Things you should know when purchasing residential real estate
Usual deposit is 10% of sale price - Please note for persons who are planning
on borrowing from the NHT or a Building Society which offers, say 95% financing, this does not mean that you can only deposit
5% since this is not sufficient to pay transfer tax and stamp duties. You might wonder then "what chance would
i get of borrowing 95% if the deposit is more than 5% ?". The answer is quite simple. These institutions can lend you
your closing costs which are in addition to the purchase price. If you do not require a loan for closing costs you may
be refunded a portion of what you paid out of your pocket.
committing yourself to buying, that is signing a Sale Agreement, make sure you can afford the mortgage you will be seeking.
To do this you should have a sit-down with your proposed Lender and discuss with them your eligibility for a loan and the
amount. Infact some Building Societies have an online service which allows you to calculate your loan candidacy based
on your income and expenses. Armed with that knowledge you will more or less avoid the many problems that may occur
if you are unable to access loan financing such as the forfeiture of a portion of your deposit.
In addition to the purchase price please budget for closing costs. What
are these? They include your half contribution to Stamp Duty, Registration fees and cost of the Agreement. Most lending institution
will also require of you to pay a processing fee as a condition for approving your loan as well as their Attorney's cost in
registering mortgage on title. The fees vary from one institution to the next.
If you are borrowing be prepared to wait between 90 and 120 days before you get your keys. If
purchasing cash this time can be reduced to about 60 days.
all cash purchasers you may be tempted to just pay for the property without more. Dont ever do that until you have done a
Surveyor's Identifcation Report which will tell you two very important things. First - whether the property you are buying
relates to the title referred to in the Agreement. Second - whether there are any restrictive covenant breaches or encroachments.
As well you must not pay over funds directly to anyone other than an Attorney-at-Law or a reputable real estate agent unless
you are otherwise instructed by your Lawyer. We have seen several sorry and quite reprehensible examples of the disaster
that can occur if you do otherwise. And we certainly would not want you to lose your hard earned money.