Royal Lepage Real Estate Services Ltd., Brokerage
905 King St. W, Toronto
office 416.205.0355
USEFUL INFORMATION DURING THE BUYING PROCESS
Understand Market Conditions
The real estate market is always changing. It helps to understand how market conditions can affect your position as a buyer.
Determine What You Can Afford
Purchasing a condominium involves one-time costs and monthly expenses. The largest one-time cost is the down payment. It usually represents between 5 – 25% of the total price of the property. In addition to the actual purchase price, there are a number of other expenses that you might be expected to pay for.
MAXIMUM MORTGAGE CALCULATOR
Obtain a Pre-Approved Mortgage
Having a pre-approved mortgage will give you the confidence of knowing exactly what you can spend on a property before you start looking. You will also be protected against interest rate increases while you look for your new home. Your Mortgage Specialist will answer your questions and help you determine which financing terms and options are right for you. I, along as your Mortgage Specialist, work as a team to help you find the right home and select the best financing.
Finalizing Your Mortgage
Once you’ve found the property you want to purchase, there are some documents you’ll probably be asked for in order to finalize your financing. They will include:
1 A copy of the real estate listing of the property. If the property is still to be built, the mortgage lender will need to see the
architect’s or builder’s plans and details on lot size and location.
2 A copy of the offer to purchase or the building contract, if this document has been prepared.
3 Documents to confirm employment, income and source of pre-approval. If you have a Pre-Approved Mortgage, it’s a simple matter
of finalizing a few details, which your Mortgage Specialist will explain to you.
Provincial Land Transfer tax payable on purchased property anywhere in Ontario.
(Payable to the Government of Ontario)
Toronto Land Transfer tax is payable when you purchase property within the City of Toronto.
(Payable to the City of Toronto)
If purchasing a property within Ontario the property will be subject to the Provincial Land Transfer Tax. If the property is located within the City of Toronto, the purchase will be subject to BOTH Provincial and Toronto Land Transfer Tax.
First-time home buyers where the total Toronto land transfer tax is $3,725 or less ($3,725 is the amount of TLTT payable on a home purchased for $400,000). First-time home buyers with Toronto land transfer tax payable above the maximum rebate amount of $3,725 (those purchasing homes above $400,000) will be required to pay the total Toronto land transfer tax, and then receive the maximum rebate of $3,725 at a later date from the City. Once all changes have been made to Teranet’s collection system, in the spring of 2008, these buyers will only have to pay the balance of the Toronto land transfer tax above $3,725.
The Major Elements of an Offer
Price
Depending on local market conditions, the price you offer may be different from the seller’s asking price.
Deposit
The deposit shows your good faith and will be applied against the purchase of the property when the sale closes. I can advise you on an appropriate amount.
Terms
Includes the total price offered and the financing details.
Conditions
These might include “subject to status certificate”, “subject to buyer obtaining financing” or “subject to buyer selling their property”.
Inclusions and Exclusions
These might include appliances and certain fixtures or decorative items, such as window coverings or mirrors.
Closing or Possession Date
Generally, the day the title of the property is legally transferred and the transaction of funds finalized unless otherwise stated
How to Make an Offer
When it comes time to make an offer, as your Representative, I can provide current market information and will assist you in drafting your offer. I will communicate your offer, referred to as an “Agreement of Purchase and Sale”, to the seller and/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. I will guide you through this process. *Agreement of Purchase and Sale”: a legal document which specifies the terms and conditions of your offer to purchase the property. The offer can be Firm or Conditional.
Firm Offer To Purchase
Usually preferable to the seller, because it means that you are prepared to purchase the property without any conditions. If the offer is accepted, the property is yours.
Conditional Offer To Purchase
Means that you have placed one or more conditions on the purchase, such as “subject to financing”, or “subject to sale of buyer’s existing home”. The property is not sold until all the conditions have been met.
Acceptance of the 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.
Hire a Legal Professional
A legal professional is there to represent your interests and to provide the legal documentation required. I can provide you with the name of legal professionals who specialize in real estate.
Have the Property Inspected (optional)
Having the property inspected by a qualified home inspector will give you the added confidence that you’ve made the right decision (costs vary). When the procedure is complete, you may wish to ask for a full written report plus estimated costs for any necessary repairs.
Mortgage Term:
The term of a mortgage is the length of time before it comes due for renewal. **Mortgage Term must be greater than the amortization period you select.**
Payment Frequency:
Select how often you would like to make your mortgage payments. Number of payments per year:
Monthly: 12 (once a month).
Semi-Monthly: 24 (twice a month).
Bi-Weekly: 26 (once every two weeks).
Weekly: 52 (once a week).
Amortization Period:
Enter a number representing over how many years you would like to repay your mortgage. The standard is 25 years. Minimum: 1 Year / Maximum: 40 Years
Mortgage Amount:
Enter the amount of money you want to borrow. You can calculate the maximum mortgage amount you qualify for (based on income and debt) by using the Maximum Mortgage calculator, located on my "Mortgage Tips" page. Minimum: $10,000 / Maximum: $1,000,000
Interest Rate:
Enter the interest rate you would like to use for calculating your payment. Minimum: 2.0 / Maximum: 25.0
Typical One-Time Expenses
-
•Mortgage Application and Appraisal Fee at time of application
-
•Property Inspection (optional) at inspection
-
•Legal Fees at closing
-
•Legal Disbursements at closing
-
•Property Survey or Title Insurance at closing - A Survey of the property is usually required by the lender, (sometimes provided by the seller). If not available, a survey can cost between $600-$900. In lieu of the Survey, most lenders today will accept Title Insurance (approximately $250).
-
•Land Transfer, Deed Tax or Property Purchase Tax at closing (First-Time Buyers should Refer to my Real Estate News Page for more information.)
-
•Adjustments for Fuel, Taxes, etc. at closing - 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.
-
•Mortgage Insurance (and Application Fee if applicable) at closing
-
•Home and Property Insurance at closing and ongoing
-
•Moving Expenses at date of move
-
•Typical monthly costs incurred with home ownership are mortgage payments, maintenance, insurance, condo fees, property taxes and utilities. See the “What You Can Afford” to help you estimate the approximate purchase price of a home you can afford.
-
•GST - GST is payable on the purchase of a newly constructed home. The purchase price (on the Offer) will say "Plus GST" or "GST Included", and who gets the GST 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).
All information displayed on this site is believed to be accurate but is not guaranteed and should be independently verified. No warranties or representations are made of any kind.