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Buying house in Canada help
OK, so we just got back from a crazy busy trip to NS to visit family, meet with recruitment agencies/employers and look at houses. It was great fun but exhausting! Now initially we just wanted to look at houses to start to get a feel for them, but of course we've found a house we love. Grrr! We should be exchanging on our house here in London in a couple of weeks and completing 2-4 weeks after that. We've talked to a mortgage broker and think we can get pre-approval and then a mortgage, on the basis of the equity from our house (we don't have jobs arranged for Halifax yet). Now with the way I understand the UK and Canadian systems, it seems like we shouldn't put an offer in on the Canadian property until we have exchanged here. Does that seem right? Tips from people who have done this before please! I understand that the offer we put in on the Halifax property will be subject to us selling our UK house (and getting a mortgage and inspection) but that the seller of that house will keep it on the market until the conditions are met and will give us a schedule of time to meet them in. Plus since our mortgage approval is based on th equity of our UK house, we'll need that money asap? Or am I totally confused? How do you buy a house in Canada while selling your UK house? I'm terrified of our buyer pulling out and us having an offer in on this Canadian house and being legally bound to buy it!
Confused. Scared. Wah-ah! Charmaine |
Re: Buying house in Canada help
I know what you are going through. I had to make the deposit on a lot of land at the end of August, or loose the lot. Felt comfortable since we had an offer from what seemed like honest buyers who stated that they didn't need a mortgage. The a!@#&*les pulled out on the day that we had agreed to exchnage contracts becuase they were unable to get the mortgage. Words fail me. 4 months to resell the house or loose a very large deposit
But to answer some of your question. As I understand it is not unusual for people to make offers with the condition that they need to sell their own house. What generally then happens is that you then have first refusal if anyone makes and acceptable counter offer. By this you probably have between 1 and 3 days to finance the purchase regardless or the sellers then have the right to sell to the other party. |
Re: Buying house in Canada help
Buying/selling a house in Canada is a simple process.
If you make an offer and the seller accepts it, you are legally bound to buy it. Period. Once an offer has been accepted, the house is sold. They seller cannot continue to talk to other potential buyers. Nor can any Real Estate Agent. It is a done deal. Period. Think of it this way, you have bought a house and you have to find a way to pay for it. What you do with your existing house is of no interest to the seller unless you did indeed have a clause in the contract that says the deal is off it you can't sell your house. However I think you will find that very few sellers are willing to accept that condition. Think about the position it puts them in. It may be common in the UK but in Canada the thinking of the seller would be, ' why would I tie myself in to that when I can find another buyer who is not attaching that condition to their offer?' A large percentage of buyers in Canada do not put an offer on a house until they know they have their house sold to someone. They won't sell it to someone with a 'get out' clause since it would put them in the same position. Another percentage do make an offer before having their own house sold and plan to use bridge financing if their house doesn't sell in time. Obviously they have to know beforehand that they can get the bridge financing. Where 'house chains' fall through in the UK it is because of this 'get out' clause obviously. What makes things work in Canada is bridge financing. If you make an offer and it is accepted and you then refuse to go through with the deal, it is not only a matter of perhaps losing a deposit, you may well be sued by the seller. |
Re: Buying house in Canada help
Originally Posted by WorldWeary
However I think you will find that very few sellers are willing to accept that condition.
All this really is, is an in priniple agreement to a sale price. The seller has nothing to loose other than a dely of a dely of a day or two. The can still canvas for buyers. Perhaps this is just a local thing to Calgary. Mid to upscale properties in Rocky View are not selling like hotcakes, despite what the press would have you thing. Many near where I live have been on the market since I arrived in June, so these sellers would be happy to get any interest |
Re: Buying house in Canada help
Originally Posted by Posidrive
Before we decided to build our own house I had a look at some properties on the MLS. of the first 5 I looked at, 3 were under offer (Or whatever the local term is) subject to this provision. Now this may have been some ploy by the realor, but ....
that sounds like they were sold subject to the buyer selling their own house thus a 24 hour kick out clause would be in place........if you would have viewed them and said I want to buy one of them then the other buyer would have 24 hours to come up with the money or the house would be yours.......these kickout clauses are not very good for the seller as it basically takes their house off the mkt........I bet you didn't look at the 3 under offer did you......many think it's a done deal when in fact it isn't until the buyer sells his house ;) |
Re: Buying house in Canada help
Originally Posted by Posidrive
I know what you are going through. I had to make the deposit on a lot of land at the end of August, or loose the lot. Felt comfortable since we had an offer from what seemed like honest buyers who stated that they didn't need a mortgage. The a!@#&*les pulled out on the day that we had agreed to exchnage contracts becuase they were unable to get the mortgage. Words fail me. 4 months to resell the house or loose a very large deposit
But to answer some of your question. As I understand it is not unusual for people to make offers with the condition that they need to sell their own house. What generally then happens is that you then have first refusal if anyone makes and acceptable counter offer. By this you probably have between 1 and 3 days to finance the purchase regardless or the sellers then have the right to sell to the other party. Example: It is 6pm on a Tuesday evening. You advise your Real Estate Agent that you wish to make an offer on my house. I am asking for 100k and after discussion with your agent you decide to offer me 90k. Your Agent writes up a legally binding Offer to Purchase. He then arranges to meet me and my agent to present the offer. He meets us at my house at 7pm. (Generally your offer has a time clause in it. You don't want me to have time to perhaps get another interested buyer. So you make an offer good only until midnight tonight.) Your agent either waits in another room or outside in his car while my agent and I discuss your offer. I decide not to accept or reject outright but to 'sign it back'. I sign it back (on the same piece of paper) at 97k. My agent then gives it to your agent and tries to convince your agent that it is the best deal you are going to get. Your agent returns to you to discuss my counter offer. It's now 8pm. This process of offer/counter offer goes back and forth until either you decide not to make another offer or I decide not to make a counter offer and reject your offer outright. The point is, that a decision gets made within a finite period of time. Once an offer is on the table the potential buyer has no intention of coming back tomorrow and perhaps letting other buyers get in the door in the meantime. If as a buyer you cannot get acceptance of your offer at some point, you walk away. End of story. |
Re: Buying house in Canada help
Originally Posted by psb182
I bet you didn't look at the 3 under offer did you......many think it's a done deal when in fact it isn't until the buyer sells his house ;)
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Re: Buying house in Canada help
Originally Posted by Posidrive
Nope, I was shown around each of them by a realtor
most realtor won't show you them as they figure it's a waste of their time |
Re: Buying house in Canada help
Originally Posted by WorldWeary
Buying/selling a house in Canada is a simple process.
Once an offer has been accepted, the house is sold. They seller cannot continue to talk to other potential buyers. Nor can any Real Estate Agent. It is a done deal. Period. Think of it this way, you have bought a house and you have to find a way to pay for it. What you do with your existing house is of no interest to the seller unless you did indeed have a clause in the contract that says the deal is off it you can't sell your house. . Think about the position it puts them in. It may be common in the UK but in Canada the thinking of the seller would be, ' why would I tie myself in to that when I can find another buyer who is not attaching that condition to their offer?' . . Another percentage do make an offer before having their own house sold and plan to use bridge financing if their house doesn't sell in time. Obviously they have to know beforehand that they can get the bridge financing. Where 'house chains' fall through in the UK it is because of this 'get out' clause obviously. . If you make an offer and it is accepted and you then refuse to go through with the deal, it is not only a matter of perhaps losing a deposit, you may well be sued by the seller. Not true, most offers are subject to conditions, some major and some minor but if these conditions are not met you can back out of buying. What makes things work in Canada is bridge financing Bridge financing (bridging loan) has been around in the UK for decades. A large percentage of buyers in Canada do not put an offer on a house until they know they have their house sold to someone Again, not true. Offers subject to arranging finance/mortgage approval are commonplace They won't sell it to someone with a 'get out' clause since it would put them in the same position. Yet again, not true. The vast majority of offers are subject to conditions, which is a "get out clause. |
Re: Buying house in Canada help
Originally Posted by Posidrive
Nope, I was shown around each of them by a realtor
If a property is listed on MLS, it is ON the market. |
Re: Buying house in Canada help
Everything is done subject to conditions, for example subject to a good well flow rate or bacterial report, subject to financing being arranged, subject to home inspectors report etc etc.
I see no reason not to put in an offer with a "subject to" clause regarding disposal of your own home, either the seller accepts it or they dont. so you've not much to lose IMO. FWIW the house I live in now was "sold subject to.." when we looked at it. The other buyers financing fell through, and we put in a low offer as we suspected the sellers were keen to move ASAP. Worked out well for us. The only other thing is in Ontario at least you have to stump up a few hundred as a deposit at the time the offer goes in... not much in the great scheme of things, but enough to deter nuisance offers. How wise it is to rush into buying that dream home is another thing. I suspect there are a lot of dream homes out there, and if this one passes you by another will be along later on when you are in a stronger bargaining position. Hard to put the breaks on though once you start the ball rolling. Remember if you do get it, you will have to pay property taxes, heating (to prevent freezing over the winter) maintainence / snow clearance, insurance etc all on top of UK expenses until you can relocate out here. |
Re: Buying house in Canada help
Originally Posted by WorldWeary
Posidrive, I have never heard of a right of first refusal in Canada. An offer is either accepted, rejected or signed back with a counter offer. That's it. The buyer and seller either come to agreement or don't.
Example: It is 6pm on a Tuesday evening. You advise your Real Estate Agent that you wish to make an offer on my house. I am asking for 100k and after discussion with your agent you decide to offer me 90k. Your Agent writes up a legally binding Offer to Purchase. He then arranges to meet me and my agent to present the offer. He meets us at my house at 7pm. (Generally your offer has a time clause in it. You don't want me to have time to perhaps get another interested buyer. So you make an offer good only until midnight tonight.) Your agent either waits in another room or outside in his car while my agent and I discuss your offer. I decide not to accept or reject outright but to 'sign it back'. I sign it back (on the same piece of paper) at 97k. My agent then gives it to your agent and tries to convince your agent that it is the best deal you are going to get. Your agent returns to you to discuss my counter offer. It's now 8pm. This process of offer/counter offer goes back and forth until either you decide not to make another offer or I decide not to make a counter offer and reject your offer outright. The point is, that a decision gets made within a finite period of time. Once an offer is on the table the potential buyer has no intention of coming back tomorrow and perhaps letting other buyers get in the door in the meantime. If as a buyer you cannot get acceptance of your offer at some point, you walk away. End of story. |
Re: Buying house in Canada help
Originally Posted by psb182
most realtor won't show you them as they figure it's a waste of their time
If he didn't show you round those 3 no hopers then you would have gone to someone else who would have and he would have been $6000 out of pocket. |
Re: Buying house in Canada help
Originally Posted by andy_sheila
"If you make an offer and the seller accepts it, you are legally bound to buy it. Period."
Not true, most offers are subject to conditions, some major and some minor but if these conditions are not met you can back out of buying. What makes things work in Canada is bridge financing Bridge financing (bridging loan) has been around in the UK for decades. A large percentage of buyers in Canada do not put an offer on a house until they know they have their house sold to someone Again, not true. Offers subject to arranging finance/mortgage approval are commonplace They won't sell it to someone with a 'get out' clause since it would put them in the same position. Yet again, not true. The vast majority of offers are subject to conditions, which is a "get out clause. |
Re: Buying house in Canada help
Originally Posted by iaink
Everything is done subject to conditions, for example subject to a good well flow rate or bacterial report, subject to financing being arranged, subject to home inspectors report etc etc.
I see no reason not to put in an offer with a "subject to" clause regarding disposal of your own home, either the seller accepts it or they dont. so you've not much to lose IMO. FWIW the house I live in now was "sold subject to.." when we looked at it. The other buyers financing fell through, and we put in a low offer as we suspected the sellers were keen to move ASAP. Worked out well for us. The only other thing is in Ontario at least you have to stump up a few hundred as a deposit at the time the offer goes in... not much in the great scheme of things, but enough to deter nuisance offers. How wise it is to rush into buying that dream home is another thing. I suspect there are a lot of dream homes out there, and if this one passes you by another will be along later on when you are in a stronger bargaining position. Hard to put the breaks on though once you start the ball rolling. Remember if you do get it, you will have to pay property taxes, heating (to prevent freezing over the winter) maintainence / snow clearance, insurance etc all on top of UK expenses until you can relocate out here. |
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