Since buying a home is most likely the largest single investment you’ll make in your life, it invokes a mixture of hope, fear, and anticipation. Whether you are a first-time home buyer or a seasoned investor, the principles of home buying remain the same. We all want to find a great home that suits our needs—for the best bang-for-your-buck, as well.
A knowledgeable REALTOR® knows how to find the best home within your price range. My job is to show you what you can realistically expect to get on your budget and work with you to determine what you really want. With access to thousands of local properties on the market, allow me to find a home that is right for you.
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Getting pre-approved for a mortgage determines how much you can afford so you can go home shopping with peace of mind. A pre-approval also shows the seller that you are a serious buyer and allows you to present an offer immediately.
A mortgage broker could save you time and money as he or she has access to discounted rates. The broker has access to a number of financial institutions and finds a lender which offers the best mortgage terms and conditions given your situation. This person works for you, not for any particular lender.
In most cases, the services of a mortgage broker are free.
Consider a portable and assumable mortgage
You can take a portable mortgage with you, if you move. You will avoid paying discharge penalties and re-applying, unless you’re moving to a more expensive home. A buyer could take over your payments if you have an assumable mortgage. This could work to your advantage, making it easier for a buyer to purchase your home.
Please refer to the Financing section of this site for more info.
What types of costs will I incur?
There are two types of costs in buying a home—onetime expenses AND the monthly ongoing costs. The largest onetime cost is the down payment. It usually represents at least 5% of the total price of the property.
Typical Onetime Expenses:
- Mortgage application and appraisal fee.
- Property inspection (optional), due at time of inspection.
- Legal fees, due at the time of closing.
- Legal disbursements, due at the time of closing.
- Property survey (sometimes provided by seller), due at the time of closing.
- Land transfer, deed tax or property purchase tax, due at the time of closing.
- Mortgage interest adjustment (if applicable), due at the time of closing.
- Home and property insurance, at closing and ongoing.
- Moving expenses, due on the date of move.
Typical Monthly Expenses:
- Mortgage payments (principal and interest).
- Maintenance (this could be condominium fees, or allocated maintenance fees).
- Property and content insurance.
- Property taxes.
The Home Buyers’ Plan
If you are a home buyer with RRSPs, you can withdraw your savings to use as a down payment for your home under the federal government HBP program.
The Home Buyers’ Plan (HBP) is a program that allows you to withdraw funds from your Registered Retirement Savings Plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability. The HBP allows you to pay back the withdrawn funds within a 15-year period.
You can withdraw funds from more than one RRSP as long as you are the owner of each RRSP account. Your RRSP issuer will not withhold tax on withdrawn amounts of $35,000 or less. Some RRSPs, such as locked-in or group RRSPs, do not allow you to withdraw funds from them.
Certain conditions must be met in order to be eligible to participate in the HBP, including the following:
- you must be considered a first-time home buyer
- you must have a written agreement to buy or build a qualifying home, either for yourself or for a related person with a disability
- you must be a resident of Canada when you withdraw funds from your RRSPs under the HBP and up to the time a qualifying home is bought or built
- you must intend to occupy the qualifying home as your principal place of residence within one year after buying or building it. If you buy or build a qualifying home for a related person with a disability, or help a related person with a disability to buy or build a qualifying home, you must intend that the related person with a disability occupies the qualifying home as their principal place of residence
In all cases, if you have previously participated in the HBP, you may be able to do so again if your repayable HBP balance on January 1st of the year of the withdrawal is zero and you meet all the other HBP eligibility conditions.
Prior to making any major financial decision, check with your financial advisor, lawyer, or tax specialist. These professionals can determine whether this strategy is practical for your financial situation.
Making an offer to purchase
When you have found the home you want, you will need to make a formal written offer—this is the “offer to purchase.” This is a legally binding document which should be completed with due care and diligence. This document outlines the terms and conditions that you, the buyer will give to the seller in exchange for the home.
To prevent any costly errors, it’s highly recommended that a real estate agent or lawyer prepare the offer on your behalf. Review the document before signing. If there is anything you do not understand, be sure to ask for clarification. Once signed, the document is binding and you could face consequences upon default.
Your REALTOR® will discuss the offer with you to ensure you understand all details. The offer should clearly outline all terms, conditions and details of the sale, including:
- Buyer and seller information. This includes items (for both parties) such as name, legal and civic address of the property to be purchased.
- The purchase price.
- Any inclusions or exclusions in the purchase price (e.g. appliances, carpeting, fixtures, etc.) related to the original listing. Be sure there are no liens or payment dates due on these items.
- Detailed financial information such as the deposit amount, refund of interest on deposit, down payment and mortgage, etc.
- Closing/possession date for the sale of the property.
- If you are assuming the seller’s mortgage, ensure all details are outlined. If the mortgage is not being assumed, the owner needs to provide supporting documents, to show clear title (free of all encumbrances). Existing mortgages must be discharged with sale proceeds on closing.
- Any conditions to sale, such as satisfactory home inspection, financing approval, sale of an existing home, etc.
- Any work/obligations to be completed by seller between the closing date and the date of occupancy (e.g. repairs, painting, leaving the premises).
- Offer time frame for which the offer is valid. The offer either expires or is up for re-negotiation on that date.
- A Real Property Report (RPR) is mandatory by the financial institution for mortgage approval and by the lawyer or notary for transfer of ownership. This certificate shows outdoor improvements from the date of construction, such as decks, patios or pools.
Check out the complete Home Buyers’ Guide below for an in-depth review of the offer process and different offer strategies to consider.
See the big picture
Buying a home represents one of the biggest investments you will ever make. But that investment goes beyond financial considerations.
Carefully consider your present and future lifestyle needs. For example, will your home be adequate for the addition of children or pets? You will also want to think about the time and money required for maintenance of the home.
Suppose you are deciding between a fixer-upper versus a home that is move-in ready. While the home in better condition may cost slightly more upfront, the time and money required for renovations for the fixer-upper may eventually be more than the price difference. A good way to truly evaluate which home is right for you (outside of price), is to consider “must-haves” versus “nice-to-haves.”
House shopping tips
You’ve established your budget. You have a mortgage pre-approval. You’ve contacted a REALTOR® to assist you with the purchase of a home. Now the fun begins!
You will most likely look at several homes before you find the “one.” Before you put an offer on a home, try to step back and be objective. It is very easy to get swept away by emotions. You may get a great first impression from a home, but will it meet your needs in the long run?
Here are some essential factors to consider:
- Location is one of the most significant factors in your choice of a home. A home in a well-maintained neighbourhood with a good reputation and a low crime rate will hold its value.
- Availability and cost of access to public transportation, major roads and highways.
- Condition of public areas such as streets, sidewalks, parks and recreational facilities.
- Public services should also be established including street cleaning, snow removal, garbage collection, and emergency services.
- Efficient access to amenities like medical services, schools and shopping malls.