Is Homeownership right for you?
Buying a home is one of the biggest emotional and financial decisions you will ever make. You need to be prepared and we are here to help you every step of the way. Here are a few things that you should consider:
Renting or Owning: There is a vast difference between renting and buying a home. We suggest you go through the advantages and disadvantages of both and make the decision that best fits you.
Know the Different Types of Ownership:
- Condo/Townhouse: you take care of the inside but you pay a monthly fee for a corporation to look after the outdoor common areas and maintenance.
- Freehold: it is yours and you look after the entire property.
Needs and Wish List: Make a list of the things you must have, like a certain number of bedrooms, garage, fenced yard, close to a certain school area etc. Then do a list of wish-to-have items like a deck, pool, finished rec room etc. These lists will help you down the road when you start looking at homes.
Know the market in your area: The market can be different from neighbourhood to neighbourhood and region to region. Knowing the market in the area you are looking at will help you be prepared.
Choosing the right Realtor
Buying a home is very personal and emotional. Having the right realtor is the key to a successful experience. We have over 100 realtors (link to our agent page) to choose from and we encourage you to interview at least three and then make a decision based on who you feel you can trust and that will have your best interest at heart. Here is what a Sutton Preferred Realtor will do for you:
- A Sutton REALTOR® will explain Agency
- A Sutton REALTOR® will review properties available and select those that meet your criteria
- A Sutton REALTOR® can set you up to receive emails the instant listings that meet your criteria hit the market
- A Sutton REALTOR® will arrange the showings
- A Sutton REALTOR® will provide information to establish market values
- A Sutton REALTOR® will prepare your sales contract
- A Sutton REALTOR® will present and negotiate your contract with the Seller
- A Sutton REALTOR® will provide a list of home inspectors/lawyers for you to choose the one that fits your needs
- A Sutton REALTOR® will assist you with finding financing – click here to get pre-approved
- A Sutton REALTOR® will help arrange inspection
- A Sutton REALTOR® will assist your lawyer to ensure your closing goes smoothly
You should know the price range you can afford before you start looking at homes. It is highly recommended to be pre-approved prior to house hunting. Here are a few things to consider:
Down Payment: You must have the down payment saved prior to purchasing a home. This is usually a percentage of the purchase price. The more you put down, the lower your mortgage will be and in the long run save you more in interest.
What can you afford: You will need to figure out how much savings you will have to put down on the home, how much income you have coming in and expenses going out so you can figure out a comfortable amount to allocate towards a mortgage payment. You need to keep in mind property taxes, monthly utility costs etc. The recommendation is that your monthly housing costs should not be more than 32% of your gross monthly income and your entire monthly debt load should not be more than 40% of your gross monthly income.
Getting Pre-Approved: This will really help you know before you start looking at homes, what you can afford. Another benefit to being pre-approved is you are locked in and protected against rising interest rates. Should the interest rates drop from when you received your pre-approval, you receive the lower rate. To get pre-approved, click on this link (Brad Chambers is our in-house Mortgage Agent)
Finding the right home for you
Most people already have a neighbourhood in mind. Based on your needs and wish list, your agent should be able to suggest options that you might not have considered. Here are some suggestions to keep in mind while house hunting:
Choosing the right neighbourhood: You need to inform your agent if you need to be close to local highways, a particular school area, public transit, walking distance to work etc. Your agent will then be able to give you property values and how they have changed over the past few years.
Finding the right home: Take your time and thoroughly look at each home. Take someone along with you as two pairs of eyes are better than one. Ask questions and with the properties you are interested in, it is suggested you write down what you liked about the home and what you didn’t. This will help if you are choosing between more than one home you find that fits your needs and wish list.
Open Houses: Keep a look out for structural and issues that would cost a lot to replace or fix. Check windows, doors, leaks, water damage, poor drainage, furnace etc. Curb appeal is great but cosmetic changes are not as costly as structural or major issues.
Making an offer
Keep in mind that real estate is an investment and the offer process can be very stressful and it is recommended to not get emotionally attached to the first home you put an offer on. You must be mindful of the seller’s reaction to your offer and any conditions you put in the offer. Here are a few things to keep in mind:
Main Factors of most offers: Price, Deposit, Terms (financing details), Conditions, Inclusions, Exclusions and Closing Date. You then need to decide if you are going to make a “firm” offer which is buying the home as is or making a “conditional” offer which is subject to conditions like home inspection, finance approval, home insurance and sometimes on the sale of your current home.
Negotiating Process: The seller may accept your offer and terms or they may counter the offer back to you. Once there is an accepted offer, your agent should give you a full copy of all signed documents and start the process of the next step…
Making sure your investment is sound
Once you have an accepted offer, your agent should recommend up to 3 professionals to hire to complete the necessary inspections and duties to complete the sale process. Here a few things to keep in mind:
Home Inspection: Is highly recommended and will save you from unexpected surprises down the road. They will be able to check for any defects, structural damage, heating/cooling issues, if the home is properly insulated, roof, any leakage or drainage problems etc. They will supply you a full written report of any defects they have found and an estimate on what it would cost to fix or replace.
Home Insurance: It is highly recommended that you ensure your insurance company has coverage for the specs of the home you are planning on purchasing.
Legal Professional: It is highly recommended that you have a lawyer that is familiar with Canadian Real Estate Law to review your offer of purchase and sale, do a property title search, and ensure property taxes and utilities have been paid and that there are no outstanding judgments or liens on the property. They will be able to assist and ensure the deal closes properly.
Additional Costs to Keep in Mind:
Ontario Provincial Land Transfer Tax (PLTT):
- Up to $55,000 X 0.5% of total property value
- From $55,000 to $250,000 X 1% of total property value
- From $250,000 to $400,000 X 1.5% of total property value
- From $400,000 up X 2% of total property value
The City of Toronto levies an additional LTT on Toronto real estate in addition to the provincial rate.
Land Transfer Tax Rebates: First Time Home Buyers
If you are a first time home buyer you are eligable for rebates for both the Municipal and Provincial Land Transfer Tax:
- Municipal Land Transfer Tax (MLTT): Maximum $3725
- Provincial Land Transfer Tax (PLTT): Maximum $2000
Moving Into Your New Home
If purchasing your home through a Sutton Preferred agent, you will receive moving discounts and coupons via email from local businesses to help save on some of the moving costs. Moving Wolf (our in-house real estate program) delivers these discounts to you and does not sell your email to a third party. Here are some tips for a smooth and stressful move:
- If you are moving from a previous home, make sure all utility companies have been called to cancel services on your moving day and have the services you want working at your new location.
- Shop around and get quotes on boxes, reliable moving companies, rental trucks, pizza for dinner etc. Check out the Moving Wolf discounts and coupons that have been emailed to you.
- Be sure to label all breakables and boxes per room. It will help when unpacking.
- Update your new address with key contacts: Canada Post, doctors, friends, schools, pharmacy, etc. It is worth paying for an auto forward on all Canada Post mail. This will allow you to see who is mailing you at your old address and give you extra time to update them.
- If you have children, include them in the move and remember change can be very overwhelming. Try and make it exciting for them!
- Family pet(s) will be overwhelmed as well. It is recommended to maybe have someone babysit the family pet(s) during the actual move so they don’t happen to get out when it is most likely the doors will be open most of the day.
Welcome Home! Congratulations on the purchase of your new home!