Categorized | Dreams & Inspiration

Guide to Buying a Home

Posted on 06 November 2009 by Liza Mae V.

I read a blog which focused on their house renovations and decided, why not write about my own experiences.  I have learned a lot from watching my partner go through this process last December but I didn’t really pay attention to the details.   Now that I bought my own house and he is not here physically, I’m finding out that it requires a lot of patience and hard work.  Let me rewind to the beginning of the process.

Due to the recession and this false perception of job security, I have come to realize I have to take matters in to my own hand.  Watching 1000’s of people being handed the pink slip at my company in one day, one being my boss, made me very weary about this whole job security perception.  These cubicle walls box us in to think that they will protect us but really they are constructed with the most poorest materials.  So I have decided to invest in property so that I do not have to rely on anyone else.

My name is Liza Mae and this is my house, my security.

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I’ll guide you on the process to purchasing a house in Toronto.

1. Get a real estate agent in the area. You do not want to hire an agent whose office is in Markham and you are looking in Brampton.  There are a few reasons why:

Availability and Convenience – Agents usually live near their office, so if you have houses you want to see, they are more than likely a few minutes away.

Product Knowledge – They know their areas and would give sound advice about price, location information like where the nearest grocery store is located.

Networking – Real estate is about networking with other agents.  Thus your agent might know the listing agent which works well during negotiations or it can work against you in a rare case.

2. Get a pre-approval. I realized that when you get your pre-approvals from the bank and/or a mortgage broker, that you should do it in the same week.  The reason is that your credit score will only be hit once versus multiple times if you get pre-approvals at different times.  You can also check your own credit score at Equifax for $25.  I did this so I know if the lenders will lend me money but I found out I was at a good score so it eased my mind a tad.  Also, it is always great to shop around.  You can leverage your interest rates and play the ‘who can give me the best rate’ game.

3. Transfer funds for your Deposit. Move your money to your chequing account so that you can make a bank draft to give to the listing agent when you make your offer.  Depending on your price point, you need to give a deposit less than 24 hours after you make your offer.  I offered a $5,000 deposit but my partner had a $10,000 deposit.  Usually if you are buying in the City of Toronto, $10,000 is a safe bet.  The deposit should always be less than your down payment.

4. Make an Offer. After searching for the house you would like to purchase, you have to make an offer.  Your agent will send you a list of comparable houses that have sold around that area.  See if it worth it in that area.  This is when you sign your first of many papers.  If it is approved by the buyer than you almost have your house.

5. Meeting your Conditions. You have to meet your conditions within a few days of signing which includes but is not limited to:

Deposit Cheque. This is part of your down payment.

Financing. If you put down less than 20% as I did, you will need to get mortgage insurance from either CMCH or Genworth.  This is basically insurance for the bank, so if you don’t pay your mortgage, CMHC will cover it.  You only need 5% down payment.  What I learned with getting mortgage insurance is that if the listing says that it is a fixer upper, be prepared for the insurance company to get an appraisal of the house.  They want to make sure that you are paying for what the house is worth.  They can decline you to say that you are overpaying for the house, in which case you can pay the 20% and still get the house or find another house. 

Home Inspection. I’ve been watching the new show ‘Holmes Inpection‘ and it was important to get an experienced home inspector.  You should do research on the person and give them an interview just so you know for sure they are going to give you the most accurate and detailed inspection.  Some questions are ‘How long have you been doing this?’, ‘What is your background?’ (Builders or Engineers make a safe bet), ‘How many homes have you inspected?’, etc.  After your inspection you can decide to walk away or close the deal.

6. Sign your Name on the Dotted Lines. Now you sign the condition waiver form and accept that all the conditions are met and you will continue with the deal.

7. Find a Lawyer. You need your lawyer to deal with all the legal stuff which includes title insurance search, transferring funds, and all the boring stuff which I didn’t really care to know.  They explain everything on closing day.

8. Choose your Mortgage Plan. Take the best plan that works for you, I choose a variable mortgage because the rates are really low.  Also, I choose to do a bi-weekly rapid payment on the mortgage to pay off my mortgage much faster.

9. Sign up for Home Insurance. You need this for closing date and it protects you when something bad happens to your house or yourself.  For example fire, flood, death, etc.  I went with the Cooperators Once again I recommend to shop around.

10. Sign up for Life Insurance. This is to protect your family if you die.  It will cover the cost of the house and more.

After all this, you have a house.  If I missed anything, please let me know.  This was the process I had to go through but you may have other steps which I did not have to do.

– Liza Mae

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About Liza Mae

I am a twenty-somethings female photographer in search of love, the meaning of life, and adventure. I am passionate about anything photography from the snap to the click.

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