You and your real estate agent
The buying process
Agreement of Purchase and Sale
Deposit
Closing or Possession Date
Conditions in your agreement
After an agreement is signed
Closing costs

YOU AND YOUR AGENT

Buying a house is totally different than buying any other large ticket item. When you are looking for a car , for example, you must go to the dealership that has the specific car you want to look at and deal with the salesperson for that dealership. Real estate is different because of a system called MLS that allows one agent to show you properties listed with all real estate companies.Here's how it works.
Property owners sign a contract to sell their property with a licensed real estate agent. This is called listing their property. These properties are usually placed on a system called the MLS system ( Multiple Listing System). Any agent in any real estate company has access to information on any property listed on this MLS system. So you only have to deal with one agent who has access to all MLS listings. Ask your friends and family for a referral to a good agent or interview some different agents and then pick the one you are most comfortable with. You should choose an agent who is familiar with the area you are interested in and the type of housing you require. There is no cost to you. The agent is paid a share of the commission the owner of the property pays.
Once you choose your agent work with this agent and only this agent. If an agent knows he/she is working with a loyal client the agent will spend as much time as it takes to find you a home. On the other hand if an agent knows you are working with several agents the agent will spend less time looking after your interests. The agent is paid on a 100% commission basis. The agent only gets paid if they are the one that sells you a property. Pick your agent and stay loyal. Demand good service and if you don't get it choose another agent.

HOW THE BUYING PROCESS WORKS

Once you have selected your agent, you and the agent will usually meet to make a plan of action and to sign some paperwork before you get started.

Working with a Brokerage Representative Pamphlet:
All real estate salespersons must disclose in writing the type of representation they will be giving you. There are several options including representing you as an "Agent" and as a "Customer". Usually they will be representing you as a "Buyer's Agent". The salesperson will provide you with and explain a pamphlet called "Working with an Brokerage Representative". Once you understand the agency relationship you will be asked to sign a tear off strip on this pamphlet acknowledging that you have read and understood it. To download a copy of the pamphlet click here : Download Working With a Brokerage Representative. For more information on agency click here Agency.

Buyer Brokerage Agreement:
As noted above real estate agent's work on a commission basis. If you buy a property privately or from another agent they do not get paid. If you decide to work with an agent they may ask you to enter into a legal contract and sign a "Buyer's Brokerage Agreement". This agreement outlines the extensive services the salesperson is going to provide you. The salesperson is contracting to provide these services to you. The buyer agrees to work with only that salesperson and gives the salesperson the authority to look for properties that are listed but also those that are private sale. Usually a part of this agreement is that if you decide to purchase a property where there is no commission available to the salesperson that you will agree to pay the salesperson an agreed upon commission. This almost never happens because most properties are listed on the MLS system where the sellers pay the commission and most private sales will agree to pay agents a commission if they bring an acceptable offer to them. Not all salespeople use this agreement but you should be aware of it's existence.

ESTABLISHING WHAT YOU NEED IN A PROPERTY

At your meeting you will also decide on the properties that best suit your needs. The agent will later phone the agents who have the properties listed and make appointments for you to view the homes. Your agent will then take you to see the homes. After you have viewed the homes you pick the home that you feel is the right one for you. This may take several outings but not necessarily. Many buyers find there home surprisingly quickly. Once you have decided on the property you want to purchase your agent will prepare a written offer or what is technically called an "Agreement of Purchase and Sale" on that property.

THE OFFER  or AGREEMENT OF PURCHASE AND SALE

When you make an "offer" on a house you will sign an Agreement of Purchase and Sale. This is a written contract that you will sign and if acceptable the seller will also sign. If certain items such as price are not acceptable to the owner a Counter Offer is prepared by the seller. This is then presented to you and if the changes are acceptable to you an agreement is made. This agreement sets out the conditions under which you are agreeing to buy this house. It is a binding contract between the two parties and will stand up in a court of law. It is for this reason that you must understand some conditions that should be in your offer.

Provide Proof of Identification

In 2008 the Federal Government, through an agency called Fintrac, made it a requirement for real estate companies to obtain proof of identification from sellers and buyers of property. You will need to show a government photo ID such as a driver's license, a heath card, a passport or other approved document. Information such as name, birth date etc are recorded by the agent on a form provided by Fintrac. Click to read Fintrac News Release - Fintrac News Release

Deposit:

Closing Date:

Conditions:

Conditional upon the purchaser obtaining financing:
Unless you have the entire amount of the purchase price in cash you should always put a condition in the offer for financing. This condition will outline the amount of financing you will need, the interest rate and the terms of the mortgage. You will be given a set number of days to arrange this financing, usually 5 banking days. If the lender turns you down for some reason the agreement is no longer is force and your deposit is returned. It is a good idea to have a mortgage preapproved before you start looking for property. This will speed up the time it takes to have your mortgage approved on a specific property.

Conditional upon the purchaser having an inspector inspect the property for structural soundness:
Most purchasers have the house inspected by a professional home inspector after they have an accepted offer. There are many inspection companies to choose from. Ask your agent for recommendations. This condition would set out an amount of days, usually 3-5, for this inspection. In the event the inspection uncovers structural problems that you were unaware of you can either renegotiate with the seller to have the seller either pay for some or all of the work to repair the problems or if the problems are too much for you to handle then you can declare the agreement null and void and your deposit will be returned. Most properties have something wrong with them and the older the house the more things that are wrong. You should prepare yourself for the inspector uncovering some things and make your offer accordingly.

Conditional upon the owner providing a "Property Condition Disclosure Statement":
When a property is listed by an agent the owner is asked to fill out a Property Condition Disclosure Statement or PCDS. This form asks the owner many questions about the structural soundness of the house such as has the owner had problems with the structure or the electrical or plumbing system, and many other questions about the property. In your offer you should ask to see this PCDS and have at least 24 hours to review and accept this PCDS. This is important. For example if the owner has an ongoing leak in the basement that is disclosed in the PCDS you may choose not to go ahead with the purchase.

Conditional upon the owner providing a survey or plot plan:
You will want to know what the property lines are for the property you are considering. You should ask for the owner's copy of the location certificate or plot plan. It is a good idea to have your own location certificate completed later but having the seller's copy will help you understand where the boundaries of the property are located.

Conditional upon certain items remaining:
Items such as dishwasher, blinds,drapery tracks,light fixtures and any other items that you want to include such as appliances, shelves etc. will be identified in your offer. The list can be endless but should include all light fixtures and ceiling fans, drapery tracks, mirrors in bathrooms, blinds and built in appliances such as dishwashers. You should discuss with your agent the items you want to include in your offer and the agent will write this items into the agreement.

Conditional upon your lawyer reviewing and approving the agreement:
As a protection against your agent missing something or writing a poor agreement it is a good idea to have a clause for your lawyer to review and approve your agreement. This is usually 2 business days from acceptance of the offer.

If the property is on well or septic

Conditional upon a water test and the results meeting the Nova Scotia health standards

If the property has it's water supplied by a well then you will have a condition outlining provisions for you having the water tested and the results meeting the standards set out by the Department of Health. Water is drawn from the well, usually through the kitchen tap. You can either take the sample yourself or a third party can to do it for you. Your agent can only show you how to take the sample. Property inspectors often take water samples for you at the time of inspection. If you are having any additional tests completed on the well such as a flow test (see below) the person doing this test will usually take the water sample for you.
This sample is then taken to the Department of Health Path Lab or a private water testing company for testing. There is an unlimited number of things you can ask to be tested and there is a cost for all of them. If you are getting a mortgage you will be required to have the water tested for bacteria, arsenic and uranium. You may want to test for other things such as iron, sulphur and hardness. There is usually a package deal offered by the lab to test for either the basic things required for a mortgage or a long list of items. We recommend doing the more extensive test because even if the property has acceptable levels of bacteria, arsenic and uranium it may have high levels of other items that will require you to purchase an expensive filter system.
The results of the water test will take about a week for the basic test and up to two weeks if you are having the more through test completed. If the results show the levels are above acceptable levels there are ways to bring the levels to acceptable levels such as shocking the well and retesting, installing a UV Light system, installing a water filter system and more. Your agent will discuss the options that you have should the results come back higher than acceptable. Usually this can be worked out and your sale completed.

Conditional upon a satisfactory water flow test
The amount of water the well is actually producing can be determined by having a Flow Test completed. This test is completed by a professional and involves connecting a hose to the outside tap and draining the well for a set time and then calculating how long the well takes to recover. These calculations are compared to accepted Provincial guidelines to determine whether the well is producing enough for your families needs. This is usually completed within a few days of acceptance of the offer.

Other Conditions:
As I said the list of potential clauses is endless. Consider the things that important to you and discuss this with agent.

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