage When a lender approves the potential mortgagor for a specified amount, based on how much money the lender is prepared to lend to the borrower. This allows buyers to shop for homes that they already know they can obtain financing for and not homes that are potentially too expensive, or out of the borrowers means to finance.

Prepayment Privileges Allows the borrower to make voluntary payments on the mortgage loan, in addition to the regular, scheduled mortgage payments.

Principal The amount of money borrowed.

Property Purchase or Land Transfer Tax A toll paid to the provincial and/or municipal government(s) for transferring property to the buyer from the seller.

Realtor® A trademark name for a real estate representative who is a member of an organization of persons engaged in the business of buying and selling real estate, such as the Canadian Real Estate Association.

Refinance To pay off a mortgage or other registered encumbrance and arrange for a new mortgage, sometimes with a different lender.

Regular Mortgage With this type of mortgage, you pay between 10% and 25% of the cost of the home as a down payment. The remaining balance is the amount of the mortgage loan required. A high-ratio mortgage requires mortgage loan insurance. CMHC offers it for a premium of 0.5%-3% of the mortgage amount. This fee can be added to your mortgage payments or paid in full on closing.

Renewal At the end of a mortgage term, the borrower re-negotiates the loan for a new term.

Second Mortgage An additional mortgage on a property that already has a mortgage.

Seller's Market More buyers are looking for homes than there are homes for sale. There is a smaller inventory of homes available for sale and many buyers looking to purchase. House prices generally increase and homes sell quickly.

Strata or Condominium Fee A payment made by all owners of condominiums or townhouses within a particular complex that is allocated to pay expenses such as maintenance, repairs and management costs.

Statement of Adjustment (s) A balance sheet statement that indicates credits to the vendor - for example, the purchase price - and any prepaid taxes and credits to the buyer, such as the deposit, and the balance due on closing.

Survey A document that illustrates the property boundaries and measurements, specifies the location of buildings on the property, and indicates any easements or encroachments.

Term The length of time during which a mortgagor pays a specific interest rate on the mortgage loan. The entire mortgage principal is usually not paid off at the end of the term because the amortization period is normally longer than the term.

Title (freehold or leasehold) Legal possession. A freehold title gives the holder ownership of land and buildings for an indefinite period of time. A leasehold title gives the holder a right to use and occupy land and buildings for a defined period of time. In a leasehold arrangement, actual ownership of the land, sometimes along with the buildings, remains with the landlord.

Total Debt Service Ratio (TDS) The percentage of gross annual income required to cover all payments for housing and all other debts, such as car payments.

Variable-rate Mortgage A type of mortgage with fixed payments but fluctuating interest rates. The change in current interest rates doesn't alter the amount of the mortgage payment, but determines how much of each payment is applied against the principal amount and how much goes to pay interest to the lender.

Vendor Take-Back Mortgage Mortgage financing arranged between the seller of the property and the buyer. Often this type of loan is a second mortgage, which the seller is willing to arrange at below market rates to allow the buyer to purchase the house. Most of these arrangements are not renewable or transferable to the next owner of the house.

Zoning Bylaws Municipal or regional laws that specify or restrict land use.