Whether you are looking for a house or condo, the path to homeownership has many steps. Below is an outline of the buying process and what you should expect on the path to buying your home or condo. This quick guide gives you a clear overview of how to successfully navigate the home buying process.
Your Realspective Buyer Specialist will be with you every step of the way when you buy with us. They know the process and can explain the condo buying process in more detail.
Step 1: Get Pre-Approved For Your Mortgage
Not being approved before viewing homes is like putting a blindfold on and driving a car. It's a recipe for disaster! The "mortgage" word sounds a lot scarier to people than it actually is. Getting pre-approved for a mortgage really just gives you the ability to understand how much you can afford when buying a home or a condo.
Talk with your bank and a Mortgage Broker. The banks literally say all the time "get a 2nd opinion" anyway 😉 . They'll look at your financial situation and what you are looking to buy (pre-approvals for houses and condos are actually calculated differently) and let you know what the maximum you can afford is.
A good Mortgage Broker will also help you decide on what a comfortable home purchase budget would be based on your financial situation.
Using a Mortgage Broker is FREE and doesn't commit you to anything. It's simply a way to lock in rates and understand your financial situation better before house hunting. Mortgage pre-approvals are typically good for 120 days, so you'll have plenty of time to buy. If you're not buying right away, just let your Mortgage Broker know, they can hold off on a formal approval until the time is right.
Be Aware Of The "Hidden" Costs Of Buying
Most people know that you need to save up a down-payment to buy real estate, but not everyone is prepared for the "hidden" costs of buying a home for the first-time, or for the first-time in a long time, as there are several costs to be aware of.
Beyond the down-payment for your home you'll have some other expenses that may include:
Land Transfer Taxes (LTT)
Municipal Land Transfer Taxes (MLTT)*
PST on Mortgage Insurance
If you're a non-resident you may have to pay a Non-Resident Speculation Tax (NRST) when buying in the GGH (Greater Golden Horseshoe). For more information on that NRST please click here.
Your Realspective Buyer Specialist will help you make sure there are no surprise costs when you buy with us. If you want more info on how much each of the above costs click here.
Step 2: Create That Wish List
This step is easy for most buyers. Before you get too deep into the home buying process you should create a wish list of "must have" and "nice to have" items. Maybe you desire an Instagram 📸 worthy view or maybe you have a husky, so A/C and a pet-friendly building are a must-have for your pup 🐶 ... Whatever it is write it down.
Some factors you'll want to think about when creating your wish list:
Access to Public Transit
Parking (buy or rent)
Location. Location. Location.
Monthly Carrying Costs
House, Condo, or Townhouse
Urban vs. Suburban
Type of finishes in the home
Once you have this list, discuss your wish list with your Realspective Buyer Specialist. They have a wealth of market knowledge and will be able to help you figure out what's realistic and what's going to be tough to find on your budget. We know though that whatever you're looking for we can help you find the right place to call home.
Step 3: The Home Search Process
We're excited to start searching for the right place for you to call home. Once you are pre-approved and have your wish list complete, we can start the home search! Our website is a great place to view different properties and get a sense of the market, but once your search reaches this point you need real-time data and properties.
We give you access to a powerful search tool that gives you real-time property alerts that put the hottest new properties in your inbox instantly (or as frequently as you wish, we know you can't just surf real estate all day at work). Collaborate (Collab for short) gives you the same MLS system that Real Estate Agents have access to.
Just like your favourite dating app, Collab allows you to like, share, and chat with your Realspective Buyer Specialist about listings during your search for a place you'll ❤️ to call home. If you don't find Mr. or Mrs. right online... we'll at least help you find the right place to call home.
Collab is exclusive and you must be invited by a Toronto Realtor. Click the button below to email us for access to this tool.
Step 4: Viewing Properties With Your Agent
Viewing properties is an art and a science. You have to be ready to view a property at the drop of a hat, as the best properties usually get snatched up quickly.
When you initially start working with your Agent let them know the following information:
The best way to reach you (FB Messenger, cellphone #, email, et cetera)
When are you free to see properties (after work, lunchtime, weekends, et cetera)
What you’re looking for and what area of the city
When viewing properties you should do so with a game plan, otherwise different homes will start to blend together and you’ll forget which homes had what features. Make sure to make a few quick notes (using your phone or pen and paper) after viewing each property and score that home from 1 to 10.
Other things you’ll want to think about when viewing the property include the condition, beyond just the cosmetic details. How old are the appliances? Do the major mechanicals need work? Is it really as updated as it looks? Is the staging being used to hide anything?
Staged and cosmetically updated homes can feel newer than they are, so make sure you’re allowing yourself to look past the initial wow factor of the property.
Step 5: Making An Offer
This step is a big one and this is where buyers typically get cold feet. If you’ve followed the first 5-steps though you shouldn’t have any worries making an offer.
Your Agent will now draft an Agreement of Purchase and Sale (or APS for short) that you’ll sign and submit to the seller of the property. The APS will outline the price you’re willing to pay and the terms on which you’re willing to buy the home. You’ll include a list of any items that you want to remain in the homes (I.e. appliances, light fixtures, TV mounts, et cetera) and include any conditions you require (such as a home inspection or financing).
Speak with your Agent to find out what terms can hinder or make your offer more enticing, you’ll likely be negotiating with the seller on the terms of the sale. So figure out what you’re willing to give up to find a win-win solution. Usually if you don’t get to a win-win the deal doesn’t happen in our experience. Everyone during a negotiation has to be willing to sacrifice something. What’s a minor detail to you as the buyer might mean everything to the seller, so make sure your Agent asks before you make an offer what things are important to the seller.
Step 6: Closing the Deal
If you’ve reached this step, it means your offer was accepted! That’s a great feeling, but it also means there is a few more things that you must do as a buyer to close the deal.
The first thing you must do is deliver the deposit to the listing brokerage. Your Agent will help you do this via courier, they may personally deliver the bank draft for you, or help you send it via wire transfer (depending on the brokerage). The deposit is typical due herewith (I.e. submitted with the offer) or in many cases upon acceptance ( must be delivered within 1-business day).
It’s very important to make sure that your deposit money is liquid and sitting in your bank account as soon as you start looking at homes. Your money shouldn’t be in an investment account, TFSA, or somewhere else… definitely not shoved under your mattress. Why? Because most transfers take 2-3 business days from an investment account and therefore you wouldn’t be able to deliver the deposit within time.
On top of delivering the deposit within 1-business day, you’ll also have to fulfill any conditions that you had within your offer. In a perfect world all offers would be FIRM, but that’s not always the case.
If you have a financing, home inspection, or status review condition (if you’re buying a condo) within your offer speak with your Agent. They’ll remind you what timeline these conditions need to be fulfilled within.
To fulfill the conditions you’ll need to sign a Notice of Fulfillment and provide a signed copy to the seller of the property before the condition expires. Therefore it’s important that everyone is aware of the timelines for any conditions. Loop in your home inspector, lawyer, or mortgage professional if needed when drafting an offer to make sure they can meet any timelines you’re setting with the offer you are making.