If you're reading this page, it's likely you have more questions than answers...possibly 10's or even 100's of questions. Clearly no website can address everything. As I'm sure you'd expect me say, the easiest thing for you to do to get started is to sit down with me for an hour or two for a relaxed, informal conversation. Barring that, let me touch on some of the basic info most buyers ask when they first start looking for a house or condo.
Where do I start?
For most first time buyers and even some returning buyers, the only thing they've decided is that they want to get into the housing market. Once you've decided this, you've really already started...and it's a big step.
So now what?
There is an "A" & "B" answer to this, both equally important, which I usually ask buyers one after the other: A) What can you afford or want to spend? B) What area (or areas) do you want to live in? Often, what you choose to spend dictates where you can live, but fortunately, more so than ever, most people have reasonable expectations. Let's deal with the above one at a time.
What can I afford or want to spend?
Only you can determine what you really want to spend, but if you speak with a lender (bank or mortgage broker), they should definitely be able to tell you what lenders feel you can afford. From there, you can determine how much you actually want to spend. So, STEP #1, speak to a lender. Before you go looking and inadvertently step into a place you cannot afford to buy, know what price range you feel comfortable looking in. STEP #2, with your real estate agent (possibly me), identify what areas or neighbourhoods are affordable to you.
At this point, I usually review some of the up front costs you should also consider when speaking about affordability. Hopefully your lender has addressed them with you, but I find in many cases they don't. Here are some of the more common ones:
Land Transfer Tax (LTT) - This is often the biggest upfront cost. The Province of Ontario has always had a LTT and as of February 1, 2008, the City of Toronto has had it's own LTT. The website I like to use to calculate the LTT is found on the Toronto Real Estate Board's website - http://www.trebhome.com/buying/ltt_calculator/ltt_calculator.htm. Just plug the sale price in. If you are a First Time Buyer, you may be entitled to a LTT rebate. Best to consult a real estate lawyer, but here is the Toronto Real Estate Board's website for LTT rebates for both the Province and the City- http://www.trebhome.com/buying/gov_programs/pdf/govprog_landtransfertax0608.pdf. In a nutshell, the maximum rebate for the Provincial LTT is $2000 and the City of Toronto LTT is $3725. If you are buying in and around the Toronto area, it's not hard for a first time buyer to max out the rebate from both the Province and City.
Legal Fees - Often depends on the price of the property. My only words of advice are, when you ask a lawyer what they charge, make sure you get a "bottom line" or "all-in" cost. Lawyers do a fair bit of work for your closing, but some lawyers quote a base fee and add on all the other charges such as disbursements while other lawyers include the disbursements in their quotes. Examples of disbursements are title insurance, title searches, preparing and registering the mortgage, couriers, photocopies, cheque certification and the like. These are all things that your lawyer would normally do. Costs can vary but fees and disbursements excluding title insurance between $1100 and $ 1500 for a purchase is reasonable.
Title Insurance - There is a wide variation in price, depending on whether the property is new or resale, house or condo, price of property, uses etc.. For straight residential it varies from a few hundred dollars to maybe $1000. Consult your lawyer who can get an accurate quote from a Title Insurance Company. For more about title insurance visit - https://www.fsco.gov.on.ca/en/insurance/brochures/Documents/undstitins.pdf
Mortgage Loan Insurance - This is something you should have covered in Step #1 when you spoke to your lender, but I understand there is a lot of information to absorb and it's hard to remember everything. There are 3 mortgage default insurer providers in Canada that I know of - CMHC, Genworth and Canada Guaranty. If you have less than 20% of the purchase price of a property as a down payment, you have your loan insured and you will be paying an insurance premium ranging from 1.8% and up to 3.6% of the mortgage value (the more the down payment the lesser the premium). Note that non-owner occupied properties, rental properties and cottage properties have higher insurance premiums than what I just quoted. Loan insurance costs are most often worked into the mortgage but may be paid up front.
Home inspection - I've seen them as low as $250 and as high as $650 and you may have to do a number of home inspections before securing a property. As an aside, there are a number of National and Provincial home inspector associations, but from what I know, a home inspector does not have to be licensed. Ask around and get references before you hire someone.
Adjustments For A New Condo Purchase - This is potentially a long conversation, but when you buy a pre-sale/new condo from a Developer, there are often many hidden costs to deal with, that if ignored, may add up to many thousands of dollars, second only to the LTT costs (or if may exceed them if you are a First Time Buyer). You can't totally avoid them, but I can help you reduce them.
Moving and Storage - Don't forget to factor this in. While not a huge cost, it may be as high as several thousand dollars or as low as a few cases of beer and some pizza, depending on your friends.
Some of the less common fees may include:
Lender fees - Most don't, but it depends on circumstance. Again, it never hurts to ask, so make sure to know if the bank or broker are going to charge an application fee, appraisal fee or broker fee to arrange a mortgage on your behalf. I won't even guess the cost as they many vary to a great extent depending on circumstance.
Land survey - A less common expense due to Title Insurance, but if you need one, $1500-$2500 should be a reasonable number to carry.
What areas/neighbourhoods suit me best?
This is a very short answer to a very important question. Though you may do your homework before you start, you really never know where the best fit is until you actually go looking. There are a myriad of different factors that, other than affordability, may dictate where you many want to live. Work, schools, family, friends, familiarity, lifestyle, services, transit...it's a long list which often grows as you start viewing properties. My job is to tease out what is important to you and find the best fit. Don't be surprised if you have your heart set on "Area A" when you first start looking and ultimately buy in "Area B" after you find it may a better fit when weighing all the factors.
Do I have a wish list?
A third important exercise I like to do is to sit down with you and compile a wish list. What are some of the attributes your home MUST HAVE that you can't compromise on? What would be NICE TO HAVE? What do you definitely NOT WANT? It could be anything really, but number of bedrooms, bathrooms, size of kitchen, parking, basement usability, flooring type, lot size are often the big items of discussion. For condos, square footage, floor height, views and outdoor space are really big talking points. Are you willing to do some renovations, and how much? It can be a pretty long list, but it's worth compiling something, which helps me get started somewhere. As mentioned above with respect to neighbourhoods, don't be surprised if some things you thought weren't important come to the forefront, and other previously important issues are pushed back. Remember, house hunting is a fluid and evolving process. My job again is to find the best fit.
Lets go out looking
Once we know what price range to start looking in, the areas we are first going to target and your wish list, together we will assemble a list of properties to view and start the legwork. Concurrently, I can set you up to automatically receive emails in your price range and area of choice as they appear on the MLS system.