5 STEPS TO BUYING A PROPERTY


I will be with you every step of the way.

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, it’s time to go looking for a home!

There are thousands of real estate agents, so 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.

There are a few ways to look for your perfect Realtor:

  • Jot down some names and numbers that you find on “For Sale” signs
  • Ask friends and family for a recommendation
  • Visit one of the local offices in your area

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.

There are many ways of finding that dream home! First, before you go shopping you have to make sure you are also financially ready. Make sure to have a budget when you go shopping. You can use my very handy affordability calculator by clicking here. 

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.

Keeping these things in mind, you are free to go window shopping! You can go searching for houses according to the different neighborhood surrounding you, check newspaper listings, websites, or even drop by any open houses that are being held in your area. Looking for houses can be really fun and exciting! You can browse listings using the area search on my website, here.

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.

If there is something in the offer that doesn’t satisfy the seller, counter offers or negotiations can also be presented to help get a price that you think is fair.

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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BUYER'S RESOURCES


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Buying a house for the first time is a big and important decision in your life. As someone who represents you and looks out for your best interest, I would like to introduce you to the First-Time Home Buyers’ Tax Credit.

First-Time Home Buyer’s Credit (FTHBC) is a government program geared towards buyers like you. The objective is to reduce costs associated with purchasing a home. As a first time buyer, you are eligible for a 15% income tax credit on a maximum of $5,000 of home purchase costs such as legal fees and land transfer taxes. It can be claimed for the taxation year that you acquired the house.

You are considered to be a first time buyer if neither you and your spouse or common-law partner has owned and lived in another home in the year of the purchase or in any of the four previous years. 

The Home Buyer’s Plan (HBP) is a government program that allows home buyers to withdraw up to $25,000 from their Registered Retirement Saving’s Plan (RRSP) to put towards buying or building a new home. Before you can withdraw funds, you have to be entered into a written agreement that specifies whether you will be buying or building your new home.  You also must occupy this space no later than a year after buying or building this new home. 

To take advantage of this program you have to be considered a first-time buyer. You are not a first-time home buyer if you (or you and your spouse) has owned a home which you have occupied as your principal place of residence in the past 5 years.

Once those conditions are met each person can withdraw up to $25,000 tax-free from their RRSP for a new home. Couples, including common-law, can withdraw up to $50,000. You will not pay income tax on these amounts as long as these funds will be repaid into an RRSP in the future. Existing homeowners can also use this program to purchase an accessible home or a home for a disabled dependent relative. The intended individual must qualify for the Disability Tax Credit (DTC) and this home must be more accessible or better suited to the care of this individual. 

First-time buyers of new and re-sale homes are eligible for rebates on provincial and Toronto land transfer taxes. The maximum that first-time home buyers can receive for provincial land transfer tax (LTT) is $2,000 and for the Toronto LTT its $3,725.

The provincial LTT is payable anywhere in Ontario, including Toronto. As mentioned before, the maximum that a first-time buyer can receive for the provincial LTT is $2,000. For re-sale homes, the provincial rebate only applies to first-time buyers who entered into Agreements of Purchase and Sale after December 13, 2007.

Toronto LTT is payable only for properties in the City of Toronto. The maximum a first-time home buyer can receive is $3,725. The Toronto LTT rebates are in addition to any provincial LTT rebate the buyer qualifies for.

The buyer is considered to be a first-time buyer for the provincial and Toronto LTT if they are at least 18 years of age and must not have previously owned a home anywhere in the world at anytime. If a spouse is involved, the spouse cannot have owned a home or had any ownership interest in a home while he/she was the purchaser's spouse. 

The HST New Housing Rebate program allows you to claim a rebate on part of the HST you pay on the purchase price of either a newly constructed home or cost of building the home. You can claim a rebate on a newly renovated home, a purchase of a new mobile home, or when your home is destroyed in a fire and is subsequently rebuilt.

The purchase price of resale homes are exempted from the HST whereas the purchase price of newly constructed homes are subject to HST.

New home buyers can apply for a 36% rebate on the federal portion of the HST of the purchase price to a maximum of $6,300 for homes costing $350,000 or less. For new homes priced at $350,000 to $450,000 the rebate will be reduced proportionately. Homes priced over $450,000 would not receive a rebate on the federal portion of the HST.

For the provincial portion of the HST, new home buyers can apply for a 75% rebate applicable to the purchase price to a maximum of $24,000.

How Your Credit Score Affects How Much House You'll Be Able To Buy
 

Your credit score is now the most important factor in determining how much house you can buy, so if you are in the market for a new home, you need to understand how it affects you. In order to make it easy for mortgage companies to determine the risk of lending to you, they are using a system called credit scoring (also called "FICO" scores).

When lenders look at your credit report, they can instantly see how much debt you have, how reliable you are with bill payments, and if you've had any bankruptcies within the last several years. With your credit report, lenders get a "credit score" which takes all of this information and boils it down to a number between 300 and 900. The higher the number, the less of a credit risk you are seen to be, and this is how lenders decide which types of loans you will be eligible for. As with all new things, there is controversy over credit scores.

To be eligible for some types of loans, you require a minimum credit score without any exceptions. And credit scores fluctuate over time. In fact, the mere act of applying for credit can lower your credit score.


 
How To Make Sure You Have The Highest Credit Score Possible

 

To maximize your credit score, you should avoid applying for any new credit cards or consumer loans. Don't go to the discount store and take them up on the "No interest, no payments for one year" offer -- and avoid financing a car! After you buy your home and get your mortgage you can do all of these things, but before then it's a bad idea.

Buying things on credit hurts your credit score, and leaves less money for your down payment. Lenders also look at this figure to decide how much money they will lend you, and how much interest they will charge you on the loan. That's why it's best to wait until after you've bought your home to go shopping for furniture and appliances. There is also another reason to wait.

Once you've bought your home, you can get a loan for up to 100% of your home's value to buy anything you want. If you learn to play by the rules of the lenders' game, you can get the best credit score possible, which improves the odds that you can get the home of your dreams.

HOW TO SAVE THOUSANDS OF DOLLARS IN INTEREST AND PAY YOUR MORTGAGE OFF FASTER

 

1. Round Your Monthly Payment Up

The result of this simple strategy can save you a fortune and drastically reduce the length of your mortgage. 
As an example, if your monthly mortgage payments were $734 dollars a month, but you rounded it up to $800 per month, you would save more than $48,000 in interest payments, and reduce the length of your mortgage by 7.5 years!


2. Make One Time Pre-Payments Using 

This is an easy way to save money and shorten your mortgage. For example, if you have a $100,000 mortgage, and you have a $1000 tax refund this year, you take it and apply that refund to your mortgage. Over time, this will save you more than $8600 and shave 1 year and 1 month off your mortgage! That's another amazing result from a simple strategy.


3. Choose A 15 Year Mortgage

If you can afford it, you are far better off getting a 15 year mortgage instead of 30. It won't cost you much more, and the interest savings are truly incredible.
If you have a mortgage of $100,000 at 8% interest over 15 years, your monthly payment would be about $200 more, but you'd end up saving $92,083 in interest over the life of your mortgage!
Using these strategies is the easiest way to reduce your interest expenses and shorten your mortgage period.

Be on the look out for these 6 warning signs that can mean expensive repairs!

1. Roof

Leaks are the most common problem with roofs, and are tough to detect from outside. However, from inside an attic, you can often see water marks where there is a leak. 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.


2. Plumbing System

Make sure you are confident that both water systems work: One should bring fresh water in and the other should take sewage out, and are functioning well before signing the dotted line. 


3. Electrical System

Before you agree to buy you should make sure that you can run all of the appliances you want to and even power tools at the same time without having a power failure. You also want to make sure that the electrical system is safe and does not present a fire hazard.


4. Heating and Cooling Systems

Be sure to thoroughly inspect the heating and air conditioning systems in any home you are considering to purchase. 


5. Bad Paint and Signs of Rotting

The paint inside and outside the house can reveal a lot about the condition of the underlying material. Check several places on several walls, using your eyes and a screwdriver for poking.  to thoroughly inspect the heating and air conditioning systems in any home you are considering to purchase. 


6. Cracks and Other Important Signs
Cracks in walls, doors not closing properly and uneven floors can all be signs that there is a problem with the foundation. If the foundation is not strong, the entire house could literally collapse, so you should carefully check for these signs. A bad foundation may not mean imminent disaster, but it could be used to bargain for a lower sale price, or you could ask to have the owner repair it before the sale. 
1. Not knowing what they can afford before making an offer.

The best way to avoid this is to get pre-approved for a mortgage so you know exactly how much you can afford. Usually pre-approvals are free.


2. Not knowing who the agent represents.

Unless an agent is working as your buyer representative, they represent the seller. Many people don't realize this. 


3. Choosing the wrong Mortgage.

A bad mortgage can cost you thousands in taxes and interest. Consult an accountant before you choose your mortgage.


4. Not finding problems with the home before buying it.

You should always have a professional inspector look at the home before buying it, otherwise you could be looking at huge repair costs later on. 


 
5. Not understanding how their credit can impact their ability to purchase or refinance a home.
Get a mortgage professional to help you go over and prepare your credit file before you buy a home.

BUYING A HOME?

Contact Angela for a free no obligation appointment to meet and see why she may be the best choice for you!

WORK WITH ANGELA

Contact Angela for a free no obligation appointment to meet and see why she may be the best choice for you!