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MortgageResource.ca represents an investment by leading industry professionals in a culture of education, collaboration, and innovation.  If you are not a mortgage originator, but have a close working relationship with one (e.g., lawyer, realtor, home inspector, real estate appraiser, insurance provider), you no doubt play a vital role in the mortgage industry.  Your input to the website’s social media will make a great contribution and benefit the consumers’ experience.

Key Advisors

Purchasing a home is likely the most money you will ever spend at one time and the process involves working with a few trusted advisors, including a mortgage originator.  Most all of the key advisors you will work with are regulated by government legislation or self-regulatory bodies which have strict full disclosure requirements.  Full disclosure requirements are meant to protect you from making an uninformed decision.  Any advisor looking out for your best interest will have nothing to hide and is 100 per cent compliant with the full disclosure requirements.

Over the course of buying a home and moving in, you will likely employ the services from the following key advisors:

1. Mortgage Originator
2. Realtor
3. Lawyer
4. Home Inspector
5. Real Estate Appraiser
6. Insurance Provider

You probably already have a good understanding about mortgage originators.  If not click here to learn more.  However, it is no accident that they top of the list.  Without exception, the very first thing you should do is get yourself pre-approved.  Whether you own a house already or you are buying your first home, this is the first step you should make and your mortgage originator is there to do the work for you.  Click here to learn more about the importance of getting pre-qualified.

The following details a little more about the key industry associates you will likely work with:

Realtor

Your Real Estate Agent is likely the next key advisor you will work with once you are pre-approved for a mortgage.  No one will play a more important role in helping you find a home than your real estate agent. Your real estate agent’s job is to:

1. Help you find the perfect home
2. Write an Offer to Purchase
3. Negotiate on your behalf to get you the best possible deal.
4. Provide you with important information about the community, help you arrange and coordinate a home inspection and essentially save you time, trouble and money.

When the time comes to select a real estate agent, see if you can, get a referral from someone you know and trust and who has had experience with the person he/she is recommending.  Your mortgage originator can also be a good source.  There are even good websites like www.goodrealestateagents.com to help you choose.  You can also use this website and interact with the professional realtors who signed up to help educate you.  Click here to see our directory of Industry Associates, and filter the list by Realtor.

Don’t be afraid to ask questions – especially about any possible service charges.  Vendors normally pay a commission to the agent but some agents charge buyers a fee for their services.

If you would like to know more about a real estate agent’s ethical obligations, you can visit the Canadian Real Estate Association’s website at www.crea.ca or call your local real estate association.

Lawyer

You need a lawyer (or a notary in Quebec) to protect your legal interests, such as ensuring the property you are thinking of buying does not have any building or statutory liens or charges or work or clean-up orders associated with it.  He or she will review all contracts before you sign them, especially the Offer (or Agreement) to Purchase.  Having a lawyer/notary involved in the process will give you peace of mind and ensure that things go as smoothly as possible.

Law associations can refer you to lawyers who specialize in real estate law.  In Quebec, contact the Chambre des notaires du Québec for the names of notaries specializing in real estate law.

Lawyer/notary fees depend on the complexity of the transaction and their experience.  For instance, if you are buying a condominium, you will want a lawyer/notary experienced in condominium transactions.  It is always a good idea to shop around for rates.  Remember that a lawyer/notary:

• Should be a licensed full-time lawyer/notary.
• Should be local and understand real estate laws, regulations and restrictions.
• Should have realistic and acceptable fees.
• Should be able and willing to explain things in plain language.
• Should be experienced with condominiums (if you are purchasing a condominium).

Home Inspector

You should consider having any home you are thinking of buying — whether it is a resale home or a brand new home – inspected by a knowledgeable and professional inspector.

An inspection by a home inspector is a visual inspection.

The home inspector’s role is to inform you about the property’s condition.  The home inspector will tell you if something is not functioning properly, needs to be changed or is unsafe.  You will also be informed of repairs that need to be made and maybe even where there may have been problems in the past.

Every inspection should include a visual assessment of at least the following:

• Foundation
• Doors and windows
• Roof and exterior walls
• Attics
• Plumbing and electrical systems (where visible)
• Heating and air conditioning systems
• Ceilings, walls and floors
• Insulation (where visible)
• Ventilation
• Septic tanks, wells or sewer lines (if inspector is qualified)
• Any other buildings such as a detached garage
• The lot, including drainage away from buildings, slopes and natural vegetation
• Overall opinion of structural integrity of the buildings
• Common areas (in the case of a condominium/strata or co-operative)

There is presently no mandatory certification and no legislated requirements for home inspectors to take any courses or to have passed any tests.  Anyone can say that they are a home inspector.  However, a good home and property inspector generally belongs to a provincial or industry association.  CMHC does not recommend or endorse any individual home inspector or association.  CMHC supports national standards of competency for home inspectors.  For more information about the home inspection industry’s voluntary National Certification Program, visit the National Certification Authority’s website at www.nca-anc.com.

Home inspector fees are generally in the $500 range and depend on the size and condition of the home.

Real Estate Appraiser

Having an independent appraisal done on a property before you make an offer is a good idea.  It will tell you what the property is worth and help ensure that you are not paying too much.  Your lender can also ask for a recognized appraisal in order to complete a mortgage loan.  Just make sure the appraiser you choose is on the “approved list of appraisers” for the lender you are going with.  Your mortgage originator will see to this.

The appraisal should include an unbiased assessment of the property’s physical and functional characteristics, an analysis of recent comparable sales and an assessment of current market conditions affecting the property.

Appraisal fees may vary but you should not pay more than $200 – $350 in most areas for a typical single-family house.

If your mortgage requires default insurance, you may not need an appraisal, depending on the insurance company used.  If the insurance company does require it, they will pay for it.  If your loan is conventional and does not require the default insurance, you may need an appraisal and the cost is your responsibility.  If your conventional mortgage gets lower than 50% loan-to-value, the lender may not require it unless your mortgage application was approved under an equity program wherein your didn’t have to prove your income.

Insurance Broker

An insurance broker can help you with your insurance needs, including property insurance and mortgage life insurance.  Lenders insist on property insurance because your property is their security for your loan.  Property insurance covers the replacement cost of your home, so premiums may vary depending on its value.

Your lender may also suggest that you buy mortgage life insurance.  Mortgage life insurance provides coverage for your family if you die before your mortgage is paid off.  Remember, mortgage life insurance is optional.  Don’t let anyone tell you otherwise.

Be careful not to confuse property or life insurance with mortgage default insurance, which may be required for high-ratio mortgages (financing above 80% loan-to-value).