COMMITMENT
As your agent,
WHY SHOULD YOU
SIGN A BUYERS
REPRESENTATION
AGREEMENT
DETERMINING
YOUR BUYING
POWER
THE BUYING
PROCESS
I will make myself available to show you all the properties that meet your criteria.
Answer all of your questions about the local market, including schools and neighbourhood
services.
Negotiate the best price and terms for your new home.
Help to guide you in the right direction towards finding a competitive mortgage rate. I will also
provide you a list of certified home inspectors and real estate lawyers,
I will help you through the process of finding the perfect home and then ensure that it closes
with the least amount of stress to you.
CLOSING COSTS:
THE BUYER
PROFESSIONALS TO
HELP YOU
Yvonne O’Hara
YVONNE O’HARA
Sales Representative
1251 Yonge Street Toronto, Ontario
M4T 1W6
P: 416.928.6833
F: 416.928.2156
WHY YOU SHOULD SIGN A BUYER REPRESENTATION
COMMITMENT
WHY YOU SHOULD
SIGN A BUYERS
REPRESENTATION
AGREEMENT
DETERMINING
YOUR BUYING
POWER
THE BUYING
PROCESS
An Explanation of Representation: Buying a home can be a difficult task and therefore utilizing the services of a
Realtor is almost a necessity. However, it’s important to understand what type of relationship you have with
your Realtor in order to ensure you receive the type of service you expect. When buying, there are really two
types of Agreement that you will need to consider, the Buyer Representation Agreement and the Buyer
Customer Service Agreement. Buying a home is no small matter. Besides being the largest financial transaction
you may ever undertake, it’s probably also the most complex. There are many good reasons to work with a
qualified Real Estate Professional.
Buyer Representation Agreement: The Buyer Representation Agreement is essentially what you sign when you
want an Agent (Sales Rep.) to work on your behalf during the transaction. You are considered a Client and the
Agent commits to you and to representing your best interests throughout the process. At the same time, you are
committing to working with that Agent. Having one person working for you and looking after your needs is
always preferred over using multiple Agents. It not only allows you to build a relationship, but allows the Agent
to better understand you and exactly what your needs are. In the contract, there are certain elements that must be
determined by the Buyer and the Agent. These elements are included for the benefit and protection of both
parties. A brief explanation of each is listed below.
Time Period: The length of time for which the Agreement will be in effect.
CLOSING COSTS:
THE BUYER
Property Type: This refers to the type of property you’re hoping to buy. Generally this will be a home, cottage
or vacant land. In any case the description is usually fairly general with the term “Residential” commonly being
used.
PROFESSIONALS TO
HELP YOU
Geographic Location: This can be a somewhat vague or a very specific description. It is used to limit the area in
which the agreement is binding. It enables you as the Buyer to utilize the services of another Agent if you
decide to purchase in different area
Commission: This is possibly the most confusing part of the Agreement. As a Buyer, you usually will not have
to pay any commission to anyone as it will come from the Seller’s proceeds of the sale. There are two instances
where you may have to pay commission to your Agent. On the agreement there is a section that indicates the
amount of commission the Agent is to be paid. Generally this amount coincides with the amount the Seller
indicates on the Listing Agreement. However, if there is a deficiency between this amount and the one posted on
the listing agreement, you may be required to make up the difference. This rarely happens and your Agent must
notify you of the situation before you make an offer on a property. The other instance would be if you violated
the agreement and purchased a property through another Agent in the area the Agreement was meant to
represent, or you bought privately. You would then be liable for the total amount of commission owed to the
Agent with whom you had signed the Buyer Representation Agreement.
(Continued)
YVONNE O’HARA
Sales Representative
1251 Yonge Street Toronto, Ontario
M4T 1W6
P: 416.928.6833
F: 416.928.2156
WHY YOU SHOULD SIGN A BUYER REPRESENTATION
COMMITMENT
WHY YOU SHOULD
SIGN A BUYERS
REPRESENTATION
AGREEMENT
DETERMINING
YOUR BUYING
POWER
THE BUYING
PROCESS
CLOSING COSTS:
THE BUYER
PROFESSIONALS TO
HELP YOU
Holdover Period: This is a specific period of time, usually at least 90 days, that states that if, once the agreement
has expired, you enter in to an agreement to purchase a property within that holdover period, either privately or
through another Agent, and that property was introduced to you by the Agent you originally had the
Representation Agreement with, you are liable to pay the full amount of commission to that Agent. When you
enter in to a Buyer Representation Agreement, the Agent is governed by a strict Code of Ethics and legal
contractual obligations to ensure all parties are treated fairly and with the highest possible level of service. This
is also deemed to be a “Fiduciary Relationship” and accordingly, there are fiduciary duties that an Agent owes
to his or her Clients.
Accountability: The Agent must maintain accurate record keeping and upon the clients request, the Agent must
provide details of all funds held in trust and all monies handled on behalf of the client.
Confidentiality: The Agent must not use any information received from the client in a way that may harm or
negatively affect the client with regard to the transaction.
Competence: The Agent must maintained a sufficient level of knowledge and skill in order to carry out the
required duties as well as exercise a degree of care and professionalism that could be expected from the average
person in that field.
Good Faith/Full Disclosure: The Agent is required to disclose any direct or indirect personal interest they may
have regarding a transaction and must not let any personal interest conflict with the performance of their
duties. The Agent must also disclose any known relevant and material information that may affect the value or
desirability of a property to the client.
Loyalty: The Agent must at all times place the interests of the client above all else except the law and is
obligated to act solely in the best interests of the client.
Obedience: The Agent is under a duty to follow the clients’ lawful instructions regarding a transaction whether
the Agent agrees with them or not.
When you sign a Buyer Representation Agreement, it is a legally binding contract between the two parties and
both are bound by it until its completion or expiration. A good Agent will always allow you to cancel the
agreement at anytime if you are not satisfied with the service they are providing. But then again, if they’re a
good Agent, you should have no reason or need to cancel the contract!!
YVONNE O’HARA
Sales Representative
1251 Yonge Street Toronto, Ontario
M4T 1W6
P: 416.928.6833
F: 416.928.2156
DETERMINING YOUR BUYING POWER
COMMITMENT
WHY SHOULD YOU
SIGN A BUYERS
REPRESENTATION
AGREEMENT
DETERMINING
YOUR BUYING
POWER
THE BUYING
PROCESS
CLOSING COSTS:
THE BUYER
PROFESSIONALS TO
HELP YOU
The process of buying a home or investment generally starts with determining your buying
power—in other words, taking into consideration your financial reserves plus your
borrowing capacity.
Obtaining a mortgage pre-approval from a licensed mortgage professional or lender is a
wise step in accurately determining your true buying power. With a pre-approval, a
mortgage professional can conduct a more complete verification prior to sending you
shopping for a home and, with that task completed, the dollar figure you are going
shopping with is the actual amount you can spend.
Mortgage professionals can lock in an interest rate—ranging from 30 to 120 days
depending on the lender and mortgage product best suited for your unique needs. By
locking in an interest rate, you are guaranteed to get a mortgage for at least that rate or
better. If interest rates drop, your locked-in rate will drop as well. And if the interest rates
go up, your locked-in interest rate remains secure—ensuring you get the best rate
throughout the mortgage pre-approval process.
In order to get pre-approval, a mortgage professional requires a short list of information
that will enable them to determine your buying power, including information about your
available savings, income and current debt.
A mortgage professional will explain the benefits of shorter or longer mortgage terms, the
latest programs available, which mortgage products they believe will best meet your need
and they will review all of the other costs involved with purchasing a home.
Getting pre-approval for a mortgage is something every potential homebuyer should do
before going shopping for a new home so you understand your true buying power. A preapproval will give you the confidence of knowing that financing is available, and it can put
you in a very positive negotiating position against other homebuyers who haven’t been
pre-approved.
YVONNE O’HARA
Sales Representative
1251 Yonge Street Toronto, Ontario
M4T 1W6
P: 416.928.6833
F: 416.928.2156
THE BUYING PROCESS
COMMITMENT
WHY SHOULD YOU
SIGN A BUYERS
REPRESENTATION
AGREEMENT
Buying a new home is an exciting event! With the proper guidance, you will find yourself in a
home that fits your needs and your budget.
Here are the key steps in the process:
•
Find a great agent!
•
Get pre-qualified for a mortgage—Sit down with your banker or a mortgage broker to
discuss financing options. They will establish your financing comfort zone, enabling you
to focus on properties that you can afford.
•
Establish your search criteria with the help of your agent. Determine your wish list in
terms of location and features (number of bedrooms, baths, etc.).
THE BUYING
PROCESS
•
Your agent will then search the MLS® system to find properties that match your needs.
Your agent will arrange to show you desirable properties at your convenience. Your agent
has access to all available properties, including those listed with other companies.
CLOSING COSTS:
THE BUYER
•
Once you find a property that you want to buy, your agent will prepare an offer that meets
your needs in terms of price, closing date and other critical issues.
PROFESSIONALS TO
HELP YOU
•
Your agent will present the offer on your behalf, and will negotiate an agreement with the
seller that is acceptable to you.
•
Once the deal is made, you will pick a lawyer to handle the closing of the purchase.
Typically the closing date is 60 to 90 days after the deal is made. The closing date is one of
the key terms that is negotiated for you. Your agent will coordinate the closing process
with the lawyer you choose.
•
Prior to closing, you will arrange for a moving company, and you will also arrange for
telephone, heating and electrical service for your new home.
•
Your lawyer will handle the closing process for you, and on the closing date will arrange
with the seller’s lawyer to get you the keys to your new home!
DETERMINING
YOUR BUYING
PROCESS
YVONNE O’HARA
Sales Representative
1251 Yonge Street Toronto, Ontario
M4T 1W6
P: 416.928.6833
F: 416.928.2156
CLOSING COSTS: THE BUYER
Here is a list of the expenses typically incurred by a buyer of residential property:
COMMITMENT
WHY YOU SHOULD
SIGN A BUYERS
REPRESENTATION
AGREEMENT
•
Legal fees: Lawyers’ fees vary. It is an issue for each buyer to raise at the time he/she
engages the lawyer to close the deal.
•
Land Transfer Tax: This is a sales tax charged by the provincial government, The
formula use to assess the tax is as follows:
•
•
•
•
DETERMINING
YOUR BUYING
POWER
THE BUYING
PROCESS
CLOSING COSTS:
THE BUYER
PROFESSIONALS TO
HELP YOU
0.5% of the first $55,000.00 of the purchase price,
1.0% of the next $195,000.00 of the purchase price,
1.5% of the next $150,000.00 of the purchase price, and
2.0% of the balance of the purchase price (for residential properties).
•
Sales Tax on Chattels: Buyers are required to pay the HST value of any chattels (fridge,
stove, etc.) included in the purchase price.
•
Property Inspection Report: Before you buy a property, it is wise to have it inspected by
a qualified professional property inspector. The inspector will provide you with a
written report. Such inspections cost $350.00 or more, depending upon the inspector
and the size of the property.
•
Mortgage Financing Fees: Many mortgages companies charge appraisal and processing
fees. These fees can be several hundred dollars. If you are borrowing more than 75% of
the property’s value (“high ratio financing”), there will be mortgage insurance
premiums added to the face amount of the mortgage, including the HST.
•
Discharge Penalties: If the buyer is discharging a mortgage on the property he/she is
selling, there may be early discharge penalties amounting to three months interest on
the mortgage to be discharged. Other penalties may be imposed depending upon the
terms of the contract. The mortgage company may be prepared to waive all or part of
the early discharge penalty if the buyer agrees to mortgage the new property with the
same mortgage company.
(Continued)
YVONNE O’HARA
Sales Representative
1251 Yonge Street Toronto, Ontario
M4T 1W6
P: 416.928.6833
F: 416.928.2156
CLOSING COSTS: THE BUYER
•
Survey: You may want a new survey, or your mortgage company may require one in
order to advance the mortgage funds. Surveys start at about $900.00. The price goes up
depending upon the size and configuration of the property.
•
Title Search: Most mortgage lenders are prepared to accept title insurance instead of a
survey. A Title Insurance Policy costs about $250.00-$300.00 for most residential
properties. The fee will vary to some extent with the value of the property.
•
Disbursements: When your lawyer closes the purchase, he/she will have to pay a
variety of expenses for you. He/she will add these costs to the bill he/she sends you.
Such disbursement costs include fees for registering the deed and mortgage, building
and tax certificates, hydro and water status reports, etc. On a standard residential
purchase, these costs will run between $300.00 and $500.00.
•
Adjustments: The annual real estate taxes will be apportioned to the seller and the
buyer as of the date of closing. If the seller has prepaid the taxes for the year, the buyer
will be required to reimburse a pro rata portion to the seller. If the property is heated by
oil, the buyer will be required to reimburse the seller for the value of the oil remaining
in the storage tank on closing. The buyer’s lawyer arranged for these adjustments with
the seller’s lawyer as part of the closing process.
•
Moving Costs: Moving costs vary depending upon the distance moved and the weight
and volume of possessions moved. It is wise to get an estimate from more that one
mover. It is also wise to book your mover well in advance of closing.
•
Insurance: You will need property insurance and occupier’s liability insurance. Contact
an insurer well in advance of closing in order to ascertain the costs, and to have the
policies in place at closing.
COMMITMENT
WHY YOU SHOULD
SIGN A BUYERS
REPRESENTATION
AGREEMENT
DETERMINING
YOUR BUYING
POWER
THE BUYING
PROCESS
CLOSING COSTS:
THE BUYER
PROFESSIONALS TO
HELP YOU
(Continued)
YVONNE O’HARA
Sales Representative
1251 Yonge Street Toronto, Ontario
M4T 1W6
P: 416.928.6833
F: 416.928.2156
CLOSING COSTS: THE BUYER
•
Condominium Purchase: There are some special costs involved with a condominium
purchase. For example, you will want a Status Certificate, which includes all important
documents concerning the financial affairs of the condominium corporation, as well as
the by-laws and the rules that owners are required to abide by. The Status Certificate
costs $100.00, plus photocopying. Also, a condominium owner pays a monthly
maintenance fee to the condominium corporation. This fee will be apportioned between
the seller and buyer as of the date of closing.
•
Rental Property Purchase: If you are buying a tenanted property, and prepaid rents will
be accounted for as part of the closing process. If the seller has collected the last
month’s rent, which is standard, you will be credited with that sum on closing.
•
Rural/Recreation Properties: There are a number of issues that must be canvassed by
buyers of rural/recreational properties. They include water quality and quantity, the
condition of the septic system, road access, and availability and cost of municipal
services (e.g. garbage collection, schools, bussing, road maintenance). All such issues
need to be investigated fully at the time of purchase. Some of these investigations will
cost money. For example, you may be required to pay a fee for the water quality and
quantity tests. Also, if you wish to have a professional assessment of the condition of
the septic system, there will be a fee. You will want to consider all of these issues at the
time you are considering the purchase.
•
New Home Purchases: The biggest extra cost that attaches to new home purchases is
HST. HST is 13% sales tax imposed by the federal government on new homes, as well
as most other goods and services. It is not applied to purchases of resale (“used”)
homes. Many builders include the HST in the purchase price. Make sure that the issue
of who pays the HST is resolved in the Agreement of Purchase & Sale. Read your
contract carefully. There may be additional costs for a wide variety of items, including
paving of the driveway, landscaping, etc. On some new home purchases, the bill for
these “extras” can be thousands of dollars.
COMMITMENT
WHY YOU SHOULD
SIGN A BUYERS
REPRESENTATION
AGREEMENT
DETERMINING
YOUR BUYING
POWER
THE BUYING
PROCESS
CLOSING COSTS:
THE BUYER
PROFESSIONALS TO
HELP YOU
YVONNE O’HARA
Sales Representative
1251 Yonge Street Toronto, Ontario
M4T 1W6
P: 416.928.6833
F: 416.928.2156
PROFESSIONALS TO HELP YOU
COMMITMENT
WHY SHOULD YOU
SIGN A BUYERS
REPRESENTATION
AGREEMENT
DETERMINING
YOUR BUYING
PROCESS
THE BUYING
PROCESS
CLOSING COSTS:
THE BUYER
LAWYERS
HOME INSPECTORS
Jonathan Griffiths
18 Wynford Drive, North York
416.441.1253
Lighthouse Inspection
416.241.6888
David Randeiro
1170 Dundas St W., Toronto
416.588.8000
Neal Roth
401-60 St Clair Avenue East, Toronto
416.351.7684
National Home Inspection
416.467.7809
Guardian Home Inspectors
Terry Carson
416.440.0062
Lorne Shuman
Isenberg & Shuman
5075 Yonge Street
Toronto 416 225 5136
PROFESSIONALS TO
HELP YOU
MORTGAGE
Carrie Bryan
Scotia Bank
416.657.4462
Nikki Taddeo
2489 Bloor Street West, Toronto
416.848.7653 x112
YVONNE O’HARA
Sales Representative
1251 Yonge Street Toronto, Ontario
M4T 1W6
P: 416.928.6833
F: 416.928.2156