BUYING IN TORONTO

IS IT THE RIGHT TIME TO BUY?

Wether you are a first time buyer, move up buyer or a down sizer. The number one question is always the same. The answer is, buy when you can afford it! Real estate is typically a long term hold that you trade up along the way. Life is full of twists and turns so take advantage of the opportunity when it makes the most sense for you. 

First time buyer's focus on saving for a down payment.

• If your expenses are low, pay yourself the difference that would be a mortgage payment every month into a separate savings account. 
• Utilize an RRSP everything you contribute is a tax deferral lowering your yearly income tax.
• First time buyers are able to use up to $35,000 from their RRSP savings towards a down payment. 
• You don't need a 20% down payment. First time buyers can put as low as 5% down on $500,000 and an additional 10% down on anything $500,000 - $999,999

$500,000 x 5% = $25,000 You may be closer to a down payment then you thought. 

Move up buyers is it time to pull your equity?

Maybe you bought your bungalow for $650k in 2017 since then your family has expanded and now its time for something bigger. 

How much is your home worth today? How much will it cost to move? 

It's important to look at the details of your mortgage. Know how much you'll need to pay off your mortgage. Have you refinanced or used a line of credit? Do you have a large penalty if you break your mortgage? Is it portable? 

After your mortgage is paid you will need to consider real estate fees, land transfer tax and closing costs. 

If you have ever rented out your home or a portion of it there will be capital gains tax as well. If not then you wont have to worry about any capital gains. All profits will be 100% yours to keep. 

Having conversations with your realtor, mortgage broker, lawyer and accountant are important to leverage your current homes equity and get the home you really want. 

Down sizing to cash out! Maybe it's time to retire or semi retire. Your current home is too big and you're tired of paying a mortgage. 

You will need to consider your income in the years to come do you have a savings or pension? Is your current home profit going to account for the majority of your retirement savings? 

Similar to a move up buyer you will need to account for all expenses involved in paying off any mortgage, real estate fees,  land transfer taxes, and closing costs. 

Where do you plan on buying? Will you be moving out of the city or even out of the country? Are you looking for a house or condo? 

Having a realtor with the right network will make this a much easier process. 

No matter what stage of the property ladder you're in trying to "time" the market can be extremely difficult. Make a decision on what works for you now. 

FIND THE RIGHT REALTOR.

Mask sure to find the right person for the the job. Interview a few agents until you find someone you're comfortable with. 

Things to consider: 

• Networking capabilities
• Market knowledge 
• professionalism
• ethics
• communication  skills 
• support team 
• problem solving
• Honest and integral 

Many agents will possess these attributes, others won't you should be able to quickly get a feel for the agent your speaking with.

You will be spending a lot of time with your realtor. Above having the skills to secure the right home for you, you'll have to like them. Is there a genuine connection? Do you trust this person?

The last thing you need is a yes man just trying to get a deal done. You and your realtor will be collaborating together there should be a level of comfort and open communication. 

GET PRE APPROVED

Before you can start searching you'll need to know how much you can afford. If  you have already chosen a realtor that you would like to work with they should be able to put you in touch with a great mortgage broker. You will also have options with your local banking institution. 

A mortgage pro will take into consideration your last two years of income, credit score, outstanding debt/monthly obligations, down payment and current interest rates to calculate affordability. 

They will help determine what is the best option for you. Fixed rate vs Variable rate, Closed vs Open and length of the term. 

Mortgage brokers tend to have more opportunity when it comes to finding you a mortgage by shopping the large banking institutions as well as private lenders. Your bank can be a great option but are limited to only offering their products. 

With your pre approval in hand it's time to start hunting.

SEARCHING FOR HOMES

You have found the right realtor and you have been pre approved.
To make the most out of your time it's good to have a plan.

• Research desired areas with your realtor.
• How does your budget hold up? 
• Bedrooms 
• Bathrooms 
• Garage/Parking
• Yard
• Schools 
• Transit Score 
• Shopping 
• Walk Score 
• Fixer upper vs New Renovation
• Parks and Trails 
• Lifestyle

Make a list of your wants vs needs. What can be compromised and what cannot. Maybe the detached home in the perfect area is now out of your budget. Do you consider a townhome or look into different neighborhoods. 

Your realtor will set up private showings for you to tour homes together. Weekend open house's are great opportunities to see homes as well. 

When you create a plan with your realtor and take advantage of the time together touring homes you will be able to make confident and informed decisions. 

MAKING AN OFFER

When you find a home that works for you, its time to put an offer together. 

Before putting your offer together it is a good idea to connect with a real estate lawyer, either through your realtor on on your own.

The Agreement of Purchase and sale or "APS" will consist of terms including: 

• price
• deposit
• closing date
• chattels and fixtures
• conditions

Your conditions are contingencies that must be fulfilled by either buyer or seller by a certain date for the deal to go "Firm." If these conditions are not met then the deal may fall apart and deposits returned to the buyer, voiding any contractual obligations. 

Three common conditions include: 

• Financing
• Home inspection 
• Review of status certificate (condo) 

There are many conditions that can included to protect both buyers and sellers. 

Once all of the terms of the APS have been agreed upon the buyer will have 24hrs to deliver a deposit via certified cheque or wire transfer to the listing brokerage. Then the buyer or seller will have 5 business day (on average) to fulfill any conditions.

When your conditions have been fulfilled the deal is now firm and backing out may cost you your deposit as well as other legal ramifications. 

BETWEEN NOW AND CLOSING

Most closing dates are between 30-90 days from the accepted offer. In that time you will be working with your realtor, mortgage broker and lawyer to insure everything closes smoothly. Mortgage paperwork will be finalized. Lawyers will transfer title, check for liens and arrange disbursements. 

What should you be doing?

• Stay in touch. 
• Ask questions
• Transfer utilities
• Arrange movers
• Get quotes if you plan to renovate