Buying a home is an exciting life event. But it can be overwhelming, especially for first-time buyers. Here are six things to consider. Think of them as tips to prevent legal problems.

Tip 1. Figure out how much you can afford

Before you start looking for a new home, figure out: how much can I comfortably afford? Be realistic. Consider your other financial goals, like saving for retirement.

First, how much money do you need now? First-time buyers can be caught off guard by significant closing costs such as property transfer tax and legal fees.

There are ongoing costs of owning a home, too. Mortgage payments, home insurance, and property taxes, are some expenses that might be new to you.

And you can no longer expect someone else to pay for repair and maintenance bills.

Tip 2. Get mortgage pre-approval

Meet with a few lenders, and get mortgage pre-approval. This way you can:

• find out how much they’d be willing to lend you,
• figure out how much you can afford to borrow, and
• signal to sellers that you’d actually be able pay them when the time comes

Remember, pre-qualifying for a mortgage doesn’t give you (or the seller) the same level of certainty.

Tip 3. Get help from a notary or a lawyer

The process of buying a home is complicated. A good lawyer or notary public will walk you through it. They’ll explain the paperwork and they’ll make sure things are done on time.

When you find a home you love, you’ll probably jump at the chance to make an offer to buy it.

What you might not know is this: offers are made by presenting a purchase contract to the seller. And making an offer can lock you into that contract.

Consider making your offer subject to your notary or lawyer approving the contract. This will allow you to walk away if your lawyer or notary finds any red flags.

Tip 4. Buy yourself time to take a closer look

How can you satisfy yourself that you’re not hit with a nasty surprise (or two) once you’ve handed over the deposit? Add conditions to your offer. Also known as subject clauses, these will buy you time to thoroughly answer the questions you have about the property.

Common examples are making an offer subject to getting a home inspection or being able to secure a certain interest rate.

If you can’t satisfy the conditions, you don’t have to go through with the deal.

Tip 5. Get it in writing

When it comes to buying a home, you generally can’t rely on anything that’s said about the property if it’s not written in the contract itself. So, if there’s a fact you’re relying on, get the seller to write it in the contract. Or buy yourself time to look into the issue yourself.

Be aware that the property condition disclosure statement (known as the PDS) isn’t usually part of the contract. As long as a seller is honest about what they know, what they say in the PDS doesn’t actually have to be correct.

Tip 6. Take deadlines seriously

Under the standard purchase contract, you must meet strict deadlines — or face the legal consequences. The seller may choose to overlook the fact that you missed a deadline. But don’t count on it. For example, if you don’t pay the seller by the completion date, they could cancel the contract. You’ll be out of pocket by the amount of your deposit.

Here are some tips to avoid missing deadlines:

• Make sure your personal funds are available when needed. Imagine making a last-minute request to withdraw $100,000 from your account. The bank says they need 3 days to fulfil this request, but the deal closes is in 2. The sale could fall through.
• Ask your lawyer or notary to sit down with you a few days before completion to go over the paperwork.
• Look into home insurance well before the completion date.

Visit the Peoples’ Law School website at peopleslawschool.ca for more on buying a home, including explanations of the legal documents involved.