Information for home buyers
Find the right representative: Even if you are not quite ready to buy, a Realtor can be a wealth of information. Let them guide you right from the start to avoid any wrong turns.
Determine what you can afford: Online mortgage calculators are a good place to get an estimate but there is no substitute for a written mortgage pre-approval. This will give you the confidence of knowing what your price range is. This step avoids any disappointments later on and you will not waste your time looking at homes that are out of your range. You will also be protected against interest rate increases while you are searching for your home. A Mortgage Specialist and a Realtor work as a team for Seamless transition into your new home.
Make a Wish List: Determine what is missing in your current home that is causing you to think about moving. Write those items down and communicate these priorities to your Realtor.
Find Your Dream Home: With your priorities set you will be able to make a well informed decision, act on it quickly and buy the home of your dreams.
What are my Costs? Be aware that you will have closing costs when purchasing or selling you home. You may incur some or all of the proposed expenses. Potential expenses are listed below.
Be aware that you will have closing costs when purchasing or selling you home. You may incur some or all of the following expenses.
Mortgage Application: Your lending institution may charge a fee for processing your mortgage application.
Mortgage Appraisal: Your lending institution may send someone to the property you have purchased to ensure the mortgage amount does not exceed the value of the mortgage. Approximate cost is $200, but may be waived depending on your lending institution.
CMHC Insurance Premium: This is only applicable if you are putting less than 20% of the purchase price down as a down payment. You also have the option of adding it to your mortgage so it is not considered a closing cost and it will be absorbed into the mortgage and you will pay it over time.
Land Transfer Tax: This is payable on all purchases and is calculated by a specific formula. Currently the land transfer tax in Ontario is as follows: .5% on the first $55,000; 1.0% on the portion between $55,000 – $250,000 & 1.5% on the balance over $250,000. First time buyers are allowed a rebate of a maximum of up to $2,000.
Home Inspection: Prior to finalizing a home purchase you should have an inspection done by a qualified home inspector to identify any structural, electrical or plumbing problems in the home. This is not mandatory but may be requested by your lending institution. Cost will range from $250 – over $600.
Property Insurance: This cost will vary from one company to another, so shop around for the best rates. The cost will also vary depending on the coverage level you choose, your region and property type. With the purchase of a condominium building insurance is already included in your maintenance fees but you will still need liability, content and home owner improvements to be insured. Cost will range from $300.00 – $700/year. Most companies will allow a monthly payment.
Legal Fees: This cost will vary depending on the lawyer you choose. Expect to pay between $700 and $1,500 for this service.
Title Insurance: A title insurance policy can eliminate the requirement for a new survey. This is an insured statement of the condition of title or ownership of real property, at the time the policy is issued. Approximate cost is $250. – $275.
Status Certificate: Prior to buying a condominium you should request a Status Certificate. This document provides details of the Condo Bylaws, Rules and Regulations, Finances, Suite restrictions and Common Element restrictions. A very important section of the status Certificate is called the reserve Fund, which is the amount the Condo Corporation has set aside to cover repair or replacement of Common Element components ie: roofing, windows, doors, etc. Approximate cost is $100.
Real Estate Fees: Generally Real Estate Brokerages charge the Seller of a home a percent of the final sale price. This amount is established in a contract prior to listing the property. The Seller usually agrees to also pay the Cooperating Brokerage (Buyer’s Broker) therefore Buyers are usually exempt from this cost. This cost ranges from 4–6%.