As someone who is buying a home for the first time in Toronto, there are many things you need to know in order to make an informed decision. So get ready and open yourself up to learning a whole lot about this big investment you’re about to make. Pour yourself a glass of wine and relax on a comfortable chair as you learn how to buy a condo or house in Toronto’s market.
Get Pre-Qualified for a Mortgage
How much is your bank willing to lend you? This is the first thing you should find out before buying a condo or house in Toronto. Your lender will check your income, credit history, down payment and debts when you are preselected for a mortgage. He/she will hand you a pre-approval note that outlines your guaranteed interest rate–usually valid for 3 months.
Pre-qualifying ensures you know the amount of mortgage you can get, which subsequently helps you narrow down your house hunting to a specific price range. It also erases the financial risk and uncertainty that often comes with finding your perfect home.
Create a “needs & wants” list
It’s important for you to know what you want and need in your home. As it’s only by knowing what you want that you’ll be able to get exactly what you want. What are those features that you must have, those you’d like to have and those you definitely don’t want? Think floors, appliances and countertops. Also, how will your outdoor space look and how many bedrooms will you like to have?
The location, of course, matters a lot. Out of all the neighbourhoods in Toronto, which one speaks to the needs of you and your family – schools, public transit, parks, restaurants – explore neighbourhoods of interest to find out what communities appeal most to you.
Choose a Real Estate Agent and legal professionals who are an appropriate fit
You don’t have to go through the big ordeal of purchasing a house or condo alone. Find an experienced Toronto Real Estate Agent who will dedicate their services to you alone. You will also need the professional assistance of a lawyer to guide you through the legal aspects of your purchase and a lender to walk you through the available financing options. Finding a professional shouldn’t be much of a big deal, there are a thousand and one of them out there. Get recommendations from your family and friends and do your research. Saying no shouldn’t scare you, carry out as many interviews as possible until you get the right one.
House Hunting in Toronto
With a mortgage pre-qualification and a great Toronto Realtor all set, your next step is to focus on available listings and houses. While you may begin your search by scrolling through realtor.ca, your realtor will show you custom listings that fit your criteria. Your house hunting should entail screening listings electronically, viewing the images of properties online and finally going out to view homes of interest. This gives you the chance to know how the different Toronto neighbourhoods feel, to ask questions and to tweak your wishlist.
While wishlists are a compass that directs you to certain kinds of properties, the fact remains that when a home is the perfect one for you, you may just know immediately when you step inside. Don’t underestimate the power of ‘just knowing’.
Making an offer on a property
Cheers! The efforts you put into hunting for a house were successful, you’ve found the perfect home that satisfies your needs and wants. What’s more? It’s within your price range. Now it’s time to begin the exciting and nerve-wracking process of making an offer.
The first thing that we’ll do is to draft the Agreement of Purchase and Sale(APS). The APS is a document that legally binds you to the price you’ve agreed to pay, the ideal closing date, and the conditions you have to meet for the deal to be sealed. After you submit your offer, the seller can choose to either reject it, accept it or counter the offer. While these back-and-forth negotiations are taking place, you may have to make certain compromises but a strong realtor should be able to help you get the best deal. It’s important that you understand all there is to know about Bidding Wars and Winning Multiple Offers should you find yourself in that situation.
Meet Conditions and Submit a Deposit
In order for a sale to go through, the conditions or requirements stated in the Agreement of Purchase and Sale must be met. The offer you made may include a financing requirement or a condition that permits your lawyer to carry out a home inspection. And you’ll be required to make a deposit that’s about 5% of the purchase price. This will be held in trust until the day the deal closes. Once all requirements have been met, the agreement is settled and you just have to wait for the closing date. Next thing, of course, will be to start packing!
Closing the Deal
When the deal is closed, it means the seller has transferred the possession and ownership of the property to you. This occurs when all the financial and legal obligations have been met. You and your team, which includes both your lender and lawyer, will be involved in closing the deal.
Congrats, as you become a Toronto homeowner!