Home Buyers Guide: Getting Ready to Buy a House in Toronto
Try this Home Buyers Guide for some tips on your home buying experience.
To begin, there are lots of different types of home buyers out there.
- First-Time Home Buyers: With housing prices higher thus higher deposits, many people buying for the first time are in their 30s and 40s
- Back-in-the-Market Home Buyers: Those that bought 10+ years ago and now want to sell, the market has changed since then
- Trading-Up Buyers: You’ve made money on your house and are on to bigger and better.
- Got-a-Raise Home Buyers: Moving because they got a new job, higher pay, woo hoo!
- Upsizing Home Buyers: Your family has grown with kids, dogs, the cat and you need more room
- Downsizing Home Buyers: Empty nesters who’s kids have moved out and you want to spread your wings into a smaller nest
- Extended Family Home Buyers: Your in-laws are moving in, and you need two living spaces, with room for everyone
- Graduate of Divorce Home Buyer: You are now selling your matrimonial home and making the next decision on your own, for yourself, the best and worst of times
Each potential home buyer has different needs in their search for their next home. Here are some easy steps to follow to help achieve that dream.
- Identify your real estate champion! The word champion is not used lightly here. Your real estate sales representative should be someone that is fighting for you, doing their best for you, standing up for your rights/wants/needs, loyal to you, and your best advocate. This individual should be a full-time professional, who is successful in the business, has great references from past clients, and who puts their clients first. They have to understand your wants and needs well in order to develop the best strategy to find you a house that meets as much of your criteria as possible. They have to be available to you – not substitute one of their teammates or junior members. A great realtor should be a smart, tough, professional negotiator – no tantrums, grandstanding, or divas, please, just someone who knows how to achieve your ultimate goal. Interview several, Google them, ask for references, don’t just settle on someone that’s a warm body. This is a sizable investment and deserves to be in the right hands.
- Get pre-qualified! You’ve chosen your real estate professional and you’ve picked a darn good one. If they are worth their salt, they will have a wealth of people to recommend to you, including the best mortgage professionals. You want to be able to work with an individual who is going to get you the best mortgage at the best rates AND be crystal clear in explaining the details of the process, type of mortgage, the fees, payments, interest rates, and penalties to you. You want to be with a dedicated mortgage professional whose sole job is to find the right mortgage for their clients. In a future blog, we’ll discuss the pros and cons of a mortgage broker that works with only one financial institution versus a broker who is independent and can access mortgages from any financial institution including private lending, but the message here is to get pre-qualified. You should have, IN WRITING, not verbal, an offer from the mortgage broker that lays out the terms of the mortgage, the interest rate, and the expiration date of the mortgage offer. Usually, they are good for 90 days and have a “good until” date. NEVER, EVER, take a verbal quote. It has no bearing. Everything in real estate is on paper, always, for it to count. If someone gives you a quote over the phone, ask for it in writing. That person may quit tomorrow, win the lottery, or otherwise change jobs and that verbal quote is nothing. Plus, once you have that approval letter, you can then consider not including a Finance Condition in your offer, thus making your offer on your future house much more attractive in this competitive market.
- Know Your Price Range: You’re prequalified. You know how much you’ve saved for your down payment. Now figure out how much you want to spend. If you haven’t done your household expenses or budget yet, ask your realtor for a form they should have or go online to find one. Figure out how much you are spending each month and what amount you would be comfortable with for a mortgage payment. And in your “new” budget, don’t forget to include property insurance, property taxes, and funds for maintenance and repair for the new house (a good rule of thumb is 1% of the homes value). You may not spend that every year, but in the years you need a new roof or other big repair, you’ll hopefully have accrued that amount over each year. Also in your new budget, don’t forget to recalculate your utility charges, which may go up or down, depending on what and where you buy. Once you’ve done this, you should have a range that you’re comfortable in purchasing in. TELL your realtor this range. They can then help you find the right house you can afford. You never want to look at homes that are above your price range, as you might be disappointed with what is in your price range unnecessarily.
- Pick Your Neighborhood! Where do you want to live? The Bridle Path or waterfront property may be your first choice, but it may be out of your price range. If you are not sure what IS in your price as a home buyer, ask your fantastic real estate professional you’ve hired. They can help identify neighborhoods that fit your price range and you might be surprised, as they might recommend an area you might not have even thought of but may be perfect for you.
- Identify Your Wants and Needs: Every good sales representative should ask you this question. It’s good to know in advance and review it with them. Do you want four bedrooms, but need three? Do you need a basement with a separate entrance, as you’d like to have a basement apartment? Do you need an ensuite bathroom because you have three boys and refuse to share their bathroom? Figure out what you want and need, that will help to identify what type of house you are looking for and what area, if you haven’t already decided.
- Start Looking with Your Realtor: At this point, you’ve already met with your sales representative to talk about all the points above. You’ve probably been looking at realtor.ca for listings and are now getting listings from your realtor – brand new squeaky-clean ones that aren’t even on realtor.ca yet! Your realtor is booking your first time out to view properties. And you’re off. We’ll talk about what to expect from your first time out looking at properties, in a future blog.
Just like in any investment or endeavor, be prepared. Use some of the points covered in this Home Buyers Guide while you begin your home buying in Toronto. They will help make your home buying adventure successful, positive, and with minimal stress. This is the single greatest investment most people do in their lifetime. You want it to be the best experience it can be.
Would you like more information about the Toronto housing market? Or about a particular area like Toronto West, the neighborhoods of Etobicoke, Mimico, New Toronto, or Downtown? Contact Rayissa at email@example.com or 416-400-0805. Or Sandy at 416-697-7093 or firstname.lastname@example.org. We’d love to work with you!