Home Buying Tips

Transaction and Paperwork Tips

  • Closing Costs

    As a general rule it is best to budget as much as 3-5 percent of the purchase price for closing costs unless there is GST Payable. Closing costs include the Land Transfer Tax, Adjustments, registration of documents, (title transfer, mortgage) insurance, attorney fees, and fees associated with the mortgage itself.

  • Land Transfer Tax

    In Manitoba there is a Land Transfer Tax payable as follows:

    $0-30,000 the rate is 0%
    $30,001-$90,000 the rate is 0.5%
    $90,001-$150,000 the rate is 1.0%

    $150,001-$200,000 rate is 1.5%
    $200,001 an up the rate is 2%

    Plus a $85 registration fee.

  • Adjustments, Property Taxes

    Adjustments are usually calculated based on the possession date so each party is only responsible for their own share. For example property taxes are due on June 30 for the year. Whoever pays the tax in full will receive a credit and vice versa. So if the possession date is Dec. 1, the buyer owes the seller 1 month of taxes.

  • GST

    If you buy vacant land to build your own home or change the original intended use of the land, or if you buy a new never lived in home from a builder then GST will be payable. GST may also apply if you buy a home that has been renovated so extensively that it may be considered practically new. GST is a complicated matter so consult your real estate attorney.

  • How much should I offer for a Deposit?

    The deposit usually accompanies the offer to purchase and it becomes part of the overall down payment. If the buyer defaults on an offer that has all conditions satisfied, the seller generally will retain the deposit. If a condition cannot be satisfied and the buyer backs out the deposit is refunded. $5,000 is a very typical deposit. A larger deposit may be more attractive to a seller in a bidding situation.

  • How much should I offer for a Down Payment?

    The down payment usually determines how much of the purchase will be financed by way of a mortgage and whether mortgage insurance will be required or not (CHMC or Genworth) which in turn triggers a premium as high as 3.35%. Most first time buyers put down 5% of the purchase price. Mortgage insurance is not required for down payments of 25% or higher.

  • Financing Clause

    A financing clause allows the buyer to make the offer subject to obtaining a mortgage. If a mortgage cannot be arranged, the buyer may back out of the transaction and any deposit will be refunded. Even though most buyers are pre-approved and are fairly certain a mortgage can be arranged, it is still prudent to include the financing clause in the offer even if competing with multiple offers.

  • Seller's Property Disclosure Statement Clause

    The SPDS is fairly commonly provided by most sellers ahead of any offers in which case it may be reviewed and omitted from the offer as a condition making it a cleaner and more appealing offer to a seller. Since the SPDS doesn't hold much power, it is generally one of the first conditions waived by buyers in a bidding situation. Otherwise, it doesn't hurt to ask for it.

  • Home Inspection Clause

    Home inspections are also often waived in a bidding situation as a condition of the offer to purchase, but if anticipating multiple bids, a buyer can elect to have an inspection done prior to writing an offer. The cheapest inspection options don't offer much value. They are little more than a visual inspection. The better option though much more expensive is one that includes infrared camera inspection.

  • Survey Certificate & Zoning Memorandum v. Title Insurance

    If the seller cannot provide an existing Survey Certificate and Zoning Memorandum, purchasing Title Insurance is more beneficial in most cases and half the price of a new Survey Certificate and Zoning Memorandum. What's the difference between them? The survey will show you what's supposed to be on the property but won't remedy a problem if it exists. Title insurance will remedy a problem if it arises, but will not identify its existence beforehand.

  • Western Canadian Conveyancing Protocol Closing Benefits

    In Manitoba title transfer takes as long as 6 weeks during which time the funds for the sale are not released to the vendor until the new title is registered. This in its turn causes the buyer to owe interest to the seller for this period of time which can add to the closing costs. The WCCP allows these funds to be released to the seller within a few days of possession. This also makes an offer more appealing to a seller in a bidding situation.

  • Competing Offers Strategy

    If competing against other offers, the cleaner the offer, the more appealing it is to a seller. The higher the price, the more appealing the offer is to the seller and likely to win the bidding war. So what should you offer? The highest number you feel comfortable without feeling like you overpaid, but also feeling okay with not getting the house if someone else outbid you by even as little as $1,000 more.

  • Why work with a buyers agent? Does it cost anything?

    Convenience: You deal with one agent for all your showings.

    Trust: A buyers agent has a number of duties to you as a buyer. Loyalty, duty of care, fiduciary duty are just a few.

    To negotiate on your behalf: A listing agent has a duty to get the best price for the seller. A buyers agent? To get you the best price.

    And not necessarily the best of all, it's Free. After all, the expertise is pricesless.

What you must know before buying a home to make sure you don't overpay or you don't end up with an endless project and a money pit.

Condition of Home & Structure Tips

  • Foundation

    Foundation should be free of cracks both on the interior and exterior. Some small cracks usually around windows are more common. Also, not all cracks are created equal. Horizontal cracks are more serious than diagonal or vertical cracks and are more susceptible to bulging which weaken the structural integrity of the foundation walls.

  • Building Envelope

    The exterior of the home regardless of material (stucco, siding, brick, stone) should be free of cracks and in good condition to prevent any water penetration during heavy rain storms. Also check around windows and doors for any potential leaks. Joints between two different exterior materials can also be susceptible to leaks.

  • Roof

    The roof line should not be sagging and there should be no visible depressions. Shingles should be flat with no visible curling. In the winter the roof should be evenly covered with snow. Ice or melting snow is indicative of heat loss due to poor insulation in the attic. Check for condition of eave-troughs and down spouts.

  • Lot grading and landscaping

    The lot grading should be away from the house so during heavy rains any excess water will drain away from the foundation walls of the house. Also large trees that are located close to the house may have deep roots that can cause foundation, drain and sewer problems.

  • Windows and Doors

    Windows and doors should open and close well. Doors should stay in any open position. Self closing doors may be indicative of uneven settling of the house. Newer windows with two or three sealed gas panes should be free of moisture or staining in between panes. The age of some windows can be found on a manufacturer's stamp in between two panes. Wood frames should be free of rot.

  • Walls and Floors

    Walls and ceilings should be straight and free of cracks though some diagonal cracks at door openings and window corners is common due to shifting over time. Cracks in the ceiling can be caused by water damage which may be indicative of a roof leak, or due to shifting. Floors should be straight and level. Sometimes unevenness can be corrected by adjusting the teleposts in the basement.

  • Electrical Panel and Wiring

    The electrical panel should have some expansion slots available. The electrical service should be 100amps or better. You should check for any live knob and tube wires or aluminum wires. Most insurance companies require upgrades to such wiring. More recent studies failed to find a higher risk of fire associated with knob and tube wiring, unlike aluminum wires which can be a fire hazard.

  • Plumbing

    Plumbing should be at the very least copper or better (pvc, pex, abs). Most insurance companies may require plumbing upgrades to be completed for any galvanized steel, cast iron or lead pipes. Running the water and flushing toilets will identify any water pressure, flow and draining problems.

  • Furnace, AC unit, HRV and Ductwork

    The furnace and AC unit should be sufficiently powerful to service the size of home they're in. Other safety concerns would be any possible cracks in the heat exchanger, and ensuring any exhaust doesn't blow back into the home. Most newer homes will have high efficiency furnaces as well as Heat Recovery Ventilators which helps keep the utility bills down. Check the condition of any visible ductwork.

  • Hot Water Tank

    Hot water tanks can last as long as 15 years though most will likely last half that time. Usually you want to look for signs of corrosion, and perhaps the location of the tank itself to determine any possible damage it may cause when it does burst at the seams.

  • Signs of Moisture and/or mold

    Most signs of moisture and water seepage manifest themselves through evident staining, mineral deposits, rot, rust or mold in the affected areas. Identifying the source of the moisture can determine the extent of the repair needed and the cost to fix the problem. This in turn helps decide whether to make an offer or not based on how easily and/or cost effectively the problem can be solved.

  • Odors

    Many odors are fairly identifiable and recognizable (ie fresh paint, pet odor, smoking, sewer back up), and it becomes a matter of personal preference whether to buy a house or not based on the buyers confidence the odor can be eliminated. Other times it's not so easy to tell just what stinks. For those occasions an indoor air quality test may be in order, but the better option is to walk away.

  • Sump Pump, Back Up Valve

    Check for a sump pump in the basement. Lift the floater to see if the pump will start. If a sump pump is not present there should at least be a back up valve that shuts when water backing up will push the valve up. If possible check to make sure it is not seized in one place and it moves freely.

Change these parameters to reflect your situation

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  • Transaction & Paperwork

    • Closing Costs

      As a general rule it is best to budget as much as 3-5 percent of the purchase price for closing costs unless there is GST Payable. Closing costs include the Land Transfer Tax, Adjustments, registration of documents, (title transfer, mortgage) insurance, attorney fees, and fees associated with the mortgage itself.

    • Land Transfer Tax

      In Manitoba there is a Land Transfer Tax payable as follows:

      $0-30,000 the rate is 0%

      $30,001-$90,000 the rate is 0.5%

      $90,001-$150,000 the rate is 1.0%

      $150,001-$200,000 rate is 1.5%

      $200,001 an up the rate is 2%

      Plus a $85 registration fee.

    • Adjustments, Property Taxes

      Adjustments are usually calculated based on the possession date so each party is only responsible for their own share. For example property taxes are due on June 30 for the year. Whoever pays the tax in full will receive a credit and vice versa. So if the possession date is Dec. 1, the buyer owes the seller 1 month of taxes.

    • GST

      If you buy vacant land to build your own home or change the original intended use of the land, or if you buy a new never lived in home from a builder then GST will be payable. GST may also apply if you buy a home that has been renovated so extensively that it may be considered practically new. GST is a complicated matter so consult your real estate attorney.

    • How much should I offer for a Deposit?

      The deposit usually accompanies the offer to purchase and it becomes part of the overall down payment. If the buyer defaults on an offer that has all conditions satisfied, the seller generally will retain the deposit. If a condition cannot be satisfied and the buyer backs out the deposit is refunded. $5,000 is a very typical deposit. A larger deposit may be more attractive to a seller in a bidding situation.

    • How much should I offer for a Down Payment?

      The down payment usually determines how much of the purchase will be financed by way of a mortgage and whether mortgage insurance will be required or not (CHMC or Genworth) which in turn triggers a premium as high as 3.35%. Most first time buyers put down 5% of the purchase price. Mortgage insurance is not required for down payments of 25% or higher.

    • Financing Clause

      A financing clause allows the buyer to make the offer subject to obtaining a mortgage. If a mortgage cannot be arranged, the buyer may back out of the transaction and any deposit will be refunded. Even though most buyers are pre-approved and are fairly certain a mortgage can be arranged, it is still prudent to include the financing clause in the offer even if competing with multiple offers.

    • Seller's Property Disclosure Statement Clause

      The SPDS is fairly commonly provided by most sellers ahead of any offers in which case it may be reviewed and omitted from the offer as a condition making it a cleaner and more appealing offer to a seller. Since the SPDS doesn't hold much power, it is generally one of the first conditions waived by buyers in a bidding situation. Otherwise, it doesn't hurt to ask for it.

    • Home Inspection Clause

      Home inspections are also often waived in a bidding situation as a condition of the offer to purchase, but if anticipating multiple bids, a buyer can elect to have an inspection done prior to writing an offer. The cheapest inspection options don't offer much value. They are little more than a visual inspection. The better option though much more expensive is one that includes infrared camera inspection.

    • Survey Certificate & Zoning Memo v. Title Insurance

      If the seller cannot provide an existing Survey Certificate and Zoning Memorandum, purchasing Title Insurance is more beneficial in most cases and half the price of a new Survey Certificate and Zoning Memorandum. What's the difference between them? The survey will show you what's supposed to be on the property but won't remedy a problem if it exists. Title insurance will remedy a problem if it arises, but will not identify its existence beforehand.

    • Western Canadian Conveyancing Protocol Closing

      In Manitoba title transfer takes as long as 6 weeks during which time the funds for the sale are not released to the vendor until the new title is registered. This in its turn causes the buyer to owe interest to the seller for this period of time which can add to the closing costs. The WCCP allows these funds to be released to the seller within a few days of possession. This also makes an offer more appealing to a seller in a bidding situation.

    • Competing Offers Strategy

      If competing against other offers, the cleaner the offer, the more appealing it is to a seller. The higher the price, the more appealing the offer is to the seller and likely to win the bidding war. So what should you offer? The highest number you feel comfortable without feeling like you overpaid, but also feeling okay with not getting the house if someone else outbid you by even as little as $1,000 more.

    • Why work with a buyers agent? Does it cost anything?

      Convenience: You deal with one agent for all your showings.

      Trust: A buyers agent has a number of duties to you as a buyer. Loyalty, duty of care, fiduciary duty are just a few.

      To negotiate on your behalf: A listing agent has a duty to get the best price for the seller. A buyers agent? To get you the best price.

      And not necessarily the best of all, it's Free. After all, the expertise is pricesless.

       

  • House & Structure

    • Foundation

      Foundation should be free of cracks both on the interior and exterior. Some small cracks usually around windows are more common. Also, not all cracks are created equal. Horizontal cracks are more serious than diagonal or vertical cracks and are more susceptible to bulging which weaken the structural integrity of the foundation walls.

    • Building Envelope

      The exterior of the home regardless of material (stucco, siding, brick, stone) should be free of cracks and in good condition to prevent any water penetration during heavy rain storms. Also check around windows and doors for any potential leaks. Joints between two different exterior materials can also be susceptible to leaks.

    • Roof

      The roof line should not be sagging and there should be no visible depressions. Shingles should be flat with no visible curling. In the winter the roof should be evenly covered with snow. Ice or melting snow is indicative of heat loss due to poor insulation in the attic. Check for condition of eave-troughs and down spouts.

    • Lot Grading and Landscaping

      The lot grading should be away from the house so during heavy rains any excess water will drain away from the foundation walls of the house. Also large trees that are located close to the house may have deep roots that can cause foundation, drain and sewer problems.

    • Windows and Doors

      Windows and doors should open and close well. Doors should stay in any open position. Self closing doors may be indicative of uneven settling of the house. Newer windows with two or three sealed gas panes should be free of moisture or staining in between panes. The age of some windows can be found on a manufacturer's stamp in between two panes. Wood frames should be free of rot.

    • Walls and Floors

      Walls and ceilings should be straight and free of cracks though some diagonal cracks at door openings and window corners is common due to shifting over time. Cracks in the ceiling can be caused by water damage which may be indicative of a roof leak, or due to shifting. Floors should be straight and level. Sometimes unevenness can be corrected by adjusting the teleposts in the basement.

    • Electrical Panel and Wiring

      The electrical panel should have some expansion slots available. The electrical service should be 100amps or better. You should check for any live knob and tube wires or aluminum wires. Most insurance companies require upgrades to such wiring. More recent studies failed to find a higher risk of fire associated with knob and tube wiring, unlike aluminum wires which can be a fire hazard.

    • Plumbing

      Plumbing should be at the very least copper or better (pvc, pex, abs). Most insurance companies may require plumbing upgrades to be completed for any galvanized steel, cast iron or lead pipes. Running the water and flushing toilets will identify any water pressure, flow and draining problems.

    • Furnace, AC unit, HRV and Ductwork

      The furnace and AC unit should be sufficiently powerful to service the size of home they're in. Other safety concerns would be any possible cracks in the heat exchanger, and ensuring any exhaust doesn't blow back into the home. Most newer homes will have high efficiency furnaces as well as Heat Recovery Ventilators which helps keep the utility bills down. Check the condition of any visible ductwork.

    • Hot Water Tank

      Hot water tanks can last as long as 15 years though most will likely last half that time. Usually you want to look for signs of corrosion, and perhaps the location of the tank itself to determine any possible damage it may cause when it does burst at the seams.

    • Signs of Moisture and/or mold

      Most signs of moisture and water seepage manifest themselves through evident staining, mineral deposits, rot, rust or mold in the affected areas. Identifying the source of the moisture can determine the extent of the repair needed and the cost to fix the problem. This in turn helps decide whether to make an offer or not based on how easily and/or cost effectively the problem can be solved.

    • Odors

      Many odors are fairly identifiable and recognizable (ie fresh paint, pet odor, smoking, sewer back up), and it becomes a matter of personal preference whether to buy a house or not based on the buyers confidence the odor can be eliminated. Other times it's not so easy to tell just what stinks. For those occasions an indoor air quality test may be in order, but the better option is to walk away.

    • Sump Pump, Back Up Valve

      Check for a sump pump in the basement. Lift the floater to see if the pump will start. If a sump pump is not present there should at least be a back up valve that shuts when water backing up will push the valve up. If possible check to make sure it is not seized in one place and it moves freely.