The Home Buying Process in Alberta

I would rather have a buyer speak with a lender too early than one day too late.

A mortgage pre-approval gives you an estimate of what a lender may be prepared to lend based on your income, debts, assets and other financial information. Depending on the lender, it may also include an interest-rate hold for a period of time. It is useful, but it is not final mortgage approval. The Financial Consumer Agency of Canada is explicit about that: the lender still has to approve the actual property and confirm that your finances continue to meet its requirements once you have a purchase in front of you (FCAC: mortgage pre-approval).

That distinction becomes important when deciding whether to write an offer with a financing condition. A pre-approval might tell us that buying around $600,000 is realistic. It does not mean a lender has committed to finance every $600,000 property we could find. The property itself matters. An appraisal can come in below the purchase price. A lender may have concerns with the property. Your income, employment, debt or credit can also change between the pre-approval and final financing decision. RECA specifically warns Alberta buyers and real estate professionals that a pre-approval is not a guarantee of final financing (RECA: pre-approvals and unconditional offers).

This is why I want more from a financing conversation than one maximum purchase price. I want the buyer to understand roughly what they qualify for, what monthly payment they are actually comfortable with, how much cash they want to use for the down payment, what has been set aside for closing, and whether there is anything unusual about their income or financing that could require more time later. A lender may approve more than you actually want to spend. Those are different numbers, and I think they should stay different when they need to.

Be careful about financial changes after pre-approval. Once you have been pre-approved and especially once you have an accepted purchase, I would talk to your lender before making a material change to your finances. That can include taking on a new vehicle loan, opening significant new credit, changing employment or doing something else that materially changes the financial picture the lender originally reviewed. RECA identifies changes in employment, income, credit score and new debt as factors that can affect final mortgage approval (RECA). That does not mean your financial life has to freeze for months. It means that if you are considering a significant change while buying a home, the lender should be part of that conversation before the change is made.

This is the part everyone pictures when they think about buying a home. We book showings. You walk through houses. You figure out what you like, what you thought you liked but apparently cannot stand in person, and which compromises actually matter. That last part is useful. Most buyers begin with a list of requirements. After ten homes, the list usually becomes much more intelligent.

Maybe the extra commute is worth it for the yard. Maybe the yard matters much less than expected once you see what an additional $100,000 buys. Maybe you thought you wanted a renovated home but would rather buy something dated on the right street. The search is partly about finding a property and partly about learning how you value the trade-offs.

At each serious showing, we are also looking beyond whether you like the kitchen. If this became the house, I want to know what comparable homes have actually sold for, how the property compares with those sales, how long it has been available, whether the pricing history tells us anything useful, what condition concerns deserve a closer look, what appears to have been renovated or altered, and what questions we should answer before or during an offer.

By the time the right home appears, the goal is not to make you decide faster for the sake of speed. It is to make sure you already have enough context that a reasonable decision does not require starting the entire education process that afternoon.

An offer is much more than a price. The purchase contract sets out what you are offering to pay, but it also deals with the deposit, conditions, possession date, included and excluded items, deadlines and other terms of the purchase. The seller can accept the offer, reject it or negotiate changes.

Price obviously matters. It is not the only thing a seller can care about. A possession date may matter because the seller has already purchased somewhere else. Conditions may matter because one offer gives the seller more certainty than another. The deposit can matter. Included items can matter. This is why I would rather understand what we can about the seller's situation before deciding how to structure the offer.

That does not mean giving away things you need just to make the contract attractive. It means not assuming that another $5,000 is always the only way to improve an offer. Sometimes a term that costs you very little is worth considerably more to the seller. And sometimes the opposite is true. If a possession date creates a month of temporary housing for you, then matching the seller's ideal date is not a free concession. It has a real cost on your side too. The offer should reflect both.

Once the seller accepts your offer, the purchase may still be conditional. Common conditions include financing, a home inspection and, for condominiums, review of the condominium documents. The exact conditions depend on the property and the offer. Each condition also has a deadline.

This is where preparation before the offer starts paying for itself. If we have a financing condition, the lender gets the accepted contract immediately. If there is an inspection condition, we want the inspection booked promptly rather than waiting until the last day available. If condo documents are part of the review, we want to get the available documents in front of the appropriate reviewer as early as possible.

The point is not to race through conditions. It is to leave enough time to deal with the unexpected. A lender may ask for another document. An inspection may uncover something that needs a contractor's opinion. A condo review may raise a question that requires more information from the corporation. A five-day condition period feels very different when you start the work on day one than when you start on day four.

Should you ever waive conditions? Sometimes. Removing a condition can make an offer more attractive because it gives the seller greater certainty. RECA has specifically acknowledged that unconditional offers may appeal to sellers while also warning buyers about the additional risk they take on (RECA: pre-approvals and unconditional offers). I do not think conditions should be treated as sacred, and I do not think they should be treated as disposable. They exist to protect you from a particular uncertainty. Before removing one, I want to ask a simple question: what risk was this condition protecting us from, and what do we know about that risk now?

If the answer is that financing has already been carefully reviewed with the lender and the buyer understands the remaining risk, that is a very different decision from dropping the financing condition simply because there are competing offers. The same is true of an inspection. A buyer may decide to accept the physical risk of a property without an inspection condition. That can be a rational decision in some circumstances. But it should be a decision made because the risk is understood and acceptable, not because someone said, "You have to go unconditional to win." With financing in particular, the consequences of being unable to complete an unconditional purchase can be serious. Your realtor can explain the real estate side of that risk, but advice about your legal liability belongs with your lawyer.

The deposit causes unnecessary confusion because buyers hear several different amounts during the purchase. Your down payment is the total amount of your own money going toward the purchase. Your deposit is money delivered earlier under the purchase contract as evidence of your commitment to the transaction. It generally forms part of the money ultimately credited toward the purchase rather than being an additional amount on top of your agreed purchase price. RECA describes a real estate deposit as a portion of the down payment that a buyer provides with an offer to purchase (RECA glossary).

The contract determines how much the deposit is, when it must be delivered and who will hold it. Where a brokerage receives money on behalf of a client in an Alberta real estate transaction, RECA's rules require those funds to be handled through the brokerage's trust-account system (RECA: Real Estate Act Rules).

The practical thing I want settled before we write is how quickly you can access the deposit. If the contract requires it shortly after acceptance, that is a bad time to discover the money is sitting in an account that takes several business days to release. A larger deposit can sometimes make an offer more appealing, but I would not use a bigger deposit simply for theatre. It is real money that becomes tied to the transaction, so the amount should make sense for the offer and for the buyer.

Once all conditions have been dealt with and the contract becomes firm, the nature of the process changes. We are no longer deciding whether you are buying the home. We are getting ready to complete the purchase. Your lender finishes the mortgage work. Your lawyer prepares the legal documents and tells you how much money needs to be provided for closing. We make sure the remaining contractual dates and possession details are understood.

This is also the point where I want buyers to resist the urge to spend every remaining dollar. There are still legal costs, registration charges, adjustments, moving expenses and the first round of things you inevitably discover you need after getting the keys. Possession is much more comfortable when there is still money left in the bank afterward.

Choose the possession date deliberately. Possession is a negotiable term in the offer, so it deserves more thought than "the sooner the better." If you rent, consider when your lease ends. If you are selling another property, think carefully about whether the dates need to line up and what happens if they do not. If the seller needs a particular date, accommodating it may strengthen the offer. But if that same date forces you into temporary accommodation or creates problems with your own sale, then it has a cost to you. That trade-off should be visible when we negotiate it.

What actually happens on possession day? By possession, your lawyer and lender are handling the transfer of purchase funds and the legal completion of the transaction. Alberta residential transactions commonly use the Western Law Societies Conveyancing Protocol, which permits purchase and mortgage funds to be released as part of the closing process before registration is ultimately completed at Land Titles, provided the applicable protocol requirements are met (Law Society of Alberta: applying the protocol). From the buyer's point of view, the important part is simpler: keys are not something I would promise for 8:00 a.m. Release depends on the closing process being completed between the lawyers and any applicable lender requirements being satisfied. That is why I generally would not schedule movers, cleaners or a contractor based on the assumption that you will have access first thing in the morning. Possession day is exciting enough without a moving truck billing by the hour outside a house you cannot enter yet.

Your down payment is not the complete cash requirement. For an Alberta purchase, buyers should also be thinking about things such as legal fees and disbursements, Land Titles transfer registration, mortgage registration where applicable, title insurance where applicable, property-tax adjustments, and the home inspection or other due-diligence costs paid earlier in the process.

Alberta does not charge a provincial land transfer tax, but it does charge Land Titles registration fees. We break those amounts down separately in our Alberta land transfer tax and closing costs guide.

One of the easier closing items to miss is not technically a fee. It is the statement of adjustments. For example, if the seller has already paid property taxes covering a period during which you will own the home, the lawyers can adjust the amount so each party ultimately bears the appropriate portion. RECA defines a property-tax adjustment as the amount a buyer reimburses a seller for property taxes already paid based on when the buyer takes possession (RECA glossary).

This is why I do not like planning a purchase where the down payment consumes every available dollar. The exact number required by the lawyer will not necessarily be known when we first start shopping. Leave room for it.

Condition. A term in the purchase contract that must be dealt with by its deadline for the transaction to proceed as contemplated by the agreement. Financing, inspection and condominium-document review are common examples. The exact wording matters. When there is any question about the legal effect of a condition, the contract and your lawyer are the authority, not a glossary on a website.

Deposit. Money delivered under the purchase contract and credited toward the purchase if the transaction completes. The contract sets the amount, deadline and how it is to be held. It is part of the money you are bringing to the purchase, not a second down payment.

Possession date. The date agreed to in the purchase contract for the buyer to take possession, subject to the closing requirements being completed. It is worth negotiating deliberately rather than treating it as an administrative detail.

RPR, or Real Property Report. A Real Property Report is a surveyor-prepared document showing property boundaries and the location of buildings and structures on the land. RECA describes an RPR as a land-survey-based diagram showing the boundaries, buildings and structures of the property (RECA glossary). For Calgary properties, you may also hear about a Certificate of Compliance, and this needs a careful distinction. A Calgary Certificate of Compliance confirms whether the locations of structures shown on the RPR comply with the Land Use Bylaw. It does not confirm building-code compliance and it does not confirm that required permits were obtained or inspections completed (City of Calgary: Certificate of Compliance). That distinction matters. If I see a newer deck, garage, addition or other improvement, I do not assume that an RPR compliance certificate answers every question about it. Depending on the property, permit history may deserve its own review, and the City of Calgary specifically notes that permit history is separate from its Certificate of Compliance process (same City of Calgary page). Whether an RPR, compliance certificate, title insurance or another arrangement is required for a particular transaction depends on the contract and closing circumstances. I would rather explain what the specific purchase requires than tell every buyer there is one universal rule.

Condo documents. Condominium documents can include bylaws, budgets, financial statements, reserve-fund information, meeting minutes and other records relating to the condominium corporation. The purpose of reviewing them is not simply to confirm that a stack of PDFs exists. We are trying to understand what you are buying into. I pay particular attention to the corporation's finances, reserve planning, insurance, bylaws, recent decisions and the issues being discussed in meeting minutes. Minutes can be especially useful because a problem often appears in discussion before it appears as a special assessment on a piece of paper. A low condo fee means very little to me if the corporation is chronically underfunding the work the building actually needs.

Chattels and fixtures. Fixtures are generally items attached to the property. Chattels are movable items. The contract ultimately matters because assumptions are an excellent way for two perfectly reasonable people to become furious about a refrigerator. If there is an appliance, shed, wall-mounted television bracket, hot tub or anything else you expect to stay with the property, I want it dealt with clearly in the offer rather than relying on what everybody thought was obvious.

Shopping seriously before knowing the budget. There is nothing wrong with browsing listings before getting pre-approved. The problem starts when buyers become emotionally calibrated to homes they may not be able to finance. If you spend three weekends touring at $800,000 and then learn the comfortable budget is $650,000, the $650,000 homes can feel disappointing even though they may have been perfectly good options before the comparison. Financing first keeps the search grounded in choices that actually belong to you.

Treating a pre-approval as final financing. A pre-approval is valuable. It is not permission to forget the financing condition without thinking about it. Both the federal government and RECA make clear that final approval can still depend on the property and on whether your financial circumstances remain acceptable to the lender (FCAC; RECA).

Removing a condition because everybody else apparently is. Sometimes an unconditional offer is the decision a buyer makes. What I care about is whether they understand what they are taking on. A condition should not disappear because the market feels stressful. It should disappear because we have either reduced the uncertainty it protects against or the buyer has consciously decided they can accept that risk. Those are very different things.

Using every available dollar for the down payment. A larger down payment can improve the financing. Having $17 left after possession does not improve the experience of owning the home. Closing costs, adjustments, moving costs and repairs still exist after you decide how much to put down. Keep liquidity in the plan.

Treating condo-document review as paperwork. A condo purchase is partly a purchase of the unit and partly a purchase into the financial and legal affairs of the corporation. The condition of the kitchen is easy to see. The condition of the reserve fund is not. Both can eventually cost you money.