Step one: Find the areas of Canada and properties that interest you
Unsurprisingly, most people will look online as their first port of call to help them find their dream property in Canada. There are several property portals and specialist real estate agents’ websites for you to choose from. It’s a good idea to set aside budget and time for a trip over to Canada to explore the area, or areas, where you are looking to buy, to visit the local real estate agents to see what is on offer and to peruse the local papers and magazines. This gives you a much stronger picture of the areas you are considering, the types of property available to you, and the way that various real estate agents work in Canada and the local region.
Step two: Make sure all money matters in order
Once you’ve found the right property for you, you will need to make sure that all your finances are in place. There are several areas that need to be planned in advance.
Mortgage or cash buyer?
First, how do you plan to pay for the property: will you be paying cash, or do you need a mortgage? What kind of mortgage do you need? Or, if you are buying with cash, do you have written proof of funds to show you can afford to buy the Canadian property outright?
Have you planned for legal and agency fees?
Do you also have the budget to cover the additional costs that will arise, such as legal and agency fees? These should always be incorporated into your budget at the outset.
What else do you need to pay for?
Is there anything specific you need for purchasing a property in Canada? For example, are you planning to move permanently, in which case, you need to consider removal costs and the cost of setting up all your utilities at the new property.
All insurances required for the property, whether you are planning to live there yourself, or rent out to holidaymakers, must also be factored into your budget.
Knowing how the constantly fluctuating exchange rates affect all the costs listed above is critical in successful planning for your Canadian property purchase. Factor in the difference in the price of the property according to the Canadian Dollar exchange rate and talk to a currency expert, such as Halo Financial to make sure you make the most of any payments you need to make between Canada and other countries. It all adds up significantly when making larger payments, such as those involved in buying a property or emigrating, so you need to consider this carefully and protect your money against moving markets.
Step three: Visit a range of properties and the local area
Once you have found some properties that you like, whether this is online or in person, then it’s a good idea to spend some time exploring these different Canadian properties and making sure they suit everything you need.
While you are visiting these neighbourhoods and specific properties in Canada, you can also spend some time speaking to those who already live in the area, to find out what it’s really like and whether it’s right for you.
Consider the cost of visiting properties and look at any currency exchange implications on these costs. Can you easily afford to visit multiple times?
Step four: Make an offer
Once you know that your finances are in place, you can work with an expert independent solicitor to make an offer. Your estate agent will be able to negotiate the best offer for you during this process, and your solicitor can explain everything to you in full, in terms of legal requirements.
We recommend asking your solicitor to summarise your key points for the purchase in writing for the vendor, as this will ensure there is less chance of any misunderstandings as you move further through the process.
Estate Agents and viewing properties
Your step-by-step guide to successfully and safely purchasing property in Canada
Step five: Do your due diligence on the property
It’s really important to have a survey and building inspection of your new property as soon as you can. Make sure that you engage the services of a regulated specialist to carry out this inspection. If any significant problems are found, you can usually pull out of the purchase without incurring any financial damages, or you can potentially renegotiate your offer price.
Step six: Pay the deposit
At this point, you will usually need to pay a deposit of at least 10% of the property price, depending on your mortgage agreement (if any), and sign a contract that confirms the closing date. Once this has been signed, you cannot withdraw from the purchase without incurring some financial risk.
Step seven: Completion
Time to organise relevant insurance policies and pay any property taxes that are required. For any tax matters to do with purchasing your Canadian property, we recommend speaking to a tax professional in Canada.
Within 60 to 90 days of your original offer, your solicitor will confirm the balance needed to pay along with any additional costs. On this date you will present these additional funds and sign the completion contract. If you are unable to be there on this date, you can appoint power of attorney, usually your solicitor, to do this on your behalf – but this must be organised in advance. You will then be able to receive the keys to your new home!
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