Buying Information

Buying a Home

An Explanation of the Process

A REALTOR will not take it for granted that you know all the in’s and out’s of the buying/ selling process. Instead, he or she will provide you with a full explanation of what to expect and that’s important so you’re not faced with any surprises along the way.

An Assessment of Your Needs

One of the first questions a REALTOR will ask is, “Why are you moving?” A REALTOR will also explore any time constraints you might have (perhaps imposed by the need to relocate for employment), your financial situation and any future plans.

A Plan to Find Your Dream Home

A REALTOR will help you identify what you want in your new residence. A pool? A garage? An extra room? A particular building design? What about the neighbourhood? Proximity to schools or work? A REALTOR will compare your needs, wants and budget with what is available on the market and make recommendations that save you time and effort.

He or she will also accompany you as you view houses and help you assess their suitability and price.As an expert on a property, a REALTOR can provide facts on the neighbourhoods, the cost of heating, the condition of the furnace, and so on.

In other words, he or she will work with you to achieve your “dream.”

Access to Properties for Sale

Multiple Listing Service or MLS is an exclusive service accessible only through a REALTOR and it can be a valuable tool.Through MLS, the details of a wide variety of listed properties are made available to the REALTOR you work with. That can save you a tremendous amount of time and effort in your hunt for the right home.

If you are interested in learning about what is available on the market please check out my Toronto Listings page, which enables you to preview properties for sale.

Knowledge of Financing Options

REALTORS have extensive knowledge of the financing choices available to home buyers and their options and obtaining financing at the most attractive prevailing rates and terms.

Honesty and Integrity

Most real estate professionals in our province are member of the Ontario Real Estate Association (OREA) and only members of OREA can call themselves REALTORS

When you work with a REALTOR, you can expect not only strict adherence to provincial laws, but also adherence to a Code of Ethics. And that code is very important to you because it assures you will receive the highest level of service, honesty and integrity.

Highest Professional Standards

Before receiving a real estate license, candidates must successfully complete an extensive course of study developed by OREA on behalf of the Real Estate Council Ontario.That is only the beginning:in the first two years of practice, licensees are required to successfully complete three additional courses as part of their articling with an experienced broker. In addition, all licensees must continue to attend courses throughout their careers in order to maintain their licence.

Interested in Buying a Home?

If you are interested in buying a home please feel free to fill out the form below or call me and I would be more then happy to answer any questions you might have.

We only collect personal information necessary to effectively market and sell the property of sellers, to assess, locate and qualify properties for buyers and to otherwise provide professional services to clients and customers. We do not sell, trade, transfer, rent or exchange your personal information with anyone.

Closing Costs

Closing costs are a list of charges your lawyer presents to you on the closing date of your home.Many people are surprised at the additional costs over and above the price of the home.According to the CMHC and GE Capital you should have at least 1.5% of the purchase price for closing costs in addition to the down payment (I suggest around 2% – 2.5% to be on the safe side).The costs vary among provinces and cities.

Below you’ll find an example and a brief explanation of these costs.Please note these are some of the closing costs you may encounter depending on your specific situation.Use this as a guideline then talk with your lawyer who can provide a more realistic estimate for your situation.

Closing Costs Example

Purchase Price: $275 000.00
Down Payment:$13750.00
CMHC Premium: $9796.88
Principle:$271 046.88
CMHC Premium is based on 5% down.The rates may vary depending on when you decide to purchase.

Closing Costs

PST on CMHC Premium: $783.75
Land Transfer Tax: $2600.00
CMHC Application: $165.00
Home Inspection: $250.00
Appraisal Fee: $300.00
Legal Costs: $1070.00
Title Insurance: $250.00
Closing Adjustments: $250.00+
Home & Fire Insurance: $40/ mo. or $480/ yr.
Interest Adjustments* $Depends on closing date
Hydro New Account: $300.00
Estoppel Certificate Fee*** : $100.00
Est. Total: $6148.75

*** Only applies to condos

This doesn’t include other costs like cable, phone set-up fees or your moving costs.This is why I would recommend having at least 2 – 2.5% cash in your bank to cover closing costs.You’ll notice the numbers I’ve provided here work out to just under 2.5% of the purchase price.

Also if the seller paid his/ her taxes for the year in one lump payment in February and you move in June then you will have to pay the seller the remaining taxes for the year because they pre-paid

*Most mortgage companies make your monthly payments due on the 1st of the month or the 1st and 15th if you’re on bi-weekly payments.If you move in on the 20th of the month the bank will calculate the interest from the 20th of the month to the end of the month and either bill you on closing or including it in your first mortgage payment.

**If you’ve never had to pay hydro to Embridge directly they will want a approx. 200 deposit which they hold for one year then apply it as a credit to your account

Appraisal Fee – Generally done with new homes

The appraisal provides the lender with a professional opinion of the market value of the property.This cost is normally the borrower’s responsibility and it can range between $100 to $300 plus HST.Sometimes the costs may be higher for larger, custom-built homes or homes in a remote area.

Home Inspection Fee – Generally done with resale homes

A professional inspection of the home, top to bottom is for the benefit of the buyer.A typical home inspection can cost anywhere from $300- $400, and is well worth the investment. If the home is older then 5 years a home inspection is a must for buyers.When hiring a home inspector, make sure the inspector has liability insurance, just in case a mistake is made.

Fire Insurance

All mortgage lenders require a certificate of fire insurance to be in place from the time you take possession of the home. The amount required is generally the amount of the mortgage or the replacement cost of the home. This cost can vary on the property size and extras being insured, as well as the insurance company and the municipality.The cost can vary anywhere from $250-$600 for most properties.

Provincial Sales Tax 8%

If your mortgage is CMHC or GE Capital insured (less than 25% down payment), there is P.S.T. of 8% in Ontario, payable at closing, on the CMHC or GE Capital fee. While the insurance premium can be added to the mortgage amount, the P.S.T. must be paid at closing. For example, a mortgage that results in a $1,000 fee, will have to pay $80 in PST upon closing.

Land Survey Fee or Title Insurance Fee

A recent Survey of the property is usually required by the lender, and if one is not available, it normally costs anywhere from $600-$900 for a new survey. In lieu of the Survey, most lenders today will accept Title Insurance, at a much lower price of approximately $250.

Legal Costs and Disbursements

A lawyer or notary will charge a fee for their professional services involved in drafting the title deed, preparing the mortgage, and conducting the various searches. The disbursements, on the other hand, are out-of-pocket expenses incurred, such as registrations, searches, supplies, etc., plus G.S.T.

Land Transfer Tax

Most provinces charge a land transfer tax, payable by the purchaser, and the amount varies from province to province. This tax is based on the purchase price (refer to mortgage ABC's for exact calculation). In Ontario, first time home buyers who purchase a new home get a refund up to $1725. Click here for more information on Land Transfer Tax.

New Home Warranty

In many provinces, new homes are covered by a new home warranty program. The cost to the purchaser for this warranty is approximately $600 and should the builder default or fail to build to an agreed-upon standard, the fund will finish or repair the deficiencies.

Mortgage Application and Processing Fee

On a high-ratio insured mortgage (mortgages above 75% of the purchase price), the mortgage insurer (CMHC or GE Capital) charges a fee of $165-$185 for applying and processing the file, as well as appraising the property. On new homes, this fee drops to $75.

Closing Adjustments

An estimate should be made for closing adjustments for bills that the seller has prepaid such as property taxes, utility bills, and other charges. Any bills after the closing date are the purchaser's responsibility. Your lawyer/notary will let you know what they are exactly once the various searches have been completed.

G.S.T.

On the purchase of a newly constructed home, HST is payable, but make sure you know who pays this, you or the builder. Therefore, on the offer, the purchase price will say "Plus HST" or "HST Included", and who gets the HST new home rebate. A lot of builders have included this cost into the purchase price so that the buyer does not have to come up with that at closing. (As well, this tax is also charged on all professional fees).

Title Insurance Explained

Title insurance is growing in popularity in Canada. But what is it exactly? Should you get it? Do you need it? Whether title insurance is right for you is something you should discuss with your lawyer, as it depends on the circumstances of your transaction. This article will provide you with some background information about title insurance to help you make an informed decision.

Title to Property

Title is the legal term for ownership of property. Buyers want "good and marketable" title to a property - good title means title appropriate for the buyer's purposes; marketable title means title the buyer can convey to someone else. Prior to closing, public records are "searched" to determine the previous ownership of the property, as well as prior dealings related to it. The search might reveal, for example, existing mortgages, liens for outstanding taxes, utility charges, etc., registered against the property. At closing the buyer expects property that is free of such claims, so normally they must be cleared up before closing. For example, the seller's mortgage will be discharged and outstanding monetary expenses (such as taxes and utility charges) will be paid for (or adjusted for) at closing.

Sometimes problems (or defects) regarding title are not discovered before closing, or are not remedied before closing. Such defects can make the property less marketable when the buyer subsequently sells and, depending on the nature of the problem, can also cost money to remedy. For example, the survey might have failed to show that a dock and boathouse built on a river adjoining a vacation property was built without permission. The buyer of the property could be out-of-pocket if he is later forced to remove the dock and boathouse. Or, the property might have been conveyed to a previous owner fraudulently, in which case there is the risk that the real owner may come forward at some point and demand their rights with respect to the property.

Who is Protected With Title Insurance?

Title insurance policies can be issued in favor of a purchaser (on new/resale homes, condos and vacation properties), a lender, or both the purchaser and lender. Lenders will sometimes require title insurance as a condition of making the loan. Title insurance protects purchasers and/or lenders against loss or damage sustained if a claim that is covered under the terms of the policy is made.

Types of risks that are usually covered under a title insurance policy include: survey irregularities; forced removal of existing structures; claims due to fraud, forgery or duress; unregistered easements and rights of-way; lack of pedestrian or vehicular access to the property; work orders; zoning and set back non-compliance or deficiencies; etc. For a risk to be covered, generally it has to have existed as of the date of the policy. As with any type of insurance policy, certain types of risks might not be covered, for example, native land claims and environmental hazards are normally excluded. Be sure to discuss with your lawyer what risks are covered and what are excluded.

The insured purchaser is indemnified for actual loss of damage sustained up to the amount of the policy, which is based on the purchase price. As well, some policies have inflation coverage, which means that if the fair market value of the property increases, the policy amount will also increase (up to a set maximum).

How Long is the Insurance Coverage?

In the case of title insurance covering the purchaser, title insurance remains in effect as long as the insured purchaser has title to the land. Some policies also protect those who received title as a result of the purchaser's death, or certain family members (e.g., a spouse or children) to whom the property may have been transferred for a nominal consideration.

In the case of title insurance covering a lender, the policy remains in effect as long as the mortgage remains on title. A lender covered under a title insurance policy is insured in the event the lender realizes on its security and suffers actual loss or damage with respect to a risk covered under the policy. Lenders are usually covered up to the principal amount of the mortgage.

The premium for title insurance is paid once (at the time of purchase). Generally speaking, in Canada the purchaser of the property pays for the title insurance, though there can be situations where the seller pays for it. Some policies automatically cover both the purchaser and lender; others will cover both for a small additional fee.

Protection and Peace of Mind

Title insurance can help ensure that a closing is not delayed due to defects in title. And, if an issue relating to title arises with respect to a risk covered under the policy, the title insurance covers the legal fees and expenses associated with defending the insured's title and pays in the event of loss.

Renting vs. Home Ownership

This is a decision which many people face, and the decision is not as easy to make as it may sound. As a homeowner, you can reasonably expect the equity in your home to increase over time as your mortgage is paid down. That, combined with regular appreciation in property values, can be a rapid and rewarding way to increase your net worth. In contrast, the person renting over the same amount of time is left with no property investment but may have enjoyed lower living expenses and the opportunity to invest in other opportunities.

When comparing owning to renting, you have to add up all of the figures, including the cost of your home, the size of your down payment, utilities, immediate repairs, interest rates and insurance, and compare them with how much you are currently spending on rent. Of course, you also have to place a value on the enjoyment and satisfaction that you will derive from owning your own home.

Tired of Renting?

Please complete the form below to have begin the process of finding your new home. You will receive a response promptly!

We only collect personal information necessary to effectively market and sell the property of sellers, to assess, locate and qualify properties for buyers and to otherwise provide professional services to clients and customers. We do not sell, trade, transfer, rent or exchange your personal information with anyone.

Making an Offer

When it comes time to make an offer, I can as your Real Estate Professional provide current market information and will assist you in drafting your offer. As your Real Estate Professional, I will communicate the offer, sometimes known as an Offer to Purchase, to the seller, or the seller's representative, on your behalf. Sometimes there may be more than one offer on a property coming in at the same time. As your Real Estate Professional, I can guide you through this process.

Firm to Offer Purchase

Usually preferable to the seller, because it means that you are prepared to purchase the home without any conditions. If the offer is accepted, the home is yours.

Conditional Offer to Purchase

Usually means that you have placed one or more conditions on the purchase, such as "subject to home inspection", "subject to financing" or "subject to sale of buyer's existing home". The home is not sold until all the conditions have been met.

Acceptance of Offer

Your Offer to Purchase will be presented as soon as possible. The seller may accept the offer, reject it, or submit a counter-offer. The counter-offer may be in reference to the price, the closing date, or any number of variables. The offers can go back and forth until both parties have agreed or one of you ends the negotiations.

If you would like more information on making an offer, or for more information on buying a home please do not hesitate to call or simply complete the form below.

We only collect personal information necessary to effectively market and sell the property of sellers, to assess, locate and qualify properties for buyers and to otherwise provide professional services to clients and customers. We do not sell, trade, transfer, rent or exchange your personal information with anyone.

Land Transfer Tax

Purchasers in most large Canadian centres can add Land Transfer Taxes to their list of closing costs. Unless you live in Alberta, Saskatchewan, or rural Nova Scotia, land transfer taxes (or property purchase tax) are a basic fact of life. These taxes, levied on properties that are changing hands, are the responsibility of the purchaser. Depending on where you live, taxes can range from a half a per cent to two per cent of the total value of the property.

Many provinces have multi-tiered taxation systems that can prove complicated. If you purchase a property for $260,000 in Ontario, for example, .5 per cent is charged on the first $55,000, 1 per cent is charged on $55,000 - $250,000, while the $250,000 - $400,000 range is taxed at 1.5 per cent. Your total tax bill? $2,375.00.

The following chart illustrates Land Transfer Taxes by province.

ONTARIO

Land Transfer Tax
Up to $55,000 X .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

BRITISH COLUMBIA

Property Purchase Tax
Up to $200,000 X 1 % of total property value
From $200,000 up X 2 % of total property value

MANITOBA

Land Transfer Tax
Up to $30,000 N/A
From $30,000 to $90,000 X .5 % of total property value
From $90,000 to $150,000 X 1 % of total property value
From $150,000 up X 1.5 % of total property value

QUEBEC

Transfer Tax
Up to $50,000 X .5 % of total property value
From $50,000 to $250,000 X 1 % of total property value
From $250,000 up X 1.5 % of total property value

NOVA SCOTIA

Land Transfer Tax

Halifax Metro

1.5 per cent on total property value

Outside Halifax County

Check with local municipality.

Elements of an Offer Explained

There are six key components to the elements of an offer. They are:

Price

Depending on the local market conditions and information provided by me, your Real Estate Professional, the price you offer may be different from the seller's price.

Deposit

Your deposit shows good faith and will be applied against the purchase of the home when the sale closes. As your Real Estate Professional I can advise you on an appropriate amount.

Terms

Includes the total price offered and the financing details. You arrange your own financing or ask to assume the seller's mortgage, especially if it has an attractive interest rate.

Conditions

These might include "subject to home inspection", "subject to you obtaining financing", or "subject to you selling your property".

Inclusions and Exclusions

These might include appliances and certain fixtures or decorative items, such as window coverings or mirrors. These items would remain in the house.

Closing or Possession Date

Generally, the day the title of the property is legally transferred and the transaction of funds finalized.

If you would like more information on the elements of an offer, or for more information on buying a home please do not hesitate to call or simply complete the form below.

We only collect personal information necessary to effectively market and sell the property of sellers, to assess, locate and qualify properties for buyers and to otherwise provide professional services to clients and customers. We do not sell, trade, transfer, rent or exchange your personal information with anyone.

Greater Savings with a Larger Down Payment

The size of a down payment can vary. Depending on the type of mortgage, down payments generally range from 5% to 25% of the purchase price. To obtain a conventional mortgage, home buyers are required to put down at least 25% of the purchase price or appraised value (whichever is less) as a down payment. If you don't have the necessary time or resources to save a full 25% down payment, you can choose a high-ratio mortgage and buy a home with a down payment of as little as 5%. This option is called a high-ratio mortgage and it requires you to purchase default insurance. Whether you choose a conventional or a high-ratio mortgage, one thing is almost always certain: the larger your down payment, the more you save in the long run. A larger down payment

  • Reduces the amount of your monthly principal and interest payment.
  • Reduces the total amount of interest you pay over the life of your mortgage

Ask about the RSP Home Buyers' Plan

The RSP Home Buyers' Plan (HBP) lets a first-time buyer withdraw up to $20,000 from RSPs for a home purchase. The withdrawn amount must be repaid within 15 years, subject to a minimum annual repayment that is 1/15 of the amount withdrawn. If the full $20,000 is withdrawn, the minimum annual repayment is $1,333. If less than the minimum is repaid in any particular year, the balance is added to the taxpayer's income. Want more information? Check the Canada Customs and Revenue Agency Publication.

Insuring Your High-Ratio Mortgage

CMHC or GEMICO may insure a mortgage for up to 95% of the lending value of the house. Therefore, purchasers only need a 5% down payment. Eligible borrowers include anyone who buys a home in Canada intending to occupy it as their principal residence.

Purchasers can use up to 32% of their gross family income for payments of mortgage principal and interest, property taxes and heating. A buyer's total debt load (including consumer loans, etc.) cannot exceed 40% of the gross family income.

People who insure a mortgage loan with CMHC or GEMICO pay an application fee and a premium. The application fee ($75 - $235) covers the costs incurred by the insurer to review the application. The premium is based on the down payment and loan amount. Typical fees range from 1.00% to 3.25% of the principal amount of your mortgage.

Cost:

Premiums range from 1.00% to 3.25% of the mortgage loan amount and can be paid up front or added to the principal amount of the mortgage.

Loan Amount: Up to 95% of the lending value of the house.
Mortgage Term: To be set by the lending institution.
Max.House Price: Varies by market.