Chapter 7 - Mortgages and Rental Properties Flashcards
what is the difference between freehold and condo?
freehold = not condominium
freehold: you own everything inside and outside the building. (ex. a single family home)
condo: you legally own everything from the walls of your property inwards. everything outside are owned by the condo corporation
what are some pros and cons to owning a condo?
pros:
- the condo corp takes care of all/most maintenance and repairs (cutting the grass, shoveling the snow, replacing windows)
cons: you pay monthly fees and may need to pay very high “special assessments” for large repairs (roof/window)
freeholds: pros and cons
pro: you do not have to pay condo fees
cons: everything is your responsibility, need to make sure that you are budgeting for these inevitable expenses
what are the 5 steps to purchasing a home?
- familiarize yourself with the neighbourhood you’re interested in living in. begin shopping on realtor.ca
- get a real estate agent. meet with 3-6 different agents to see who is best fit
- wander through open houses (goal: learn about prices of the different type/ quality of houses in the neighbourhood)
- submit an offer (real estate agent will help)
- have your lender approve your pending purchase, get a home inspection and obtain property insurance.
what are the 3 elements of an offer
- price
- closing date
- conditions
what is a deposit in terms of a home purchase?
an amount of money you pay once the deal is accepted. it makes the contract legally binding.
t/f: conditions exist to protect the seller
false they protect the buyer
your offer is not legallly binding if until you ___ each condition as having being fulfilled
waive
what are the 3 conditions that you should always have
- financing
- home inspection
- property insurance
condition: financing. elaborate.
always have your agreement conditional on you obtaining financing (a mortgage)
condition: home inspection. elaborate.
always make your offer conditional on a home inspection
what happens if the home inspection comes back poorly?
- have the seller fix the problems (not a good idea, they will do quick and cheap)
- adjust the sales price
- walk away from the deal
condition: property insurance. elaborate.
conditional on getting insurance for the house.
what does it mean to “firm up the deal”
once you have waived the final condition, the offer becomes firm and legally binding
can you walk away if you have one or more of your conditions open?
yes