Buying your first home can be like putting together a challenging puzzle. In the beginning, there are so many pieces that you may not know where to start. But as you get informed, all of those seemingly small, yet critically important pieces of the home buying puzzle will begin to come together.
Here are three first-time homebuyer questions that you may not have yet considered.
Do I have to sign a buyer representation agreement?
The short answer is no. You don’t have to sign a buyer representation agreement (BRA) with a brokerage, but you should consider the benefits it offers you as a home buyer.
A BRA defines the relationship between the buyer (you) and the real estate brokerage you are working with, including the broker or salesperson. It sets out the property type and geographic location for your potential new home, lists the services to be provided, addresses the issue of 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 to you, called fiduciary duty. This means your representative has a duty to follow your instructions, protect your confidential information and promote and protect your best interests.
To make the most of this relationship, it's important to identify your needs and expectations. Discuss what services you are looking for and determine whether the brokerage and the salesperson or broker you’ll be working with are the right match for you. To avoid misunderstandings later on, it's important not to make any assumptions and list all details in writing. You should also take time to ask what the broker or salesperson expects from you and what your obligations are.
If you’re not comfortable with the terms of the BRA, you can enter into a Buyer Customer Service Agreement with the brokerage. In this scenario, the obligations of the brokerage are different. The brokerage will not have to promote and protect your best interests, but they will still be obligated to act fairly, honestly and with integrity and provide conscientious service. Keep in mind, a brokerage can choose to decline your business if you choose not to enter into a BRA.
As with any legal contract, take the time to read and understand each clause of the BRA. If you’re unsure about something, ask questions or consider seeking legal advice before signing. You must understand that with the rights that come with any agreement, there are also obligations.
Do I have to be pre-approved for financing to put in an offer on a home?
Again, the quick answer is no – you don’t have to be pre-approved for financing to put an offer on a home. Getting a pre-approval for a mortgage is a good idea though, as it will let you know how much you qualify for and will help ensure that you are looking at properties that you can afford.
You don’t want to fall in love with a property, only to find out that it’s out of reach. One of the other benefits of pre-approval is that it may provide you more flexibility to move 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 home buyers. Eligibility for each program depends on a number of criteria, so it’s always a good idea to speak with your registered real estate professional to determine whether you qualify. Here are a few of the programs that may apply.
The Home Buyers' Plan (HBP) is a federal program that allows you, as a first-time homebuyer, to withdraw funds from your registered retirement savings plan (RRSP) to help pay for the purchase of your home. Under the HBP, you can withdraw up to $25,000 to use towards the purchase. If your spouse also qualifies, they can also withdraw up to $25,000, for a total of up to $50,000.
You may have also heard of the First-time Home Buyers' Tax Credit (HBTC). This is a tax credit that you or your spouse may be able to claim on your annual income tax return. For details about your eligibility for either the HBP or the HBTC, visit www.cra-arc.gc.ca.
In Ontario, the provincial government collects a Land Transfer Tax. Depending on eligibility, you may receive a refund for part or all of the tax. To learn more, visit www.fin.gov.on.ca. Additionally, if you are buying a home in the City of Toronto, there is a Municipal Land Transfer Tax. To learn more about your eligibility for a rebate, visit www.toronto.ca.
As your home buying puzzle begins to take shape, don’t be afraid to ask questions or seek out more resources.
Contact me today to find out how I can help advise and guide you in your home purchase or even just to chat about the current real estate market.
Here are three first-time homebuyer questions that you may not have yet considered.
Do I have to sign a buyer representation agreement?
The short answer is no. You don’t have to sign a buyer representation agreement (BRA) with a brokerage, but you should consider the benefits it offers you as a home buyer.
A BRA defines the relationship between the buyer (you) and the real estate brokerage you are working with, including the broker or salesperson. It sets out the property type and geographic location for your potential new home, lists the services to be provided, addresses the issue of 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 to you, called fiduciary duty. This means your representative has a duty to follow your instructions, protect your confidential information and promote and protect your best interests.
To make the most of this relationship, it's important to identify your needs and expectations. Discuss what services you are looking for and determine whether the brokerage and the salesperson or broker you’ll be working with are the right match for you. To avoid misunderstandings later on, it's important not to make any assumptions and list all details in writing. You should also take time to ask what the broker or salesperson expects from you and what your obligations are.
If you’re not comfortable with the terms of the BRA, you can enter into a Buyer Customer Service Agreement with the brokerage. In this scenario, the obligations of the brokerage are different. The brokerage will not have to promote and protect your best interests, but they will still be obligated to act fairly, honestly and with integrity and provide conscientious service. Keep in mind, a brokerage can choose to decline your business if you choose not to enter into a BRA.
As with any legal contract, take the time to read and understand each clause of the BRA. If you’re unsure about something, ask questions or consider seeking legal advice before signing. You must understand that with the rights that come with any agreement, there are also obligations.
Do I have to be pre-approved for financing to put in an offer on a home?
Again, the quick answer is no – you don’t have to be pre-approved for financing to put an offer on a home. Getting a pre-approval for a mortgage is a good idea though, as it will let you know how much you qualify for and will help ensure that you are looking at properties that you can afford.
You don’t want to fall in love with a property, only to find out that it’s out of reach. One of the other benefits of pre-approval is that it may provide you more flexibility to move 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 home buyers. Eligibility for each program depends on a number of criteria, so it’s always a good idea to speak with your registered real estate professional to determine whether you qualify. Here are a few of the programs that may apply.
The Home Buyers' Plan (HBP) is a federal program that allows you, as a first-time homebuyer, to withdraw funds from your registered retirement savings plan (RRSP) to help pay for the purchase of your home. Under the HBP, you can withdraw up to $25,000 to use towards the purchase. If your spouse also qualifies, they can also withdraw up to $25,000, for a total of up to $50,000.
You may have also heard of the First-time Home Buyers' Tax Credit (HBTC). This is a tax credit that you or your spouse may be able to claim on your annual income tax return. For details about your eligibility for either the HBP or the HBTC, visit www.cra-arc.gc.ca.
In Ontario, the provincial government collects a Land Transfer Tax. Depending on eligibility, you may receive a refund for part or all of the tax. To learn more, visit www.fin.gov.on.ca. Additionally, if you are buying a home in the City of Toronto, there is a Municipal Land Transfer Tax. To learn more about your eligibility for a rebate, visit www.toronto.ca.
As your home buying puzzle begins to take shape, don’t be afraid to ask questions or seek out more resources.
Contact me today to find out how I can help advise and guide you in your home purchase or even just to chat about the current real estate market.
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