When you’re selling your home and buying a new one, there are many things to consider. Each situation is unique. Getting advice you can trust that is specific to you is critical.

Assessing what you can afford
Approaching your down payment
Setting the right listing price
Determining what you need
Finalizing your offer
Hiring a lawyer
Closing the sale
Tallying the costs

For more information, speak to your Member Service Advisor.

Assessing what you can afford

Before you go shopping for your home, you need to know what you can afford. You should also know the value of your current home to estimate the amount of equity you have built, which will help determine your down payment. If your current mortgage is with another financial institution, you need to find out if you are going to have to pay a mortgage penalty to sell your house before the mortgage is up for renewal. 

Your Member Service Advisor can take the time to review the equity you have in your current home, your income and other factors to determine your best options. We offer a pre-qualification process as well so that you know exactly what you can afford. Realtors typically take your offer more seriously if you go armed with the backing of your financial institution.

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Often the equity built up in your current home serves as your down payment. However, you do have other options.

Most people take all the equity they’ve built up in their current residence and put the proceeds towards their new purchase. This is a great way to take advantage of a conventional mortgage and avoid mortgage insurance premiums.

However, it is important to look at your whole financial situation and determine if it might be in your best interest to pay off unsecured debts such as credit cards that are likely being carried at higher rates, which are costing you more than the equivalent amount on a mortgage. With mortgage rates as low as they are in today’s market it might make sense to reduce your down payment and use your equity to pay off as much high-rate debt as possible. Not only will this improve your credit rating, it will allow you to afford more when looking at a home because you will have eliminated monthly debt service obligations on your unsecured debt. Your Member Service Advisor will help you determine what’s best for you.

Learn more about down payments in our First-time Home Buyers’ Primer.

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Setting the right listing price

The price you set is a critical factor in the return you’ll receive for the home you’re selling. In real estate terms, market value is the price at which a particular house, in its current condition, will sell within 30 to 90 days. If the listing price is too high, it can limit prospective buyers and dramatically slow down the time it takes to sell your home. If your home is on the market for too long, buyers may wonder what’s wrong with it. You might even have to settle for a much lower selling price, which in turn reduces the amount of money you can put towards your new home.

Your real estate agent will help you set the right listing price, taking into consideration the market, the location, and the size and condition of your home. If you need help in selecting an agent, check out the MovePlus service.

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 Determining what you need

Why do you want to move? Are you being relocated at to work? Is it to move to a more desirable community? Do you need a bigger or smaller home? Whatever the reason you want to move, there are several things to consider: How long do you plan to live in the home? If you purchase a home and are transferred or decide to move after only a short time, you may end up losing money in the sale. The value of your home may not have appreciated enough to cover the costs of buying the home and then selling it. Determine the features you require in a home to satisfy your lifestyle now. Then think about what you’ll need five years from now.

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 Finalizing your offer

Often the true picture is not revealed on a simple viewing. Ensure you know what you are buying by having an inspection performed by a professional building inspector before finalizing your offer to purchase. The inspection may bring to light areas where repairs or maintenance are required and will assure you that the house is structurally sound. The inspector should provide you with a written report. If not, ask for one. Hiring an inspector is well worth the investment.

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 Hiring a lawyer

You’ll need to retain a lawyer to assist you with the sale. Look for somebody that you can work with, who’s open about fees and closing costs, and who specializes in real estate law. The MovePlus service can help you select a lawyer if you don’t have one.

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 Closing the sale

Once you’ve met the conditions of the purchase and finalized your financing, you’re ready to close the sale. The signed sale papers become the legal Agreement of Purchase and Sale. Ensure you review the documents with your lawyer.

After the Agreement is signed and accepted, your lawyer will order a series of searches from various municipal offices to ensure that the vendors haven't been sued, that they've paid all their property taxes and water, electric and gas bills, and that there'll be no outstanding mortgages or liens on the property once you become the owner. Your lawyer will notify the property tax and utility offices that you will be the new owner and will calculate the adjustments for closing to pro rate those costs for the day you take possession.

The OPPA Credit Union will be in contact with your lawyer to ensure the correct funds are available on closing. Typically, your lawyer pays the relevant parties on your behalf, including additional closing costs that you may not have considered such as Land Transfer Tax.

On closing day, your lawyer will meet a representative from the seller's law firm at the land registry office. There, your payment will be exchanged for the keys to your home and the two sides will trade closing documents. Your legal representative will then register the new deed and mortgage, so anyone doing a search will see that you're the owner. Finally, you pick up the keys and you’re ready to move in!

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 Tallying the costs

When buying a home, the purchase price is always payable "subject to the usual adjustments" at closing. This means that any amount that the seller has already prepaid will be adjusted so that the home buyer pays the excess amount back to the seller, and vice versa.

However, there are additional closing costs that can include:

• Municipal property and school taxes.
• Monthly condominium maintenance fees (if applicable).
• Utilities, such as hydro, water and fuel oil.
• If it’s a new home, you often need to buy kitchen appliances, tools, gardening equipment, cleaning materials, and perhaps some new furniture, carpets or curtains. It's a good idea to tally up the costs of items you think you'll need in the short term and factor these expenses into your initial costs.
• Land transfer tax, sometimes known as the "welcome tax.” Most provinces levy a one-time tax based on a percentage of the purchase price of the property.
• Real estate fees – This is the commission paid to the agent for the sale of your home. If the OPP is not paying for your move, you will more than likely incur real estate fees to sell your property which can range from 5 to 6% and are paid through your lawyer.
• Property insurance – All homes must have adequate insurance coverage against fire, and other risks of loss, theft and liability. You may find that insurance on your new home is more costly than your previous residence. Your mortgage lender will require that you provide your lawyer or notary with proof that your home insurance is in place by the closing date.
• Moving costs – Whether the move into your new home is a do-it-yourself affair or you hire movers, there will be costs involved. If you plan to move during the peak spring and summer months, you should contract for service two to three months in advance if possible.
• There could be fees associated with the sale of your current home, such as a penalty to break your current mortgage and/or a discharge fee.
• Lawyer’s fees.

Realistically, you should estimate your closing costs to be approximately 1.5% of your purchase price.