Frequent Questions

Whether you are buying or selling, we are committed to guiding you through each step of the transaction and providing relevant resources to help. 


  • Advantages of using a real estate professional?

  • Can I sell my house myself?

  • How do I price my house sensibly

  • What is a home inspection and should I have one done?

  • I’m thinking of selling my property. What are some of the costs involved?

  • Where do I begin the process of looking for a home?

  • What is the minimum down payment needed for a home?

  • What is a pre-approved mortgage?

  • How can you acquire a home with as little as 5% down?

  • How can you pay off your mortgage sooner?

  • How can you use your RRSP to help you buy your first home?

  • What are the monthly costs of owning a home?


    • Answers

    Advantages of using a real estate professional?
    Buying a home is certainly one of the most rewarding experiences most of us ever have; it's also one of the most challenging. If you're buying for the first time, the process may seem overwhelming. Every move is different and presents new challenges.

    One clear advantage of enlisting the help of a sales professional is simply that you don't have to go through it alone. A good sales professional has the background and skills to help you through each step of the process, and make the experience of finding, buying and moving into your new home as smooth, quick and enjoyable as it can be. Another advantage is that a sales professional represents a valuable source of information about market trends; communities and neighborhoods; and especially homes for sale throughout the area. Remember, not every home seller runs an ad in the local paper or puts a sign up in the yard. In fact, many homes actually sell before there is ever a need to advertise them. The market expertise a sales professional offers you is augmented by access to complete, regularly updated information about every home listed by area sales professionals through the Multiple Listing Service (MLS). As you'll see in the following questions, such professional expertise and services can be of considerable help throughout the buying process.

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    Can I sell my house myself?
    Many people believe they can save a considerable amount of money by selling on their own. They look at the average commission on a house and remember stories of friends or relatives who managed to get through the process with seemingly little trouble. "Other people have sold their own homes," they say — "so why can't I?"

    To sell your own home, you'll need to realistically assess exactly what's involved. Prie your house accurately, determining whether or not a buyer is qualified, create and pay for your own advertising, get familiar with enough basic real estate regulations to understand a real estate contract and finally, you should be able to coordinate the details of a closing. These are serious responsibilities to take on! They include the concerns that your house is only on the market when you're home, your marketplace is limited to those you can reach locally, and a mistake may cost you the money you're trying to save.

    One of the best reasons for working with a real estate broker is the enormous amount of information they have available that can help make your house sell faster and easier. Real estate professionals know about trends, houses in your local area, and the people most likely to buy in such neighborhoods. They also know how to reach the largest number of people who may be interested in your house and are trained in areas like screening potential buyers and negotiating with them. Best of all, real estate sales representatives are always "on-call," and willing to do the things most of us don't: working on the weekends and answering the phone at all hours.

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    How do I price my house sensibly
    It is important to be realistic about your home's value and price it accordingly. To determine the fair market value, a real estate professional can supply information on comparable homes that have sold or gone under contract in your area

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    What is a home inspection and should I have one done?
    A home inspection is a visual examination of the property to determine the overall condition of the home. In the process, the inspector should be checking all major components (roofs, ceilings, walls, floors, foundations, crawl spaces, attics, retaining walls, etc.) and systems (electrical, heating, plumbing, drainage, exterior weather proofing, etc.). The results
    of the inspection should be provided to the purchaser in written form, in detail, generally within 24 hours of the inspection.

    A pre-purchase home inspection can add peace of mind and make a difficult decision much easier. It may indicate that the home needs major structural repairs which can be factored into your buying decision. A home inspection helps remove a number of unknowns and increases the likelihood of a successful purchase.

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    I’m thinking of selling my property. What are some of the costs involved?
    It is a condition of a non-resident selling property in Canada that they first obtain a Clearance Certificate from Canada Customs & Revenue Agency. The current wait for a Clearance Certificate (October 2001) is approximately 10 to 12 weeks. Prior to Canada Customs & Revenue Agency issuing a Clearance Certificate they will wish to collect any tax payable with respect to the property - this will include any tax payable on the rental income from the property which has not already been remitted as well as tax on the capital gain experienced on the property and if applicable, recapture of capital cost allowance.

    In calculating the capital gain on the property Canada Customs & Revenue Agency allows only the following to be added to the purchase price to determine the adjusted cost base:

    Property Transfer Tax

    Legal fees and disbursements in conjunction with the purchase Furnishings and renovations included in the selling price;(receipts for the included items will be required). It is critical that you retain receipts for the furnishings and that they identify the furnishings and as having been acquired for your real estate property as well as any Customs documentation showing furnishings acquired in other jurisdictions..

    Goods and Services Tax (GST)

    A portion of the interest on mortgage payments (only if the Vendor has properly elected to have the interest capitalized on their tax return).

    Canada Customs & Revenue Agency does not allow any deductions from the selling price in determining the gain (i.e. you cannot subtract the real estate commission, legal fees or GST paid on the selling). The amount required to be remitted on the gain is 25 percent of the gain. By filing a Canadian tax return subsequent to the sale, you can claim expenses such as commission and legal fees and some of the tax paid may be recovered.

    Sellers should contact their accountants or lawyers with respect to requesting a Clearance Certificate as soon as an accepted offer has been received with respect to the property. Should the completion date be prior to the issuance of the Clearance Certificate, a holdback of between 25% and 50% of the sale price will be required by the Purchaser's solicitor until the Clearance Certificate is issued.

    Please note that the Purchasers lawyer may take the position that if the property has been rented out it is a depreciable property and therefore the holdback is 50% on the portion of that purchase price that relates to the building.

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    Where do I begin the process of looking for a home?
    The first thing you should do is to begin focusing on what you're looking for in a home. Three main areas to look at include location, personal taste and budget.

    As you consider these issues, do a little research of your own. Look through magazines for ideas about home styles and features. Drive through neighborhoods that appeal to you to see what's available. Read the real estate listings in the newspaper to learn about current prices in the areas you're considering. Talk to friends about the features that you'd really like to have in your home. The more knowledgeable you become, the better your final decision is likely to be.

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    What is the minimum down payment needed for a home?
    A minimum down payment of 5% is required to purchase a home, subject to certain maximum price restrictions. For instance, in the Greater Vancouver area the maximum purchase price with 5% down is $250,000. Any purchase price in excess of $250,000 requires a minimum of 10% as a down payment. In addition to the down payment, you must also be able to show that you can cover the applicable closing costs (i.e. legal fees and disbursements, appraisal fees and a survey certificate, where applicable).

    Regardless of the amount of your down payment, at least 5% of it must be from your own cash resources or a gift from a family member. It cannot be borrowed.

    Lenders will generally accept a gift from a family member as an acceptable down payment provided a letter stating it is a true gift, not a loan, is signed by the donor. Where the mortgage loan insurance is provided by Canada Mortgage and Housing Corporation (CMHC), the gift money must be in the your possession before the application is sent in to CMHC for approval.

    Mortgages with less than 25% down must have mortgage loan insurance provided by either CMHC or GE.

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    What is a pre-approved mortgage?
    A pre-approved mortgage provides an interest rate guarantee from a lender for a specified period of time (usually 60 to 90 days) and for a set amount of money. The pre-approval is calculated based on information provided by you and is generally subject to certain conditions being met before the mortgage is finalized. Conditions would usually be things like 'written employment and income confirmation' and 'down payment from your own
    resources', for example.

    Most successful real estate professionals will want to ensure you have a pre-approved mortgage in place before they take you out looking for a home. This is to ensure that they are showing you property within your affordable price range.

    In summary, a pre-approved mortgage is one of the first steps a home buyer should take before beginning the buying process.

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    How can you acquire a home with as little as 5% down?
    Most lenders now offer insured mortgages for both new and resale homes with lower down payment requirements than conventional mortgages - as low as 5%. Low down payment mortgages must be insured to cover potential default of payment, and their carrying costs are therefore higher than a conventional mortgage because they include the insurance premium.

    With all low down payment insured mortgages, you are responsible for:

    :appraisal and legal fees
    :an application fee for the insurance
    :the payment of the mortgage default insurance premium (although the amount of the premium may be added to the mortgage amount).

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    How can you pay off your mortgage sooner?
    There are ways to reduce the number of years to pay down your mortgage. You'll enjoy significant savings by:

    Selecting a non-monthly or accelerated payment schedule
    Increasing your payment frequency schedule
    Making principal prepayments
    Making Double-Up Payments
    Selecting a shorter amortization at renewal

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    How can you use your RRSP to help you buy your first home?
    Today, about 50% of first-time home buyers use their RRSP savings to help finance a down payment. With the federal government's Home Buyers' Plan, you can use up to $20,000 in RRSP savings ($40,000 for a couple) to help pay for your down payment on your first home. You then have 15 years to repay your RRSP.

    To qualify, the RRSP funds you're using must be on deposit for at least 90 days. You'll also need a signed agreement to buy a qualifying home.

    Even if you have already saved for your down payment, it may make good financial sense to access your savings through the Home Buyers' Plan. For example, if you had already saved $20,000 for a down payment - and assuming you still had enough "contribution room" in your RRSP for a contribution of that amount you could move your savings into a registered investment at least 90 days before your closing date. Then, simply withdraw the money through the Home Buyers' Plan.

    The advantage? Your $20,000 RRSP contribution will count as a tax deduction this year. Use any tax refund you receive to repay the RRSP or other expenses related to buying your home.

    While using your RRSP for a down payment may help you buy a home sooner, it can also mean missing out on some tax-sheltered growth. So be sure to ask your financial planner whether this strategy makes sense for you, given your personal financial situation.

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    What are the monthly costs of owning a home?
    Needless to say, you'll have financial responsibilities as a home owner.

    Some of them, like taxes, may not be billed monthly, so do the calculations to break them down into monthly costs. Below you will find a list of these expenses.

    a) Mortgage Payment
    b) Property Taxes
    c) School Taxes
    d) Utilities
    e) Maintenance and Upkeep

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