THE ULTIMATE GUIDE
Buying a home is one of life’s most significant milestones. All at once, you can picture your future in a new space and it looks good. But buying a home can also be overwhelming and stressful, especially if you don’t have the right information or representation on your side.
I’ve created this detailed buyer’s guide to take you through the process of purchasing a home from start to finish. Whether you’re just entering the market or you’re familiar with the process, you’ll find all the answers to your most pressing buying questions in this guide.
Although this is a comprehensive resource, working with a licensed REALTOR® is still your best option. With training and relevant experience, the right agent will always look out for your best interests and help you reach the best possible deal.
Table of contents
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To sell first or buy first, that is the question
If you’ve decided to upgrade your home because it no longer serves your needs or supports the lifestyle you want, you’ve probably struggled with the decision of whether to buy a new home first or sell your current property before house hunting.
An easy solution? Ask yourself which option would be more difficult, and start there.
Each option has its own benefits and difficulties, but getting through the hardest part first will allow for a simpler real estate journey.
UNDERSTANDING YOUR OPTIONS
Choosing to sell first has definite advantages, like knowing exactly what your finances are and how much money you have to spend on a new home. However, selling first also means having the added stress of searching for a home within a time limit. You’ll want to give yourself plenty of time to make this important decision.
To make the selling process as smooth as possible, set a closing date for your current property far in advance so you have ample time to find your next home.
Choosing to buy first will give you the freedom to search for a home without a deadline, but you won’t know your true budget without first realizing the equity in your current home.
The smartest way to start your buying journey is again to opt for a longer closing period.
This time, you’ll want to apply that time frame to the home you’re buying so you can sell your current property, increase your budget, and have a better picture of your finances.
Whether you decide to buy or sell first, you’ll need to determine the most beneficial time for you to enter the market. While spring and summer months typically see the most market activity in Toronto, working with an experienced REALTOR® will help you buy or sell real estate successfully regardless of market conditions.
MAKING YOUR DECISION
Choosing to shift your lifestyle and purchase a new home is an exciting, significant decision to make that demands an incredible amount of your time and energy.
To make the most of your time during the home buying process and to reduce the stress that can come with it, trust a knowledgeable REALTOR® to help you understand important market information, provide you with sound advice, and ease your transition into your new life.
Beginning with buying
So you’ve decided to look for a new home before selling your current place. You’d rather not search for your ideal space in a time crunch. To save money and stretch your budget, you’re thinking you’d be better off entering the market on your own.
Afterall, with so much information available online you’re optimistic you’ll find the home you want by doing a little research.
But purchasing a home isn’t like shopping for anything else you might pick up at a mall or buy on Amazon. To make sure you’re protected while house hunting, you’ll want to hire a licensed REALTOR® to navigate the competitive market with an edge and protect your interests.
Before choosing a REALTOR® to work with, always do your research and choose someone with the right experience to help you make this important decision.
THE REALTOR® DIFFERENCE
When you work with a professional, it quickly becomes apparent the value they bring.
A licensed REALTOR® is going to be a member of several industry organizations that require agents adhere to a strict code of ethics. This means your REALTOR® will always work in your best interest, but it also means they have a network of real estate connections they can leverage to make your purchase a success.
In your initial meeting, you learn your REALTOR® has extensive experience helping buyers purchase homes in your desired neighbourhood. They also have an intimate knowledge of the community you want to live in and a deep understanding of the area’s market trends.
During follow up conversations you begin to understand the value a REALTOR® brings to your buying journey. They provide you with relevant recent market data and share useful industry information to help you make educated real estate decisions.
You feel peace of mind knowing you chose to work with a professional to make your most important purchase.
FINDING THE RIGHT REALTOR®
Not all REALTORS® are created equal, so it’s important for you to conduct a thorough search before making a decision. Look for an agent with the experience to match your unique situation who prioritizes your goals over closing a sale.
If you’ve been introduced to a trusted REALTOR® by a mutual connection, start your interview process there to see if it’s a good fit.
You’ll want to vett at least 5 agents to make sure you hire the right person. Starting your search by reaching out to agents who’ve sold properties in your desired neighbourhood is a good way to find potential reps.
The buying process will become that much easier if you spend the time in the beginning researching and interviewing potential agents and asking the right questions.
Choosing the right REALTOR® is one of the most significant decisions you’ll make when buying a home. Quality representation can be the difference between a smooth, successful purchase and living a real estate nightmare.
To help you decide on the right REALTOR®, keep this list of questions with you during the interview process and write down the agents’ answers.
1. What is your track record for the past two years?
2. Do you have experience helping buyers purchase a home in my preferred neighbourhood?
3. What information can you provide me about the community I want to move into?
4. Can you share testimonials from past clients?
5. What does your process look like, and what specific services do you provide?
6. Will I be working with you directly, or a member of your team?
7. How will you advocate for me during negotiations?
Compare the answers you receive from each agent. It may help to make a pros and cons list for you to decide which rep is the best fit. Then, ask yourself the following questions.
1. Is the REALTOR® attached to a respectable brokerage?
2. Is the REALTOR® familiar with the communities I am interested in?
3. Does the REALTOR® conduct themselves professionally?
4. Did the REALTOR® explain their process to my satisfaction?
5. Did the REALTOR® address all my concerns?
6. Does the REALTOR® inspire trust?
You’ll know you’ve found the right REALTOR® if the agent looks to establish a genuine connection and is thinking about your long term success. Your REALTOR® should act as your first point of contact for all your real estate questions before, during, and after the purchase of your home.
Cost to buy
- 01 HOME PRICE
- 02 THE DEPOSIT
- 03 LAND TRANSFER TAX
- 04 COMMISSION
Of course the most significant cost to you when buying your home is the price of the property itself, but there’s more to the cost than the listing price. The listing price you see doesn’t give you an accurate picture of what homes really sell for.
The selling price is what you want to focus on because that number is actually aligned with the true value of the home. Like buying, selling a home is strategic. Depending on factors including market conditions and the seller’s own goals, they may strategically list their property at a lower price.
Your REALTOR® will provide you with current home sales data that will help you better understand your position in the market and adjust your strategy. They’ll let you know if the asking price is fair and whether it’s smart for you to put in an offer or if you should walk away.
Most people are familiar with how the down payment towards your mortgage works, but not everyone understands the difference between the down payment and the buyer’s deposit.
The down payment is the amount you pay towards your mortgage and is usually 20%. A down payment of this size is seen more favourably by lenders and positions you as a serious, qualified buyer.
The buyer’s deposit is paid as an act of good faith during the offer stage and is usually 5% of the total offer amount. The deposit is held in trust and is counted towards the down payment if the offer is accepted.
Deposits must be made in cash, which means they’re payable by certified cheque, bank draft, or direct deposit. The deposit is due within 24 hours of the offer proposal, so for a smooth and quick process, be sure to have the liquid cash readily available. Financial products like mutual funds or stocks usually take longer to access, and you need the flexibility to move quickly.
LAND TRANSFER TAX
An often forgotten aspect of closing costs is the land transfer tax. Like almost anything you purchase, there’s a provincial tax levied on the home you buy. It’s a one-time fee calculated using the property value of your new home.
Remember that the land transfer tax can’t be added to your mortgage and must be paid in full once you take possession of the home. If you’re buying a home in Toronto, be prepared to pay double the cost as the city charges its own separate land transfer tax on real estate transactions.
One of the most common questions for buyers and sellers is around REALTOR® commission costs. Simply put, as a buyer you don’t pay anything. The buying agent’s commission is paid for by the seller. So that’s one less thing you have to worry about.
Being aware of potential costs when searching for your new home will help you determine a practical budget and effective strategy. Your REALTOR® will provide you with even more detailed information so that there are no surprises.
The offer process
With the help of your REALTOR®, you’ve established yourself as a qualified buyer and were able to see many potential homes in a short period of time. Over the course of the buying process you’ll likely put different offers in on a few properties.
Your REALTOR® will leverage their industry experience and expert negotiating skills to protect your interests and help you get the most value for your dollar by securing the best deal possible.
Before you put the offer on the table, there are a few things to consider.
While preparing your offer, your REALTOR® will let you know about conditional clauses that can be included in the contract. They’ll inform you that including conditions is another way to protect yourself before you make the final decision to purchase a home, as conditions must be met before the deal can close.
For example, real estate contracts often have home inspection or financing conditions included. Requiring a home inspection as a condition can limit the risk of buying a home with major issues.
Because you took the time to prepare your finances with your REALTOR® at the start of your buying journey, you’re able to present a solid offer without financing conditions. This will make your offer more attractive to the seller.
Depending on market activity, a conditional offer may not be an effective approach. In a particularly competitive market, sellers are more inclined to accept offers without conditions. However, taking this approach could be risky.
Your REALTOR® will help you weigh your options and provide expert level insight to help you decide what the best course of action is.
Also known as a “bully offer”, this type of deal is presented to the seller before they are officially accepting offers for their property. If you have a particularly strong offer, your REALTOR® may suggest this strategy.
If your offer is unconditional and for a higher price than the listing with a closing date that appeals to the seller, they’ll be more tempted to accept that deal without waiting for other offers to come in.
Depending on your unique situation and individual goals, your REALTOR® will help you understand the benefits and risks of presenting a bully offer so you can determine if this strategy is best.
WHEN TO WALK AWAY
Buying a home is a huge investment, but also an emotional journey.
Your rational brain is considering the numbers and reading the fine print, but your emotional brain is already picking out furniture and imagining your new life in a new home.
After investing your energy, valuable time, and hard-earned dollars you may start to feel a sense of urgency to pick a home and complete the buying process so you can get started with the next chapter of your life.
However, going into a deal feeling pressure can cloud your judgement and result in you purchasing the wrong home. It’s important to stay level-headed so that you don’t make a rash decision or end up with regrets. Your REALTOR® is there to be your voice of reason.
TRUSTING YOUR REALTOR®
As your dedicated real estate expert, your REALTOR® will tell you to walk away from a deal if they know it won’t benefit you. A good REALTOR® cares more about your long term success than making an easy sale.
Regardless of how much you may love a home, your REALTOR® will consistently provide honest, unbiased advice and may suggest that you walk away from a home if:
● The home is highly overpriced or it’s likely the home will sell well above its true value
● There is limited opportunity to grow wealth with the home
● There are other red flags that your REALTOR® recognizes from experience
It’s difficult to step away from a home that you felt connected to or were close to buying, but trusting your REALTOR®’s advice will ensure you save money, enter into a sound deal, and most importantly end up with the right home in the end.
Meeting your match
Your REALTOR® has helped you successfully navigate the complexities of purchasing real estate—from settling your finances to sourcing ideal listings and navigating negotiations.
Finally, the offer you presented on your dream home has been accepted! Thanks to the support of a professional real estate expert you made smarter, informed decisions and were able to purchase your ideal home and shift into your new life with ease.
About Van Caulart & Associates
Jeremy Van Caulart — your experienced Toronto REALTOR®
I left a long successful career in film and television to pursue my passion for real estate after realizing how creative, strategic, and rewarding the industry was. I knew there was nothing else I wanted to do.
When I work with you to purchase your home, my priority is making sure you’re fully informed and protected throughout the entire process. I’m committed to finding you the perfect home for the best price in the shortest amount of time to help you reach your real estate goals sooner.
I work with my team of professionals and network connections to deliver the best results when helping you buy your home. Helping homeowners acquire wealth through real estate is my mission as a REALTOR®. I’ll take the time to get to know your unique situation so I can strategically help you realize your goals.
My work doesn’t end when the deal closes. If you have questions or concerns down the line, I’m always available to help you navigate the complexities of real estate.
Doing what I love is the most rewarding experience and has earned me features in a number of publications for my trusted expertise and proven results helping homeowners.