Purchasing your first home can be like putting a puzzle together. You may not know where to start off at first. But as you become informed, all of these small and critically important questions will begin to come together. Here are a few questions you may have not considered as a first-time homebuyer:
Do I have to sign a buyer representation agreement?: the answer is: No—you don’t need to sign a buyer representation agreement (BRA) with a brokerage. But you should consider its benefits. A BRA defines the representation between the buyer (you) and the real estate brokerage you are working with, including the broker or salesperson. It sets out the property and geographic location for your new potential home, lists the services to be provided, addresses the issues of the commission that may be payable to the brokerage and it also specifies the duration of the agreement. Signing a BRA confirms in writing that you are a client of the brokerage and documents the terms and obligations of the brokerage-client relationship. As a client, the brokerage has a special responsibility called a fiduciary duty, to follow your instructions, protect your confidential information and promote and protect your best interests. To avoid misunderstandings later on, it’s important to list all details in writing. You should also ask what the broker or salesperson expects from you and what your obligations are. If you’re not comfortable with the terms BRA, you can enter into a Buyer Customer Service Agreement with the brokerage. In this scenario, the brokerage will not have to promote and protect your interests, but they will still be obligated to act fairly, honestly and with integrity, and provide conscientious service. A brokerage can choose to decline your business if you choose not to enter into a BRA.
Do I have to be pre-approved for financing to make an offer on a home?: the answer is No—you don’t need to be pre-approved but getting a pre-approval for a mortgage is a good idea since it will let you know how much you qualify for, and will help ensure you look at properties you can afford. Pre-approval may also provide you more flexibility to more quickly when you do find the perfect home. Your registered real estate professional can be a good resource to help you budget not only for the purchase price of the home, but all of the additional expenses that come with home ownership.
How do I know what government programs and rebates I qualify for?: There are several government initiatives available to help first-time homebuyers. Eligibility depends on a number of criteria, so it’s a good idea to talk to your real estate agent to determine whether you qualify. Some of the programs are:
- The Home Buyers’ Plan (HBP): is a federal program that allows first-time homebuyers to withdraw funds from an RRSP to help pay for the purchase. Under the HBP, you can withdraw up to $25,000 to use towards a home. If your spouse also qualifies, they can also withdraw $25,000, for a total of up to $50,000.
- First-time Home Buyers’ Tax Credit (HBTC): is a tax credit that you or your spouse may be able to claim on your annual income tax return. For more details, visit www.cra-arc.gc.ca
- In Ontario, the provincial government collects a Land Transfer Tax. You may receive a refund for part or all of the tax. To learn more, visit www.fin.gov.on.ca.
As your home-buying puzzle begins to take shape, don’t be afraid to ask questions or seek out resources.
Source: Toronto Star
CENTURY 21 Miller Real Estate Ltd.
Brokerage Independently Owned and Operated
#4 Office in Canada
By Production CENTURY 21 Canada 2013
467 Speers Road,
Oakville, ON L6K 3S4