Buying and Selling a Home For Canadians For Dummies Cheat Sheet

Deciding to sell your home: Tips for Canadians

Like most Canadians, you may find it hard to decide whether or not to sell your home. Even if you love your house or condo, you may have a good reason for selling — especially if it won’t meet your changing needs. If any of the following describe your situation, you’re probably ready to move on:

• The location no longer fits. You may have found the ideal home when you first moved to a city, but ten years later new friends or a better job may prompt you to move to a different location. Alternatively, your family situation may have changed or you want to downsize to a quieter property outside of town. Changes in your life may mean selling your house makes sense.
• Your house is too small or too big. A growing family, new career, or other factors may force you to right-size your home. Renovations aren’t always possible, and sometimes they’re not even the best answer. When size matters, look to see what else is on the market. You may be able to trade up or downsize and free up some cash for other projects.
• Life throws you a curveball. A traumatic event like a divorce or death is a common reason to move. There’s no shame in doing so. Take time to review your financial situation and personal goals so that whatever move you make is the right one, and one not just based on raw emotion.

Your Canadian home-viewing checklist

Before you buy a home in Canada, you’ll want to know that the property has been well maintained so you can avoid hidden problems and costs down the road. To find out how well the previous owners took care of their home, check out the following at the open house:

• Fire safety: The home should have working smoke detectors and carbon monoxide detectors. Some newer homes may have sprinklers or some other fire suppression system.
• Roofing: Find out what the roof is made of (wood, asphalt, tar and gravel, steel, and so on). The type of material used will hold a clue to the lifespan of the roof. A 10-year-old steel roof has about 40 years of life left, but an asphalt roof may be halfway through its life.
• Windows: The windows are well sealed and preferably double paned.
• Foundation: The exterior foundation has no cracks.
• Wiring: Ask whether the home has aluminum wiring or if the wiring has been modified or upgraded in any way. Confirm that the house is serviced by at least 100-amp power and assess the number and distribution of outlets to ensure the home can power your lifestyle.
• Plumbing: Make sure plumbing is not leaking and that water pressure is adequate.
• Exterior: The yard(s) should be in good condition. Rotten wood siding, decaying stucco, or cracked vinyl may indicate deeper issues with the building envelope.
• Bathrooms: The area around the tub or shower has no signs of water damage or mold.
• Appliances: Major appliances like the fridge, stove, washer and dryer, and dishwasher (if included), should be in good working order.

Understanding real estate "subject to" clauses

In Canadian real estate contract negotiation, “subject to” clauses are a way for home buyers to escape the contract if something goes wrong. Three of the most common clauses on an offer to purchase are as follows:

• Subject to financing clauses don’t offer much room for negotiation. Buyers can’t remove this subject clause during the offer/counteroffer process unless they have a lot of equity and don’t require a mortgage, or require a relatively small and easy-to-get mortgage. Remember, if the buyer didn’t need a mortgage, she likely wouldn’t have made the offer subject to financing in the first place.
• Subject to inspection clauses are commonly included in a buyer’s offer to purchase a home. Because arranging an inspection should take no more than two or three days, this clause is an easy one to negotiate. As with the financing clause, though, you can try to negotiate a shorter time period for the inspection’s completion to speed things up.
• Subject to sale clauses can be negotiated with regard to the length of time you give your buyers to sell their current home. Any buyer who already owns a home probably can’t afford to carry the expense of two homes at once. Still, no matter how anxious you are to move, allow the buyer a decent amount of time to list and sell his home.

Four to six weeks is usually considered fair. Most sellers will include a time clause, so that if another suitable offer comes along during that time, the seller can activate that clause. This means the buyers with the accepted offer have a set amount of time (often 24 to 72 hours) to remove the clause or drop out of the contract and let the competing offer proceed.

Household items included with the sale of a home

When buying a home in Canada, make sure that you know exactly which household items and appliances will be included with your purchase. The following three parts of the contract tell you just that, enabling the buyer and seller to agree on what will stay, and what will go:

• Chattels: These are items that aren’t structurally part of the house and can be removed, but you may want to include them in the sale. Commonly purchased chattels include major appliances, such as the fridge and stove, but you can also include those drapes the sellers said they’d leave.
• Fixtures: These are affixed to the house, such as light fixtures, overhead fans, and built-in bookcases. Unless otherwise noted, fixtures are included in the purchase price of the home.
• Rental items: These items are things the sellers rented, like hot water heaters or propane tanks and security systems. They aren’t included in the house’s purchase price unless you and the seller agree that they are. The contract should note that the buyer will assume the lease and all lease obligations for the propane tanks or security system. If the seller hasn’t provided copies of the rental or lease documents prior to you making your offer, make your offer subject to you receiving and approving the lease agreements as necessary.

How to pay less interest on your mortgage

Hate having a big mortgage? Join the club. Canadians want to get out of debt, but according to Mortgage Professionals Canada, more than two-thirds of Canadian borrowers fail to make any type of extra payment on their mortgages. Remember that you can save yourself a lot of money by limiting the amount you spend on interest. Use these strategies to keep your mortgage interest payments low:

• Make as large a down payment as you comfortably can. The larger your down payment, the smaller your loan (principal), and the less interest you’ll have to pay.
• Arrange to pay back the loan as quickly as possible. The longer the amortization period (the life of the loan), the more interest you’ll pay.
• Commit to making weekly or biweekly payments. This will allow you to pay off the principal more quickly and therefore pay less interest on it.