A simple guide to buying your first home in Ontario in 2022.
You’re ready (or at least think you’re ready) to buy your first home and are overflowed with excitement–followed immediately with a combination of terror and panic. A flood of questions continues to race in your mind every night: How does one go about buying a home? Can I really afford to buy a house in Ontario? What’s the first step of buying a new home? When should I seek real estate legal advice or speak with a real estate lawyer? What type of mortgage can I qualify for? What actually is Land Transfer Tax (LTT)? How much are closing costs actually going to be for a home in the GTA? Should we consider a condo? Was renting really that bad? How come there isn’t a class in highschool about this?
Breathe. Remember, this is an exciting worry to have–you’re talking about buying your first home and most likely, your biggest purchase yet. We won’t sugar coat it, buying your first home can absolutely be overwhelming, but you do not have to go it alone. With the right team of professionals around you combined with your own research, you can experience a smooth closing–even on your first house.
Here are 5 things you should know before buying your first house in Ontario:
Before you start looking and get your heart set on your dream first home, it is a really good idea to get pre-approved for a mortgage. What does pre-approved actually mean? This means your lender will give you an idea of what you can afford based on your income and savings, what your interest rate will be and what monthly mortgage payments may look like. It is important to note that pre-approval is not a guarantee–the home you’d like to buy must be evaluated to ensure the value of the home is approved by your lender. Pre-approval helps narrow your first home search in regards to location, size and type. Although we all like a good open house in your dream neighbourhood on the weekend, understanding where your search should be will help you avoid disappointment and manage your expectations when finding your first home in Ontario. Questions such as town home or detached, and rural or in town, should all be a lot easier to answer after this step.
Determine your budget.
As a first-time home buyer, you may be surprised to learn that your budget goes well beyond the purchase price of the home. When determining the budget for your first house, it is important to understand the closing costs involved. To learn more about closing costs in Ontario click here. Land Transfer Tax (LTT), closing adjustments, appraisal fees, inspection fees, legal fees, utility setup, renovation costs and moving costs need to be taken into account when determining your first home budget. If you are buying a new home or a home in the GTA, you’ll need to factor in higher closing costs. Especially for those purchasing a new build, you may not expect the higher closing costs and will want to review possible hidden fees associated with a new home with a lawyer.
Find the right real estate agent.
A mistake many first-time buyers make is assuming they must use the listing agent of a home they are interested in opposed to finding their own. Taking the time to get recommendations, looking at reviews and researching real estate agents who are experts in the neighbourhood you want to be in is essential. Your real estate agent will be the one guiding you through the optics of the current market to find you appropriate homes that not only fit the features you’d like, but are also a smart investment. On a personal level, it is also important that you connect and feel understood by your real estate agent. Buying your first home can be an emotional process and finding the right real estate agent for you should not be rushed.
Set realistic expectations.
This will help you organize logistics and manage the timeline for buying a new home. Every buyer’s home buying experience is different and as new buyers, you may be surprised to discover just how emotional the process can be. When you set expectations, you can begin to manage those emotions and put logic first in every decision throughout the home buying process. While there may still be disappointment, this is an important step to enjoy what should be a very exciting process. A good exercise when determining if you’d like to move ahead with a particular home is listing out pros and cons. This type of practice along with being patient will ensure you make the right decisions for your current needs and future self. In a house market that can be discouraging and where patience doesn’t seem like an option, we encourage you still to take the time and speak to industry experts.
Seek legal advice
Overall, buying your first home in Ontario, and particularly the GTA, can involve a lot of aspects you may have not even considered. Speaking to a lawyer you trust can help you navigate the process with peace of mind that your best interests are protected. Your real estate lawyer will review the title with you and ensure there are no title issues, along with reviewing the contract to ensure you have the protections you desire. Your real estate lawyer will also highlight the potential risk involved with the transaction. We understand in a fast-paced market it may not be possible to meet with a lawyer, however, we recommend seeking legal advice. Though buying your first house can be an overwhelming experience, you do not have to do it alone–and meeting with a lawyer before you buy can provide an additional level of protection to your investment.
At Titlers Professional Corporation, we understand that buying your first home can be a scary experience. Not only does it impact your immediate environment, but it impacts your possible future investments. Our team of real estate legal professions prides itself on providing personalized, one-on-one attention throughout the entire home buying process to ensure your best interests are protected. To get started on the journey today, contact our team below.