You just got the call, they accepted your offer! Woohoo! You jump around for a few minutes but when you calm down you need to realise you are on the clock – you have deadlines to meet or you could lose the house to someone else!
Have your home inspected by a professional, not uncle Bob who once renovated a home! Hire an inspector that is approved by the Real Estate Board (OACIQ Organisme d’autoréglementation du courtage immobilier du Québec). Make sure he is insured. Best way is to ask your Real Estate Broker for a list of inspectors from the area you are purchasing in. These inspectors will know the issues relate to the neighborhood you are buying in, like iron ochre or pyrite.
Have the chimneys inspected, if there is a septic system ensure it is in good working order and have the owner clean it prior to closing. Heating systems should be inspected as well.
Understand that inspections are for you to find out about the house and to verify there is not a major structural defect(s). A building inspection is not done so you can re-negotiate with the owner to fix small issues. In most cases you are not buying a brand-new home, maintenance and small issues are to be expected. What you are on the look out for is major issues that could significantly reduce the value of the property, approximately 2-3% of the value of the property. If something large is found, you have a few choices. You can walk away from the sale, have your broker try to work out a fair price deduction for the work required or have the owner repair the issue.
Make sure you understand the deadlines in the offer. If in your Promise to Purchase you have a delay of 7 days for your inspection, it is 7 days not 7 business days. In Quebec there is no such thing as business days in real estate contracts. On standard OACIQ Promise to Purchase forms there is a second deadline to know about. First, you have the delay to actually do the inspection ie 7 days (whatever time frame you put in the offer), second you have another 4 days fixed to review the report and waive the inspection or render the offer null and void. So, in reality the condition is 11 days total. You must do the inspection within the first deadline (ie 7 days) not the second (4 days).
Should you require more time to bring in other inspectors, the original 7 days can be extended if both parties agree. Do not wait until day 7 ask for an extension because if another offer comes in on the property the owner could just say no to an extension and you are left making a hard decision whether or not to accept a home that might have issues or not.
The deadline will expire itself, meaning if you do not notify the sellers within the allotted time, it is deemed that you have accepted the building inspection and waived the condition.
- Finance Letter
The next phone call you will make is to your mortgage lender, of course you were pre-approved, so this step is easy! Send the mortgage lender the information on the house, as they will now want to approve that the house is worth what you are paying for it. They will require the detailed real estate listing, certificate of location and the full offer with seller’s declaration. The lender will also finalize your personal documents and verify proof of down payment again. Often the lender will spend an appraiser to evaluate the home. This alone is a 2-3-day process and is only done once the lender is satisfied with all other documents. You do not need to be present for the appraisal visit the evaluator will contact the real estate broker directly to arrange a visit. With a deadline of 10-12 days there is no time to dilly doddle!
If you didn’t get pre-approved, get ready to run to find all your paperwork and get it to the mortgage lender. Ask your real estate broker for a referral, even within your own bank as the back-door rates with your brokers contacts are usually better then what you can get through the front door. Time is of the essence so don’t delay. Using your brokers contact, also insures that the broker will be kept informed of any delays or hiccups along the way and can react faster.
The finance condition deadline is set out in the negotiations, if the condition is 7 days for example; the condition starts the day after the offer was accepted as day 1 and ends at midnight on the 7th day. With this condition if buyer has not given proof of financing by the deadline the seller has the choice within in 5 days to make the buyer file for a loan at the seller’s bank or render the offer null and void by written notification.
- Sellers Conditions
The main condition for the seller is providing an up to date Certificate of Location. The Certificate is a map of property with all the buildings on the lot, it states any servitudes or encroachments. A surveyor will take about 3 weeks to make a new certificate so hopefully if the seller requires a new certificate he ordered it when he listed the property. If not, as long as it is ready prior to signing and there have been no changes that effect the titles (ie. Encroachments on a neighbour’s property) the sale can proceed as normal.
If you are buying in the country area there are other conditions in your Promise to Purchase that the Seller is responsible for. Namely having the and septic tank cleaned, and the system verified in good working order. If the property is service from a well the seller will also be responsible to provide proof of potable water. As you have hired an experience real estate broker he/she will be aware of these situations and advice you accordingly.
- Firm Offer!
You made it, you met all your deadlines! Now on to the less stressful steps.
- Hiring a Notary
Again, speak to your Real Estate Broker and get a list of the local notaries. They know the area and can advise you accordingly. The notary will contact your bank and handle the transfer of funds, he will do a title search on the property and work with your real estate broker regarding the documents. Remember in Quebec the notary must have the funds free and clear in their trust account 48 hours prior to the sale. For your down payment, wire transfers are the safest way, as a certified cheque can be held by banks for days.
On your Promise to Purchase you have agreed on a Closing date, the fine print says, ‘on or before’ this means you can sign on the day or a few days earlier. Occupancy remains the fixed date in the offer but signing can be moved forward to comply with everyone’s schedules.
The notary will have you come to his/her office a few days before the transaction to sign your mortgage papers and to go over the sale and adjustments. The adjustments are the balancing act of the municipal and school taxes, propane and/or oil tank, condo fee, basically the fixed costs that are attached to the property. The Seller will have to be up to date on all of his bills and then the notary will charge you the balancing days of the paid bill. For example, if you buy on December 1st you will have to pay the seller the taxes for the month of December as he has already paid the municipality for the month.
- Home Insurance
The mortgage lender will demand that you have property insurance on the home as of the closing at the notary’s. The notary will request a letter from your insurance company before the Title Deeds are signed. Ask the seller who they use for insurance, it might be easier to stay with the same company.
- Little Things
Hydro, make sure you call Hydro and let them know you are moving. There is also the cable company, internet etc… A good thing to do is take a reading of the hydro meter when you first arrive at your new home and give the number to Quebec Hydro to ensure there are no extra charges.
Now you just have to pack everything you own, stick it a truck and meet it at the new house!
**The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.**