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Buyer's Guide

As a first time home buyer there is a lot to learn. It is one of the biggest investments for most people. Knowing the A-Z of buying a house will help make this process easier. In this guide we will talk out everything you need to know to make the right decisions.

At PSS services we are your trusted Real Estate agent and we strive to give you all the details you need to know for buying a property. We want to make the process of buying a house is stress free for first time buyers. There is a lot of factors that should be taken into consideration when entering the market to buy a house. Being unprepared is one of the biggest mistakes a first time home buyer can make, which in process just slow you down and certain circumstances can lead to you ultimately losing the property to another buyer. 

STEP 1 - Decide to Buy

Before you even go looking for a home, you have to understand your needs. Think about the type of place you’re looking for. Are you looking for a lot of bedrooms and washrooms for your family? Do you want a pool in the backyard? Do you want to live close to a school or a mall? These are just some of the things you have to consider before start looking for a new home.

You also have to familiarize yourself with different types of ownership as well to help narrow down the perfect home. Freehold is when it’s all yours, a condo is when you take care of the inside and pay your fees to an association, and co-op is similar to a condo but you rent a unit in the building and pay maintenance and repair fees.

Once you have narrowed down some qualities, its time to go looking for a home!

STEP 2 - Getting Pre-Qualified for a Mortgage

The first step to buying a house or condo in Toronto is finding out how much your bank is willing to lend you. When you pre-qualify for a mortgage, your lender will look at your:

  • Income
  • Debts
  • Downpayment
  • Credit history

The pre-approval should be in writing and will include a guaranteed interest rate (usually valid for 90 days). Pre-qualifying will ensure that you know how much mortgage you can get, which in turn will help you know what price range of homes you should be targeting in your search. It allows you to focus your house-hunting efforts and eliminates the risk and uncertainty of financing once you find your perfect home.

STEP 3 - Developing your First Time Home Buyer Wish List

Knowing what you need and want in your home is critical. What are your must-haves, your nice-to-haves, and your no-way-absolutely-nots? How many bedrooms do you need? What kind of outdoor space do you want? What about counter-tops, appliances, and floors? You can’t get what you want if you don’t know what you want. Some questions you should ask yourself while you are in this step are:

  • Is the neighbourhood up-and-coming, already there or as-yet-undiscovered? 
  • How busy is the neighbourhood? Do you want lots of activity or peace and quiet? 
  • How many people live in the neighbourhood?
  • What are the demographics of the neighbourhood? Income, age, education and employment?
  • What are the nearby transit options? How often do the subways/streetcars buses run? When does the TTC start and stop in the neighbourhood?
  • Have prices been increasing or decreasing?
  • How long does it typically take a home to sell? Is that higher or lower than the average in Toronto?
  • Do homes tend to sell at or near the asking price, below or above?
  • Is the basement complete? 
  • Do you want to rent the basement to help with your mortgage payment?

These are just some of the typical questions you should ask yourself. These are just the tip of the iceberg, there are many other questions we can answer and help you with to Get the right listings for you.

STEP 4 - Hiring a Real Estate Agent

There are thousands of real estate agents how do you chose one that’s right for you?

You have to pick carefully. They will be acting as your representative and you will need someone to look out for your best interests. You will need someone that you can trust and someone who understands what you want.

A great Toronto Real Estate Agent who works exclusively in your best interests. Think of your REALTOR as the quarterback to the home buying process. They have to be a trained professional who knows your area inside out. A great agent is someone who offers you quality services to help you accomplish your goal.

STEP 5 - Find your Home

Now that you are pre-qualified for a mortgage, narrowed down your search and picked a great Toronto REALTOR to work with, it’s time to start looking at listings and houses. While realtor.ca is a good place to start searching for homes, your real estate agent will send you custom listings that match your criteria.

House hunting will involve screening listings electronically, previewing properties online, and then finally going out to look at homes. This is your opportunity to get a feel for the different Toronto neighbourhoods, refine your wishlist, and ask questions. While a wishlist seems kind of scientific and is a useful tool in deciding which properties to visit, the truth of the matter is that most people walk into their perfect home and just feel it.

One thing to keep in mind is your down payments. This is a percentage of the total cost of a home that you’ll need to pay. The more money you put down, the more you’ll save on monthly payments and cost of borrowing. Another important aspect is getting pre-approved for a mortgage. When the lender approves you for a mortgage, it gives you an idea of how much you can afford to buy your new house.

STEP 6 - Making an Offer

Now that you’ve found the house that you are set on, it’s time to make an offer. Not all offers are the same and here’s where your real estate agent comes in. They will help you with specific terms and conditions that will be specified in the offer like the price you want to pay, financing conditions, or other things like inclusions and exclusions.

Not only is it about the price of the house but you have to carefully look at the other details included in this sale. Appliances, chandeliers, or even minor renovations can also be part of the deal. Shorter or longer closing dates can also be specified in the offer. In Ontario,  your offer must be in writing and will form the Agreement of Purchase and Sale (APS). The APS is a legally binding document which contains:

  • Price you are prepared to pay
  • The amount of the initial deposit or down payment
  • Closing date
  • Conditions that need to be met

Once your agent has submitted your offer, the Seller can accept it, reject it or sign back a counter offer. During these back-and-forth negotiations, you may need to compromise on small things, but a great REALTOR will work hard to get you what you want.

STEP 7 - Closing the Deal

You’re almost a homeowner! Closing is the point at which the ownership and possession of the property are transferred from the Seller to you. It takes place once all the legal and financial obligations have been met. Closing the purchase will be a team effort: in addition to yourself, your lawyer and your lender will all be involved in helping close the deal.

There will be closing costs associated with the sale that need to be paid either by or on the closing date. It can include mortgage application fees, inspections, and legal fees. But once that’s taken care of, you get your new house.

Congrats, welcome to your new home! You’re all ready to move in!

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PSS Services Inc. is your trusted Toronto and GTA real estate broker. We are an official RE/MAX agent and our experts can help you buy and sell properties. We also provide financial services such as Life insurance, Travel Insurance, RESP and RRSP.
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