Tips for Buyers

Are you ready? Be sure.

Few joys can match the pride of owning a home, but the responsibility can also come with sacrifices – from the financial commitment to the required care and maintenance. You’ll want to be sure both fit within your current or preferred lifestyle.

Is your bank account ready? Check it twice.

Buying a home is likely the most significant and largest purchase of your life. Do it right with the help of a REALTOR® and avoid regretting taking on more than you should. It’s ideal to have saved up some money and manage any debt. In a couple steps, you can determine how much you can afford.

Is right now a good time to buy?

Markets go up, markets go down and even the most informed experts can’t accurately predict when a market will peak or bottom out. If you’re buying a home as a long-term investment (and for long-term enjoyment), you should be protected from short-term changes in the market. Instead, focus on picking a home that meets your and your family’s needs.

Urban

Sure the prices are generally higher, but you can walk to a restaurant, maybe even to work. You’ll also have the widest range of housing options.

Suburban

Newer schools, modern shopping centres, bigger yards, and bigger homes are just a few of the reasons many people flock to the suburbs.

Rural

Rural living isn’t for everyone but if owning a few (or many) acres of seclusion is your idea of heaven, be sure to expand your search beyond the city lights.

Smaller cities and towns

Smaller cities and towns in Canada are dotted with thousands of wonderful self-contained communities and, compared to the big city, you can save a bundle.

Single-family detached

As the name implies, the home is freestanding and not attached to any homes next to it.

Semi-detached or linked

Two distinct houses (with separate owners and lots) that are built side-by-side and share a common wall.

Duplex

A building on a single lot but that is zoned for two families (each with independent access).

Also known as terrace or row housing, they’re identified as homes featuring a common style and joined in a row. They usually share common walls on both sides.

Sell Your Current Home

If you’re not planning to own two homes at the same time, you’ll need to sell the one you have now. So, do you buy or sell first? Many people are able to time their sale and purchase to happen on the same “closing date,” making their purchase offer “conditional” on the sale of their current home or by extending the “closing period” to give more time to find the perfect home. A REALTOR® can help you decide the best time to enter the market, analyze local market trends to set an agreeable and appropriate price and help promote your home to potential buyers.

Seller’s market

When lots of people are looking for homes but there aren’t many for sale.

Buyer’s market

When there are many homes for sale but not enough people buying them.

Seasonality

This refers to the fact that winter sales tend to be slower in most markets while spring sales typically speed up.

For more information about selling your home, check out our Tips for Sellers.

Get talking

There are hundreds of banks, credit unions and other lenders out there who would love your monthly mortgage payments. So talk to everybody and don’t be money-shy! A REALTOR® can be very knowledgeable about the different types of mortgages and can offer advice based on your needs and comfort level.

Call a mortgage broker

Mortgage brokers are another great resource. Their job is to find low lending rates and they usually don’t get paid unless you sign a mortgage through them – meaning they’re highly motivated to get you the best deal.

Mortgage takeover

Often, you can take over the seller’s mortgage. This is a great option if the seller is locked into a lower interest rate than you can get right now. Your REALTOR® may have additional information.

Mortgage term

Refers to how long the bank has agreed to lend you the money – typically from six months to five years. At the end of the term, you usually renegotiate a new term.

Amortization

Amortization refers to the length of time it will take to pay off the whole mortgage, often as long as 25 years. The longer your amortization, the lower your monthly payments, but the more you pay in interest over time.

Interest rate

Interest is the cost of borrowing money, and the interest rate tells you exactly how much. Using our mortgage calculator, check out the difference between borrowing $100,000 at 6% versus 9% at the same amortization.

Keep in mind you can also choose between a fixed or variable rate. A fixed rate will remain unchanged for the entire term whereas a variable rate will fluctuate as rates increase or decrease throughout your term.

Down payment

Refers to the initial up-front portion you pay against your home purchase. A larger down payment means a smaller mortgage (and less debt).

If you’re a first-time homebuyer with money in a Registered Retirement Savings Plan (RRSP), you can withdraw up to $25,000 without paying income tax through the Home Buyers’ Plan. If your spouse or partner is also eligible, that’s a possible $50,000 you can use towards your down payment. Ask your REALTOR® for details.

Applying for a Mortgage

• Letter of employment (including your position, your salary or rate of pay and how many years you’ve been with the company)
• List of your assets (your car, stocks, bonds, GICs, etc.)
• List of your liabilities (car payments, student loans, credit card debt, etc.)
• Social Insurance Number
• Your chequing account number
• Your lawyer’s contact information
• Information about the house you want to buy

Application fee

Some mortgage lenders charge a fee to process your application. Be sure to ask whether it can be waived.

Appraisal fee

Your mortgage lender may need to have your new home appraised by a professional and they often pass the bill on to you. Sometimes your lender will waive this fee.

Mortgage broker’s fee

Your mortgage broker may charge a fee that’s payable on your closing date. Ask your broker to avoid any surprises.

Land survey fee

Lenders may require a survey of your property, even if it’s an existing survey. Get your lawyer on the case.

Home inspection fee

A home inspection is intended to help avoid surprises and protect yourself and your investment. It usually happens a little later in the process. Don’t worry; we devoted an entire step to it.

Home insurance

Mortgage lenders require you to carry fire and extended-coverage insurance because your home is the security deposit on the mortgage. Often you can have these payments added to your monthly mortgage payments. Shop around.

Title insurance

While not mandatory, it protects you from fraud and potential errors surrounding the title to your land. Ask your lawyer for details.

Legal fees

You’ll pay your lawyer for their invaluable time and “disbursements” which are the costs involved in title searches, drawing up the title deed and preparing your mortgage.

Adjustments

The previous owner may have paid property tax or utilities in advance and they will want to be credited for those payments. Ask your REALTOR® and lawyer what might come up on the closing date.

Maintenance and utility costs

Remember, you’ll now have more regular monthly payments in the form of property tax and utilities.

Property transfer tax

The amount of this tax varies from province to province.

GST/HST and new homes

GST/HST doesn’t apply to resale homes but they will to new homes. If you intend to live in your new home (instead of renting it out), there is some relief. Consult your REALTOR® and/or lawyer for more information.

REALTOR® commissions or fees

REALTOR® commissions or fees are subject to GST/HST.

Find a REALTOR®

A REALTOR® can review your wants and needs to help you determine your price range, as well as answer questions about the markets you’re interested in and help you compare homes and neighbourhoods. Your REALTOR® can also provide access to exclusive listing information, preview properties to ensure you’re only shown homes that meet your needs and budget and make appointments and walk you through homes that interest you.

There are lots of ways to find a REALTOR®:

• As you drive through prospective neighbourhoods, jot down the names and numbers of REALTORS® on For Sale signs.
• Open houses are also a great way to meet face-to-face.
• Maybe your friends and family members have worked with a REALTOR® they love. Ask them to pass your name and contact information along.
• Many REALTORS® are active on social media and can be reached out to directly through Facebook, Instagram, Twitter and LinkedIn.
• If you are browsing properties on REALTOR.ca, you can also contact a REALTOR® directly through the website or a specific listing.

No matter which REALTOR® you select, he or she will advise you of reporting requirements by FINTRAC, the federal agency responsible for administering Canada’s money laundering and terrorist financing legislation and regulations. Your REALTOR® is required by federal law to complete a client identification form and must ask you as a client (buyer) for verified ID such as a driver’s license or passport.

1. Visit REALTOR.ca.

REALTORS® have access to incredible house-hunting tools called MLS® Systems, which are operated by real estate boards and associations across Canada. You can view publicly-available information about MLS® listings on REALTOR.ca. Browse listings that meet your criteria, view photos and virtual tours, share listings with family and friends, explore neighbourhood details and statistics and more. Your REALTOR® can start sending you listings that match your specific criteria right away. Find a REALTOR® today.

2. Visit open houses.

Open houses are a great way to see inside the homes that interest you. If a REALTOR® is hosting the open house, he or she probably knows the local market inside and out, and will be happy to answer your questions – don’t be afraid to ask!

3. Check out real estate ads in local papers.

Your REALTOR® can introduce you to neighbourhoods you’re already – or should be – considering based on your wants and needs. Make note of surrounding schools, shopping and recreational areas. Keep an eye out for not-so-great features like large industrial areas, railway tracks and airports. Visit during the day and at night.

Make an Offer

You’ve found the perfect home? Congratulations! Now, if you actually want to make it yours, you have to make a successful offer, one the seller will accept. REALTORS® can prepare the offer for you. Here are some terms you’ll see:

Buyer

That’s you.

Seller

The present home owners.

Purchase price

The most important number: what you’re willing to pay for the home. Let’s hope the seller goes for it.

Deposit

A cheque you write to the seller or the seller’s broker. This is your way of saying, “my offer is serious”. The amount is up to you.

Chattels and fixtures

Be sure you know what is included with the house. If you’re expecting the seller to leave behind the appliances, draperies or light fixtures, be sure to include that in your offer. Don’t leave anything to chance.

Irrevocability of the offer

The length of time you give the seller to consider your offer. Usually less than 48 hours.

Completion date

The glorious day you take possession.

Clauses particular to this agreement

Every transaction is unique and you may want to add conditions that are important to you, such as a home inspection.

Submitting the offer

You’ve signed on the dotted line and your REALTOR® has provided your offer to the seller.

The seller accepted your offer

Fantastic, when do you move in?

The seller rejected your offer

It’s not common for an offer to be completely rejected. If it was, your REALTOR® can investigate why and see if there was a misunderstanding.

The seller “signed back” or “countered” your offer

The seller wants to alter some part of your offer (most likely the price). The seller will cross out the price on your offer and write a higher number, or delete or alter some conditions. Now it’s your turn to sign back with any additional changes or your acceptance of the counter offer. Good luck!

• Plumbing and electrical systems
• Heating, ventilation, air conditioning (HVAC) units
• Roofing
• Visible insulation
• Walls and ceilings
• Floors and windows
• Integrity of the foundation
• Presence of lead paint, asbestos, mould or pests (termites or mice)
• Out-dated or dangerous wiring

Finding a Lawyer

There are many experienced real estate lawyers out there. Like choosing any other professional, ask your friends, family and co-workers for their recommendations. Your REALTOR® can also give you the name(s) of experienced real estate lawyers in your area.

How will your lawyer help?

There are many legal steps to transferring ownership of land from one person to another. Even if pitfalls like fraud, government legislation, zoning issues or unpaid taxes don’t come up, your lawyer will help make the legal transfer of the home as smooth as possible. A typical transfer of title will require two weeks to complete.

• Immediately begin satisfying any conditions of the agreement that require action on your part. Your REALTOR® can fill out the documents confirming the conditions have been satisfied.
• Ask your lawyer to begin searching title to the property. This can take a while, so make sure you allow ample time.
• Well before closing, arrange your homeowner’s insurance to kick in on your closing date. Your insurance broker will give you a “binder letter” certifying that you’re covered. You can’t get a mortgage without this letter.
• Contact your lender and have them finalize your mortgage documents. Make sure your lawyer reviews them before you sign.
• Your lawyer will transfer essential utilities like hydro and water but you’ll have to make sure telephone and cable companies switch their services to your new address.
• If you rent, be sure to give the required notice to your landlord or sublease your apartment.
• Begin planning your big move. Where are those cardboard boxes?
• Send out your change of address information and fill out a card at the post office. Contact the appropriate provincial agencies about changing your other identification cards.
• Walk through your new home one more time with your REALTOR®. Don’t forget the measuring tape to start planning your furniture arrangement.
• A day or two before closing, you’ll meet with your lawyer to sign the closing documents. Your lawyer will tell you in advance what certified cheque(s) you’ll need to seal the deal.

Closing date and moving date aren’t synonymous.

On closing, it’s likely you won’t get the keys to your new home until late in the day so it might make more sense to schedule the actual move for a day or so after closing.

Get packing

Whether you’re getting the help of friends and family to move or hiring a professional, nobody will take the same care you will. Start early and spread it out over many days. Label all your boxes by room (and especially if the boxes carry anything fragile) so the movers know where to put them and how to treat the boxes.

All moved in

The boxes are mostly unpacked and you’re settling in nicely. You will now feel a strange urge to begin making changes and improvements right away. Sure, that old carpet has to go and a bigger deck would be great for entertaining but slow down! Take the time to get a feel for your new home and, more importantly, your new budget. Take a deep breath and enjoy what you have: your new home.

Bonus Tip: Moving into a new home is a chance to start fresh. Take the opportunity to purge by either hosting a garage sale or donating items you no longer use or need to charity.