Home > Buyers > Home Buyers' Guide

Home Buyers’ Guide

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 - and we want to get the best bang for our 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.

Frustrated at not being able to find a home within your budget? Sign up for FREE customized automatic updates on available homes that meet your criteria and price range.

Want to get a few tips on buying a home? Click here to get my free Home Buyers’ Guide. This is an exclusive paper that will kick start your home selling process.

Property Finder

Would you like a customized sneak preview of new listings the minute they come on the market? Get the inside scoop on hot deals such as foreclosures, estate sales, assumable mortgages, new homes and any other listed property before anyone else.

Have you spent a great deal of time shopping for a home, only to be disappointed because your dream home has either sold or is beyond your budget? This hit-and-miss strategy is time consuming and frustrating. Get up-to-date leads that are updated hourly and directly from the real estate board. View details such as locations, days on market, features, etc.

To get started, please provide some details below (preferred areas, price ranges, home size, etc.), or simply state, “great deal on a central condo” or “any new luxury homes in the West or South.” You’ll have brand new listings waiting in your inbox in no time.

Sign up here.

Get Pre-Approved

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 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, should 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 -- the initial amount you will need for your purchase and the ongoing costs of paying back your mortgage along with monthly costs. The largest one-time cost is the down payment. It usually represents at least 5% of the total price of the property.

Typical One-Time 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.
• Utilities.

The First-Time Home Buyers’ Plan

If you are a first-time home buyer with RRSPs, you can withdraw your savings to use as a down payment for your home under the federal government HBP program. Under the Home Buyers’ Plan, you can use up to $25,000 in RRSP savings ($50,000 for a couple) to finance a down payment on a first home. You are then required to repay your RRSP over 15 years. The RRSP funds must have been deposited for at least 90 days. A signed agreement to buy a new or resale, qualifying home is also required.

Depending upon your situation, it might be to your advantage to access savings through the Home Buyers’ Plan. For example, if you had already saved $25,000 for a down payment - and assuming you still had enough "contribution room" in your RRSP for a contribution of that amount you could move your savings into a registered investment at least 90 days before your closing date. Then you could withdraw the money through the Home Buyers' Plan.

Your $25,000 RRSP would then count as a deduction for the year. You could also use any tax refund you receive to repay RRSP or other home buying expenses. 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 is 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 indicates 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 have established your budget. You have been pre-approved for a mortgage. You have contacted a REALTOR® to assist you with the purchase of a home. Now the fun begins! You will most likely look at a number of 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 medical services, schools and shopping malls.

FREE: Complete Home Buyers’ Guide

Click Here to get my free complete Home Buyers’ Guide.
 

This is an extensive report that will help you consider many more aspects of the home buying process. Topics covered include:

• How to save money on your next move.
• Choose a mortgage to meet your needs.
• How to shave years off your mortgage.
• An explanation of CMHC.
• In-depth review of the offer process.
• Important Offer strategies.