When buying your home in Abbotsford, you will sign several contracts including a contract of purchase and sale, mortgage documents and potentially several other documents, depending on the transaction. While it is recommended that anyone making such a large purchase use a legal professional, a first-time buyer should always use a real estate lawyer. Home purchases in the province are generally a “buyer beware” transaction, which means that unless transaction fraud or other unforeseen circumstances arise, you are ultimately responsible for what you purchased.

The Purchase Agreement

Once you decide to make an offer on a home, you will need to submit that offer via a contract of purchase and sale agreement. If the seller accepts your offer, you now have a contract to purchase the property. This document should always list any contingencies, typically described as “subjects”. A contingency is wording that allows you to get out of the contract based on an action or inaction. Contingencies may include:

• Passing an inspection to your satisfaction or having the seller cure the faults.
• The ability for you to obtain financing.
• Adding items you want the seller to do such as leaving appliances behind, removing a broken down shed, repairing the heating unit or replacing worn carpet.

If the seller accepts your offer with the contingencies, you are able to use them to back out of the contract or, alternately, use them to negotiate in your favour. For example, if you ask the seller to replace carpeting, he or she could replace it, or you could work out a deal where the seller gives you a credit against the purchase of the house for the cost of replacing the carpet yourself.

Title Work, Survey and Appraisal

Once you come to an agreement on the purchase price it is important that you carry out your own due diligence on the property. Typically, this will be done by having your lawyer or realtor do a title search to ensure that there are no liens on the property and that the seller holds legal title to the property. Additionally, your lender may require an appraisal, survey or both.

The appraisal lets the lender know how much they will lend on the property. For example, if you find a home for $300,000 and the bank’s appraiser says the property is only worth $230,000, the bank will only lend up to 100 percent of $230,000, and in many cases, lenders require the buyer to put a percentage down, often 25 percent.

The survey lets you and the bank know where the boundary lines are so that you are sure you are purchasing the correct property and that buildings do not encroach on the neighbors’ properties or their buildings on to your property.

Closing

Once you are satisfied with your investigations, you’ll be able to close the transaction. When you first approached your lender, you should have received a good faith statement that showed what you are borrowing and how much that money will cost you, also known as a “Commitment Letter”. The documents you receive just before closing should be close to the good faith estimate, unless your lender contacted you and explained any differences. At the closing, you’ll sign the necessary closing documents, including the mortgage, and if all items are in place the lender will advance the money, the transfer will be registered in the land titles office and you will then receive the keys for your new home.

If you are thinking about a home, you should enlist the services of a qualified real estate lawyer to help with the contracts and legal aspects of your purchase.

Sources

• Real Estate Council of British Columbia – Buying a Home in British Columbia
• Real Estate Board of the Greater Vancouver – Buying costs