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Step 1. |
After due diligence (research, affordability, consultations, inquiries, etc.), take a decision to buy a Foreclosure / Distress Bank Sale property. (P.S. If you cannot reach a decision and need to consult a real estate agent, proceed with Steps 2 and 3 below, even before consulting a real estate agent. |
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Step 2. |
Contact a Mortgage Broker or your favourite banker sooner than later to lock in the best mortgage rate and to obtain a mortgage Pre-Approval in writing to be able to negotiate with the Seller (the financial institution that has listed the property). |
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Step 3. |
Arrange to have money in your current/savings account (i.e. redeem your RRSP’s, or arrange to transfer from your GIC’s, transfer any loan/gifts from family, etc) in order to ensure you have liquid cash of at least $10,000 in the bank. This is to be used towards paying the deposit when making an offer. (P.S. I will explain to you in person how you could loose out on a good deal if you do not have ready money in the bank to be paid as a deposit). |
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Step 4. |
Engage and authorize a licensed Real Estate Agent to find you a Foreclosure property in the city that you want. This authorized agent should provide you with necessary information, including: a) Foreclosure property buying Tips (i.e. vital information not otherwise known) b) Various financing options including “special cases” of those who may not have a job or even a credit history. c) Monthly costs of owning a home and closing costs. d) How to avoid real estate scams and title fraud. e) Information about schools in the area, admission formalities and whether busing is provided. f) Information about public transit, etc. near the home. g) All pertinent information about: i) Jobs in the area, businesses for sales, home based businesses, etc. ii) Procedures for validating credentials and information on professional licenses. |
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Step 5. |
Select the right Froeclosure home/s for viewing from the information provided to you by the Realtor who has access to all Power of Sale properties. |
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Step 6. |
View the Power of Sale home/s with the agent and decide on the one that meets your requirements and which would be cost effective for you to purchase and fix after purchasing it. |
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Step 7. |
In the meanwhile, contact couple of lawyers and obtain their rates, etc. Then, decide on one and have his/her contact information available to be given to the real estate agent when preparing the offer. |
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Step 8. |
Agent prepares the offer which includes price, date of possession, information on your lawyer, condition on finance, etc. |
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Step 9. |
Offer to be signed by you, the buyer and deposit to be given - which is submitted with the offer. (P.S. Deposit remains in Trust Account and would be returned if the deal does not go through) |
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Step 10. |
If seller accepts the offer, the agreement is executed and the deal is done pending the following conditions in the offer: a) Mortgage being approved and documents signed. b) Inspection of the home. c) Any other conditions included in the offer. |
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Step 11. |
If the seller does not accept the buyer’s offer, seller signs back with his/her terms and it is up to the buyer then to accept and execute the offer or once again to sign back, and so on, until the deal is executed. |
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Step 12. |
Once the deal is executed, the buyer has to fulfill the conditions in the offer within the stipulated time and inform the Agent, who then prepares the waivers. |
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Step 13. |
The waivers (confirming that the conditions have been met) are signed and acknowledged. Copies of the waivers are provided to the agent’s office. |
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Step 14. |
If the bank/mortgage provider does not call you, you should call them and ask them if there are any papers yo have to sign. You must insist on signing those papers and request for a copy of whatever documents you sign. This is an assurance that the mortgage amount will be transferred to your lawyer, who in turn will present the cheque to the seller’s lawyer, prior to getting the key of the property. PLEASE GIVE HIGH PRIORITY TO THIS STEP, AS THIS COULD AFFECT YOUR GETTING THE KEYS ON TIME. |
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Step 15. |
a) Your lawyer, whom you have met and engaged in Step 7 above, takes over and handles all the formalities. b) If not already done earlier, your lawyer meets with you and explains the payment procedures, transfer of title, title insurance, etc. c) The lawyer arranges to give you the key on the day of closing and the property is now yours. (P.S. If your lawyer does not explain to you the steps to avoid title fraud, please ask me for my document entitled “Title Fraud – How to avoid it”. |
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Step 16. |
a) When you meet the lawyer, ask him/her about the utility bills bifurcation between the seller and yourself as on the day of closing. b) You will then call the various utility services, i.e. Hydro, Water, Heating, Phone, Cable, etc. to inform them that you will be taking possession of the property on the closing date and to maintain continuity of services, but changing the name of the owner of the property. If you need help with the phone numbers, please ask me one week before the closing so that I can provide the respective numbers to you. |
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Step 17. |
In the event you have decided to buy a condo apartment, and after the deal is finalized, a few days before taking possession, contact/visit the Building Management office and obtain information specific to your individual situation. This would include: a) Information on reserving the elevator on the day of your moving. b) Information on your locker location (if this is part of the deal). c) Information and location of your parking spot and if there are any security requirements to be met, i.e. remote opener for the gate, etc. d) Information on the unit alarm system (if there is one provided in the unit). e) Information on the usage of the common facilities, i.e. swimming pool, exercise room, party room, etc. f) Information on your mail box. |
