Where to Start - A Buyer’s Guide
Interested in purchasing a home but not sure about the process? The following guide outlines the sequential steps required to purchase a home. For more details, feel free to contact Claire.
Money Matters - are YOU ready to purchase a home?
The first and most important step is to understand the financial costs associated with a home purchase. Take into account the following expenses:
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Mortgage Down payment: Most down payments for a mortgage are between 5%-25% of the purchase price.
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Offer Deposit: In Toronto approximately 5% of the purchase price is required as a deposit in order to submit an offer on a home. If the offer is agreed to, these funds are held in trust (usually with accrued interest) by the listing brokerage until closing. The funds are then directed towards the cost of purchasing the home. If you are a first time buyer, please note that you can only use your RRSP funds towards the mortgage down payment as these funds will not be available to you until after the deposit is required.
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Land Transfer Tax: The Ontario Government has a mandatory tax that must be paid when purchasing a home, including Toronto. As of February 1, 2008 a seperate Toronto land transfer tax applies to Toronto properties only. The tax amount depends on the value of the home. Here's how to calculate both land transfer taxes:
Provincial Land Transfer Tax
Toronto Land Transfer Tax
0.5% on first $55,000
0.5% on the first $55,000
plus 1% of the amount from $55,001 - $250,000
plus 1% of the amount from $55,001 - $400,000
plus 1.5% of the amount from $251,000 - $400,000
plus 2% of the amount over $400,000
plus 2% of the amount over $400,000
The tax amounts (Provincial and Toronto) added together will give you the total land transfer cost.
Click here to determine your exact amount of provincial land transfer costs. -
Legal Fees: Lawyers fees do vary, however, an average fee for a legal professional is $1000-$2000 plus disbursements.
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Moving Costs-Depending on your moving preferences, the cost can range from $500-$5000. The average price for movers in Toronto for half a day is: $500-$700.
For recommended movers, click here.
What you do not have to pay? ThE HST.
The HST introduced in 2010 does not apply to the purchase of resale properties. However, the tax will be added to fees and services associated with the purchase. For more information contact David Speedie and view the video How will the HST affect my purchase of a home in Toronto.
The HST will apply to the purchase of new homes, but a rebate will be available for those purchasing new homes up to $500,000 if they are their primary residences. A home under $400,000 has a rebate of 6% of the purchase price.
Prepare yourself by obtaining a pre-approved mortgage
Speak with a mortgage consultant to determine what you can afford, and learn about mortgage options that make sense for you. Having a pre-approved mortgage gives you and your agent, the ability to make educated decisions about homes and neighbourhoods that are consistent with your financial situation.
For information about the mortgage consultants whom Claire personally recommends, click here.
Select a real estate agent and CHOOSE WISELY!
Choose a person who is not only an informed professional but also is someone with whom you are comfortable communicating, an individual who, you believe, has your best interests at heart. Questions you might want to ask a prospective buyer agent are:
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How many buyers do you work with at a time?
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What is your experience working with buyers with similar circumstances to mine?
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Will you be personally servicing me or will someone else be showing me property?
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What is your availability?
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Do you pre-screen properties?
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What is your home purchase plan?
Interested in learning how Claire distinguishes herself? Click here to learn about Claire’s Buyer Services
Identify your home preferences and develop a home purchase strategy
Meet with Claire to discuss your home preferences in terms of location, style, neighborhoods, and price. For many, these preferences are difficult to identify initially. Prioritizing your needs does take time and often requires seeing various homes. This is part of the process. Through a detailed buyer needs analysis, Claire will work with you to establish an appropriate direction and home purchase strategy that will meet your needs.
If you are interested in submitting a needs analysis form directly to Claire, please click here.
Educate yourself through e-mail listings
Once a home purchase strategy has been established with Claire, she will begin to send you listings of homes on the market, via e-mail. The intention of these e-mails is to provide you with a preliminary explanation about a particular property and to educate you about the market. Through receiving e-mail listings, you will learn about the quality and value of homes in particular neighbourhoods.
Would you like personalized e-mails sent your way? If so, click here and Claire will get you organized!
Found a home? It’s time to submit an offer
Claire will provide current market information and will assist you in drafting an offer that protects your interests. She will subsequently communicate and negotiate your offer, to the seller, or the seller's representative, on your behalf. In popular neighbourhoods, there may be more than one offer on a property coming in at the same time. Claire can guide you through this process.
Get out and take a look!
Actually seeing homes is the only way to get a true sense of the space and the neighbourhood. Have Claire provide you with a tour of the area, and homes that fit your requirements and budget.
Do you have a home(s) in mind that you would like to see? Click here to book a showing with Claire.
Arrange for home inspection
Claire highly recommends arranging a home inspection. This information will arm the buyer with relevant information about the home and anticipated maintenance fees for the home. Due to the number of set offer dates and multiple bidders, many home inspections are now taking place prior to submitting an offer. This is of great advantage to the buyer as it eliminates many unknowns in the bidding process and allows the buyers to submit a price that they are comfortable with.
Looking for a home inspector? Click here
Hire a legal professional
Once an offer is solidified, it is important for a buyer to hire a legal professional to manage all closing related matters including transfer of title.
Book the movers and start packing!
Claire is happy to offer recommendations concerning resources that can make the moving process as hassle free as possible. For recommended movers, click here
client report
Andrea Cobham