The most important thing you do before you buy is getting prequalified. Hunting around for a new home without a prequalification is much like shopping in a lovely store without your wallet. What’s worse, when you find that beautiful pair of shoes (or home) and then realize it’s not in your budget, disappointment sets in. Knowing what you can afford before you fall in love with your ‘dream home’ is paramount. Please talk to a bank (and I would suggest interviewing several) or mortgage broker (who will shop around banks for you and can save you $ in the long run). Know what you are able to borrow first!
Choose your location. Toronto is a great big city and has many distinct communities to offer. Do you love to spend quiet nights at home with your children (is there such a thing? ) or do you love the night life that Queen/King street has to offer? Do you need direct access to public transportation (streetcars work or subway only)? If you do have school age children, please consider schools and school boundaries. If you are not sure about the boundaries, please have a look at TDSB.com. This fabulous website will ask you to submit the exact address to find out which school falls into which area.
Review the AGREEMENT of PURCHASE and SALE. This is your official ‘offer to buy’ and comes with a long list of legal information that I can and will review with you. However, I also have a copy that comes in what we call ‘plain English’. It’s a good idea to review this before we consider putting an offer in on any property as the better prepared you are…well, the better!
Confirm your lawyer. On the official offer we have to include both the seller’s lawyer information and the buyer’s lawyer information, so have those details ready to go. Talk in advance to a few choices. Most lawyers charge approx $800 for a house closing. If you need recommendations, I’m happy to make a few.
Decide what you can (and can’t) tolerate. Does the idea of buying a ‘full gut reno’ excite you? Do you dream of designing your own kitchen, choosing counter tops and lighting systems? Are you specific about the brand of tub you’d love or have your heart set on what kind of floors you’re after? Or, does all of that make you feel scared and stressed? Houses come in all shapes and sizes…and conditions. Get a sense of what you can tolerate and let’s go from there. Two busy people with full time jobs with 3 kids in tow likely don’t have the time (or patience) for a full fixer up (some do!). Know where you stand.
Are you currently renting? If you are, bare in mind closing dates and your tenant contract. Most contacts will state that you must give 60 days notice (in writing) to the landlord before ending the rental agreement. Be sure of what your contract say as some beautiful homes may close in more (or less) than 60 days. We can always sort through this but it’s best not to have any surprises
Understand your closing costs. This could come a huge surprise to many buyers and I don’t want this happening to you. Your lawyer of choice will be able to go over all your particulars but you’ll need to factor in (aside from your deposit & down payment), lawyer fees, land transfer taxes (we have 2 btw, Ontario and Toronto, possible reimbursement of prepaid utilities bills by the seller, moving/storage costs and perhaps renovation costs. Good to know all of this in advance.
Understand CMHC (which will not affect you if you have 20% down), your deposit (often 5%) and what you have as a down payment. We can discuss all of this in further detail but in general, you will need cash flow in order to make an offer on a new property and this often is expected either at offer time or within 24 hours. Deposits need to be made as a bank draft (personal cheques are not accepted).
Be prepared to commit sometime to the buying process. Some people find their dream home in their very first showing. Some take a little longer. The point is this market is moving fast and houses move fast. If I show you something online that you really like, you’ll need to make some time to see it. Unfortunately, waiting a week to make the time to do so might mean we are too late! My services include ‘previewing homes’ for all of my clients. Once we have our extensive buyer consultation, if you see something you like on paper, let me know. I’m happy to go and view it first for you and report back. If we think that yes, this is worth you coming and having a look, we will book a showing. I know we are all very busy and I try to save you as much time as possible.
Understand the offer process. Negotiations, sign backs, multiple offers, pre-emptive offers (bully offer) are all possible in this market. Let’s talk about all your options in advance so we are able to come into an offer situation with a competitive advantage.