Key Players
Contact Ryan Taylor at (604) 551-0401 or [email protected] for a complimentary BUYER'S PACKAGE.
Lenders/Loans Officers
Most lenders will “pre-approve” a buyer for a mortgage and some will even do it over the phone. It costs you nothing to arrange for a mortgage before finding the home you wish to purchase and there is no obligation.
Make sure you know how long the interest rate commitment is good for. Keep in mind, that if interest rates drop, the Lender must give you the lower rate. However, you must take the initiative and follow up on this as Lenders deal in volume and aren’t necessarily concerned about your welfare.
Shop around. All banks, trust companies, credit unions, etc. offer varying terms and options. Find the best deal for you. Credit Unions handle only members but it only costs a nominal fee to join one and sometimes they can offer greater flexibility than banks.
Your loans officer’s experience is important. As in any occupation there are good apples and some, not-so-good apples. If you are unfortunate enough as to engage an inexperienced junior loans officer, you can be sure that your mortgage application process will not go as smoothly as you would wish. The consequences could be either harmful delays or worse. You will find that mortgage lending can vary among branches of the same lending institution. Why? Some loans officers “go by the book” and other, more experienced officers know where and how “to bend the rules” a little. Ask your realtor to recommend a few to you.
Mortgage Brokers
Mortgage brokers can be either independent and represent a variety of banks, trust companies and private lenders or they can be under contract and only represent one or two institutions. Their “office” can often be home-based.
The broker will have you complete an application form and will then “package” it and forward it to a lending institution for approval. Usually, an independent broker will try to find a lender with the terms, conditions and rates that are most advantageous to you. They usually don’t charge a fee for this service as they often receive a “finder’s fee” directly from the lender. However, if you have a poor credit history and are difficult to finance, a broker will probably invoice you for services rendered (usually a small percentage of the mortgage amount).
A mortgage broker is not paid a salary like a loan’s officer. They earn their money through commissions. Most have a great deal of experience and are well qualified to meet your needs.
House Inspectors
Always have a home inspected. For a nominal fee paid by the buyer, an inspector can provide some assurance about the condition of the residence about to be purchased and an approximation of how much it will cost to do repairs. A detailed written report will be supplied.
As inspectors are unregulated in B.C., a buyer would be wise to inquire about the inspector’s qualifications. One needs not attend a university and obtain a degree for this profession. Literally, you, yourself, could be a house inspector tomorrow should you choose.
An inspector should carry “errors and omissions” insurance. It is mandatory that realtors carry this insurance and some day, hopefully, it will be for inspectors too. However, it isn’t a prerequisite now. If an inspector didn’t discover and report a costly repair, then the inspector could possibly be held financially accountable for the cost. His errors and omissions insurance would help defray any charges levied against him.
Ask me for the names of several reputable inspectors.
Builders/Contractors
Make sure that the builder you hire to construct your dream home or renovate your existing one has sound credentials. Ask for references and if possible, visit previous sites he has worked at. If you are buying directly from a developer make sure that he is licensed. A registry of licensed residential builders exists on the Homeowner Protection Office web site at www.hpo.bc.ca. All contracts with a builder should be very specific about all construction details right down to when the job will be completed – in writing of course.
It is imperative that a buyer understand whether or not he/she is protected with warranties and to what extent.
If you choose to deal directly with a developer and not go through a REALTOR, be aware that the pre-printed clauses in the Contract of Sale will be more beneficial to the developer than to you. You should seek independent legal advice before signing a contract to make sure that your interests are safeguarded. Don’t neglect to receive advice with respect to appropriate holdback or deficiency provisions.
Appraisers
The lending institution will, in most cases, want an appraiser to evaluate the home and property you have chosen to purchase. Lenders want to be assured that the value of the security is worth the risk before they advance you a mortgage. Normally, an appraiser does an analysis of recent sales of comparable homes in the area by comparing lot, home size, age, condition, etc.
The buyer will be charged a small fee by the lender for this service. Sometimes, if a buyer has a large down payment, the lender may waive the appraisal requirement.
Sellers will sometimes have an independent appraisal done on their home before they place it “for sale” on the real estate market. Buyers have this option as well. However, the cost of procuring an independent appraisal is far more than what lender’s charge and you may be wiser in the long run to ask your realtor to do a C.M.A. (current market analysis) on the home you have chosen to buy.
Lawyers/Notaries
Shop and compare. A lawyer’s fee to do a conveyance can sharply differ from his/her competitors. The “disbursements” which include such items as title registration, photocopying, messenger service, etc. are usually approximately the same among lawyers as these are basically already “set” costs.
A notary public is not always cheaper than a lawyer and is not formally trained, qualified or allowed by law to provide a legal opinion on any subject matter. Lenders in days gone by wanted their own lawyers to draw up the mortgage documents. Not anymore. Buyers are free to choose any lawyer/notary to do their conveyance, which includes the mortgage document and certificate of title (deed).
There are many excellent lawyers who specialize in real estate law. Ryan can recommend several to you. If you are feeling insecure about your purchase, you can always have your lawyer approve the form of the documentation. The buyer normally pays for all documentation regarding the new mortgage, transfer of title and disbursements and the seller pays for clearing title of all existing financial encumbrances on title, i.e. a mortgage.
Insurance Brokers
Comparison shop, before you buy a home. Brokers offer a wide range of policies and coverage and premiums do differ. Banks are usually more expensive than independents. Property insurance is a must because it covers damage or destruction to an insured property caused by perils such as fire and flood. Your lender will want evidence of your coverage before they advance any mortgage monies, as they want to be assured their loan is secured in this regard. It is important to obtain replacement cost coverage.
Condominiums and townhouses need only to have the “contents” insured. The monthly maintenance fees cover the property insurance for the structure itself.
Mortgage life insurance guarantees that if you die your mortgage will be paid in full. If you can afford it, it provides security for your children and spouse. This insurance can be purchased from your lender and added to your mortgage payments or from an insurance broker who you may find cheaper.
Choosing the "right" representative from the start is key to any smooth and worry free real estate purchase