theDIV

Hi,
Can someone explain the house-buying procedures over there?

How is an offer made?

Is it acceptable to offer less than the asking price?

Is an offer legally binding in any way?

How do you go about getting a survey done? What are the costs involved?

Are there any hidden costs?

Housing construction seems very different over there, what sort of basic things should I be looking for in terms of heating systems etc? Do wooden houses degrade faster than houses in the UK?

Does property over there generally decrease in value over time?

I'd probably be looking to buy before actually making the move over there (possibly even before receiving my visa). Obviously I'd come over to view prospective properties before purchase. Has anyone had any experience of doing it this way?

And finally, whats the general opinion on the "hanydman specials"????

Any advice appreciated - thanks!

mickj

[QUOTE]Originally posted by theDIV
Hi,
Can someone explain the house-buying procedures over there?


Hello there,

This should answer some of your questions:

http://www.cmhc-schl.gc.ca/en/bureho...stst/index.cfm

If you are looking to buy a new home in southwestern ontario, then checkout:

www.newhomesandcondos.com


Good luck

iaink

OK, this advice is based on what we did when we bought in Ontario...may be different in other provinces

I am going to assume that the house is listed with a real estate agent ("realtor")

To make an offer, we went to a realtor (they know the law, and dont charge the buyer anything), who completed the formal paperwork for the offer. Everything is documented, down to the light fittings etc. An offer is legally binding, subject to some conditions being met, the usual ones being water quality test, well flow rate test if applicable, satisfactory inspection,financing available etc.

It is the norm to offer under the list price, as far as I can tell. This is a good start to negotiations. The seller usually comes back with a counter offer, and it goes back and forth until agreed between both parties.

In my case the existing survey was acceptable to the mortgage company, so i didnt have to get a new survey, but this is usually about a $500 cost. Sometimes the cost of the old survey is recouped in the final house price. IIRC this is typically the sellers responsibility, not the buyers.

Closing costs are usually about 1 to 1.5% of the property value, and include land registration charges, legal fees, probate checks etc, the usual stuff, nothing struck me as out of the ordinary. Remember, the buyer pays nothing in realtor fees and commision, but the seller pays anything up to 7%, although I have seen agents looking for business quote as low as 2.5%, remember, this is for the seller.

Heating systems....the norm is forced air furnace, often oil fired or gas. Electric is also offered. Forced air basically means air passes over the heat source heat exchanger and is circulated through ducts by a fan. Not many UK style radiator systems. Apartments and small places sometimes have electric baseboard heaters, basically a direct electrical resistance heating system in a long thin box along the base of the wall, each room on its own thermostat. Generally this is an expensive system to run. Some places have a heat pump (kind of like AC in reverse), especially if they have a realy fast flowing well to use as a heat exchanger, it is not common though, but can be very efficient in some circumstances.

Forced air also means attaching air con is easy to do, so look for this too, its hot and sticky in the summer.

Be wary of older furnaces, mine is old and needs replacing, it costs a lot to fuel due to its low efficiancy, and there are some CO concerns too, We are looking at $5k to replace furnace chimney liner and tank. Also watch out for old oil tanks. Many insurers will not cover a house with older oil tanks, and some are refusing places with woodstoves too now.

Due to the environment things like roofs and siding take a beating. Most roof tiles are actually asphalt shingles, which last up to twenty years. If they are getting bare and peeling up at the edges a new roof will not be far away. Some people prefer a tin (steel) roof, which is the fit and forget option but expensive. Ceramic tiling is not very common due to issues with freeze thaw etc. Remember a roof here has to be able to breath, its the insulation under it that keeps you warm, not the roof itself. There should be adequate vents to achieve this.

Property still seems to increase in value, at least with inflation, but there is no way it is an "investment" in the same way it is in the UK. Maybe some waterfront property rises due to scarcity, but this seems to be the exception to the rule. Older houses tend to be cheaper than new because they will cost more to maintain, but the current value of an older home is still higher than the cost of that property when it was new.....clear as mud!.

Be vary carefull about getting a home inspector, some are good, many are rip off merchants. Get a number of personal recomendations, or ask for references and follow them up before choosing one.

Unless you have a lot of time and or experience fixing places up, I would avoid the handyman specials. If you are good at that stuff and have time to fix up a place it is OK, but you dont really want to get in a suituation where your first winter is coming, your roof is missing, and you cant do the work on the foundation you need to because you forgot the ground would freeze like concrete, and you have to work outside in -20C temps. Its not for the faint hearted.

Hope this helps

Iain

ray1968

See my website for newcomers it explains the process

www.westgtahomes.com/Newcomers.htm

Ray

ukjo

give me buying a house in canada compared to the uk anyday!!! the biggest difference i found was that when your offer is accepted we decided what amount of time we needed to get the surveys etc done and then sat back and waited. we decided at the onset of a date to close the sale and put money down so the sellers knew we were serious about buying. if for whatever reason we pull out we loose that money. we are though in the situation now where they cannot move into their new house but they are moving in with their son anyway. if they hadnt then they would of had to paid for us to be put up in a hotel and our stuff in storage until they were ready to move out.

the truth in the uk? you havent got that house until you get the key in the door!! i found that one out once when 3pm the friday afternoon the solicitor representing the seller of my new house decided it was hometime and we were homeless!!!!!

i have less than 3 weeks to go until closing and my stress levels, for once, are just about at zero!!!!

theDIV

thanks Guys - iaink, your help is invaluable! This is just the sort of advice I was looking for ().

I am a bit wary of the do-it-yourself option, as my skills are limited. However, does anyone think it is still worthwhile buying an older property that needs some work doing, and getting a third party to do the work? Is this sort of thing cost-effective?

Another thing - I have generally been looking at http://www.mls.ca for properties, do most tend to be listed here, or is it advisable to look at individual realtors' websites? If so, which ones are worth looking at (Im considering properties in the Kingston, Ontario area)?

Again, thanks for all the help!

Tiaribbon

MLS is a great gateway to the property market and gives you the websites for most realtors listings. Not every property is listed on MLS so it's sometimes worth taking the detour. Don't be shy to put in a really low bid as the counter offer will give you a clear indication of what the vendor is really expecting. Think of the purchasing system in Canada as very similar to the Scottish system, much less hassle than the English way. We have just bought a farm in Ontario in the Northumberland area and the purchasing of it was a piece of cake, nothing to worry about, so long as you are sure it is the right place for you, you'll be fine.