Jayashree
REALTOR®, Team Leader & Coach
Toronto Trusted Real Estate Advisor
REALTOR®, Team Leader & Coach
Toronto Trusted Real Estate Advisor
Purchasing a home, especially your first, can be intimidating. Where do you even begin, after all? What steps are involved in buying a home, how do you submit offers, and what should you anticipate throughout the closing process? Should you select an agent first or get pre-approved first? Oh my God, this is overwhelming.
Therefore, we have created a thorough house purchase procedure specifically for you that covers the 6 steps included in the home buying process. Enjoy!
This step in the home-buying process is important, so we advise that you do it first before doing anything else. It always surprises us to meet purchasers who have spent several hours browsing homes online and attending open houses without actually having a pre-approval in place from a lender.
What if you’ve been looking at houses that are more expensive than you thought you’d be pre-approved for? Or, worse yet, exceed your budget? We’re not saying that completing research before beginning your search isn’t beneficial; it is. However, when you’re ready to move forward, speak to your bank and a mortgage broker (we recommend doing both) and obtain a pre-approval to avoid any surprises later on.
TYPES OF MORTGAGES
There are various mortgage types, and as they may be unclear to someone unfamiliar with the home-buying process, we’ve done our best to describe them below:
HIGH RATIO MORTGAGE AS COMPARED TO CONVENTIONAL MORTGAGE
The size of your down payment, with 20% serving as something of a magic figure that defines which type of mortgage you’ll wind up with, will ultimately determine whether you get a conventional mortgage or a high ratio mortgage.
Conventional Mortgage: To qualify for a conventional mortgage, you must contribute 20% or more of the home’s worth or purchase price. Mortgage protection insurance is not required for this kind of mortgage. The lender will loan you up to 80% of the lower amount, which can be either your purchase price or the home’s appraised value.
High Ratio Mortgage – For most purchasers, saving for the down payment is the most difficult step in the house purchasing process. You can make a down payment as low as 5% with mortgage loan insurance. High ratio mortgage loan insurance has a premium associated with it. The premium can be paid in one lump sum or added to your mortgage and is calculated as a percentage of the principal.
OPEN AND CLOSED
Closed Mortgage: Closed term mortgages are often a better option if you don’t intend to pay off your mortgage quickly. The advantage of closed mortgages is that they often have lower interest rates than open mortgages, saving you money on interest and allowing you to pay off your mortgage more quickly. Cons include paying a pre-payment fee if you want to change your interest rate, pay off your mortgage’s remaining balance before it expires, or prepay more than your mortgage permits.
Open Mortgages – If you anticipate paying off your mortgage soon, you may find open term mortgages intriguing. They have no prepayment penalties and can be paid back in full or in part at any time. Open mortgages can be changed to any other term at any moment without incurring a penalty for early repayment. Due to the increased pre-payment flexibility, interest rates for open mortgages are often higher than those for closed mortgages.
Fixed-rate versus variable-rate mortgages:
The choice between a fixed rate and variable rate mortgage will be one of your first choices once you begin looking for a mortgage. Make an informed decision because it will significantly affect the amount of your monthly mortgage payments. Fixed and variable interest rates are the two main categories.
The disadvantage is that if interest rates decline during the life of your mortgage, you can end up paying hundreds, or even thousands, more than if you had chosen a variable rate mortgage. Additionally, the only method to modify this kind of mortgage is to refinance your home, which can be expensive.
Mortgages with Variable Interest Rates – The main benefit of these mortgages is that, because your ratio of interest to principal fluctuates along with the bank’s prime rate, you’ll pay off your mortgage more quickly if you lock in at a higher rate and rates fall. In contrast, if interest rates increase, more of your monthly mortgage payment will go toward interest and less toward principal.
With access to over 80 different lenders, premium rates, and the capacity to expedite applications and evaluations, we have our very own dedicated in-house mortgage experts. How does that affect you? decreased stress levels, total control and client’s best interest mortgage guidance.
You won’t ever need to be concerned that a financing constraint would prevent your property from appraising before the closing date or prevent you from competing in Toronto’s competitive market. *We also have connections with the most knowledgeable staff members at the major banks. If they are on our list, you may be sure to receive 5-Star guidance and assistance, including:
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Finding an agent is the next step once you have your certified pre-approval certificate in hand. You want to make sure that the agent you choose has the skills and resources to give you the greatest experience possible during the home-buying process, not just any agent. since you merit it.
One excellent approach to identify candidates for the job is through recommendations from friends and family, but unless someone absolutely blows you away to the point where you know no one else could possibly do a better job, we advise interviewing at least two agents before making a final choice.
Why the interview process?
Because someone has a real estate licence or has worked in the industry for some time doesn’t necessarily mean they are knowledgeable in the field.
Before hiring someone, be careful to do a thorough buyer consultation, such as a needs analysis. It won’t do to give only a handful of your details over the phone.
Following are some inquiries to make during your consultation:
Additionally, you want to confirm that whoever you choose has a satisfaction guarantee that entitles you to revoke your contract of representation with them if they fall short of their service commitments. And they ought to document that.
With every single one of our prospective clients, we ALWAYS do a complete needs analysis. Why? Because if we simply ask you 10 questions, we might end up showing you 100 properties—most of which won’t meet the bill—instead of 10 carefully verified homes that you’ll love.
How hard do you think an agent will work for you if they aren’t ready to invest this time in you up front?
Saving you time, stress, and money is our top goal on our team. Due to this, we provide all of our clients with:
Before visiting too many properties in person, we always advise that you have a list of your “Must Haves” and “Would Likes.” This not only gives us a wonderful beginning point for focusing on the best houses for you, but it will also help clarify for you the attributes your future home must have, which should simplify your search.
How many bedrooms and bathrooms do I need? Do I require a dedicated parking space? Is an open concept necessary? How far from my place of employment can my new home be located? Do I need nearby parks, services, or transportation? Am I alright with doing renovations?
Remember that we prefer to inspect homes in person rather than rejecting them electronically. If the listing agent did a bad job of marketing the house (anyone have any images taken with a cell phone?) Don’t ignore it and move on since it might be your forever home. Keep an open mind; in fact, we’ve had a lot of customers over the years buy the house they passed on online.
Realtor.ca is a terrific site to start looking into neighbourhoods and properties in general, but bear in mind these two very important points:
Many of the homes advertised on the website are already sold because it is 24-48 hours behind real time (particularly in a seller’s market where the best properties can be gone on Day One).
You may be in for a harsh awakening because it is only providing you the list price, which may be much different from the price that the house really sells for.
Our superior house search tool notifies you IN REAL TIME the moment a listing is added to the MLS database. This kind of time advantage could mean the difference between acquiring your dream home and not even being able to visit the property before it sells in a fast-moving seller’s market.
Are you exhausted of manually sifting through new listings since many might not be a good fit? Use our Thoughtfully-Picked Properties option after that. We will constantly search available ads and deliver you just the ones we are certain you will enjoy.
When you locate a home that you adore, you will prepare an offer. Undoubtedly, this could be a stressful aspect of the home-buying process. Unsure about what to anticipate? We’ll explain everything you need to know to you in simple terms so that you won’t be caught off guard when it’s time to submit your offer.
The negotiations begin when your offer has been accepted. Sellers often demand the highest price, the fewest restrictions, a sizable down payment, and a closing date that suits them.
Your agent’s bargaining skills and strength will determine whether you compromise, or emerge from the negotiation process with as many of your requirements and goals satisfied as is practical.
Here are some of the key terms from an agreement of purchase and sale:
The offer must provide a number of particular days and times in order to be accepted. Your original offer is only good for a predetermined amount of time after which it becomes void and unenforceable. The irreversible period is the name given to this time span.
This is also known as the closing date and is the day agreed upon for the transfer of ownership of the property between you and the Seller.
Every property in a home buying process needs a deposit, which is typically around 5% of the purchase price, and which must be submitted within 24 hours of an accepted offer or brought up during negotiations if there are multiple offers (don’t worry, you get your deposit back if you don’t get the property). We advise keeping these monies accessible by keeping them in a liquid account, such as a bank account or line of credit.
Any object that is firmly fixed to the property is a fixture. A fixture would include, for instance, a bathtub, sink, or toilet that is permanently plumbed in. Technically, everything that is screwed in is a chattel rather than a fixture because screws may be removed. Because this is an often contested topic, be aware of the difference and, if in doubt, include it in the offer.
Contrary to fixtures, chattels are not a component of the property and must be mentioned in the offer if you want them to be sold along with the property. If the property has them, you should list goods like ceiling fans, chandeliers and other light fixtures, drapes, microwaves, refrigerators, freezers, stoves, washers, and dryers, as well as storage sheds, BBQs, central vacuums, and equipment, in your offer.
During this time, your attorney must ascertain whether the property’s title is clear of any issues.
We take the house purchase process’ negotiation stage very seriously and will fight for our clients. Each and every time. Never, ever will we force you to do anything you don’t want to. Is the price being demanded unreasonable? Are the conditions too strict? We’ve got your back, and we’ll always give you the straight dope.
The choice of your attorney is just as crucial as your mortgage agent or specialist. Once you have an accepted Agreement of Purchase and Sale, you will normally select a lawyer. If your purchase is not a conventional one we’d recommend finding one before submitting your offer.
How lawyer professionals help you ?
We are glad to introduce you to some of the top real estate attorneys in the field. They treat our clients like gold, have a keen eye for detail, and have years of experience. How does that affect you? Knowing you’re dealing with the best, so you can relax knowing that. To spare you a trip to their office, we’ve even arranged for them to courier your keys to you on closing.
The last thing you want is to find your ideal house only to discover that there are unforeseen closing charges because you didn’t get the best advice or complete your research.
The following is a list of closing expenses you can anticipate when purchasing a home:
Usually included in your lawyer’s fees, title insurance protects you from the costs of fixing the majority of issues with the title to your property in the future.
Your attorney’s responsibility is to certify that you have clear title to the property that is free of liens, judgments, and other encumbrances. A lawyer will normally charge between $1,400 and $1,800 in fees.
For the majority of residential homes, a home inspection is highly advised, and this recommendation will typically be a condition of the offer. We can help you select a home inspector. The price will vary based on the property’s worth, age, and use, but it often falls between $350 and $500.
If you are purchasing in an area where termites are known to be an issue, you might want to employ both a termite inspection and a home inspector. This could raise the price of your inspection by another $200 to $300.
In addition to the provincial land transfer tax, properties purchased in the Metro Toronto Area will also be subject to a municipal land transfer tax. Potential tax rebates are available to first-time buyers.
Lenders often require mortgage loan insurance when homebuyers put less than 20% of the purchase price down. It enables consumers to buy homes with a minimum down payment of 5% and interest rates that are comparable to those with a 20% down payment, while also assisting lenders in preventing mortgage default. Regarding this cost, consult your lender.
In order to confirm that the price you are paying fits within the approved range of value for that type of property and that location of the city, the lender may request to see an appraisal of the property when you apply for a mortgage. Typically, this costs between $250 and $350. If you want to know if you have to pay this fee, talk to your lender.
Depending on whether or not the seller has paid certain items in advance, such as property tax, hot water tank rental, etc., amounts are added to or removed from the total to be paid to the seller in the statement of adjustments.
Approximately 1.5% to 2.5% of the purchase price.
Between the time your Agreement of Purchase and Sale firms up and your closing date, there is a lot to do. All of our clients receive a thorough closing checklist as a result so they can keep track of everything. To make your move even simpler, we also provide killer move management services recommendations.
We were first time buyers and quite overwhelmed with the process at the beginning. Fortunately, My friend recommended and we got to work with Jayashree as our advisor, who helped us navigate the process and made sure we understand everything each step of the way. She’s knowledgeable, responsive, and always on the reach. Thanks to her expertise and negotiation skills, we were able to find the perfect home we loved.
Jayashree was a pleasure to work with! This was my first time getting my own condo in Toronto and it was pretty overwhelming. Thankfully ,She made the process smooth and fun! I am happy my financing was also taken care I felt like so much was offloaded and the entire process felt good. I highly recommend her!
Jayashree did a great job selling our home in Oshawa. We strongly recommend her services and would certainly use her again when we sell our next home. She took her time with us, was always quick and responsive throughout the whole selling process, and never insisted on selling our home for less than we were comfortable with, like some other agents we had in the past. Thank you Jayashree, you are the best!
Jayashree was an excellent real estate professional. We called her with a very short timeline to rent out our condo unit. As an incredibly reliable agent, she found us a great tenant despite the time crunch. We greatly appreciated that she is a landlord herself and also has real estate investing experience. She added a lot of value providing her advice throughout the process. She also gave us the option to be included in the tenant interview – which we felt was extremely helpful in assessing the quality of the tenant. We also really appreciated how responsive and proactive she was, which alleviated a lot of stress for us. We loved working with Jayashree and look forward to working with her again.
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