Gearing up to purchase your first house? You’re not the only one!
Real estate is booming across the country – which can be typified by Toronto housing market sales figures for the past month. The number of homes purchased set an all-time high for the month of June, with over 12,000 settlements.
The Canadian real estate search puts it all down to a strong economy, a cracking job market with low unemployment and increased earnings, and very low mortgage rates.
Now, there’s nothing wrong with a lot of sales going through! However, what they also report is that MLS listing for available homes is down, again. In conclusion, we’ve got here is more people wanting to buy a home and fewer homes available to purchase! This has the potential to create a real headache for people looking to buy.
There’s also the fact that detached single family homes are becoming all but unaffordable for most. With Toronto condo prices within reach, families are pushed towards apartment living instead, or bigger properties at the city’s edges.
The important question is: how can you get ahead when purchasing a home? Whether it’s a condo, a townhouse, a cottage, or a duplex, it all starts with your first step – which should be a leisurely browsing through what’s available.
Start your Toronto real estate hunt with an MLS listing search
An MLS listing is a search that allows you to browse through properties across multiple real estate agents and brokerages. With start of availability of new sites with more comprehensive information like Homula.com, now consumers not only have access to MLS listings but they can also browse through coming soon, exclusive and new construction properties.
Think about it – Do you want to browse everything on the market or just what one company has on offer? We thought so!
By using a listing service that rolls in every property you can:
- Have an initial browse to see what is available and where
- Get an idea of the sort of prices that you can expect to see
Once ready to see any of the properties that fits your requirement, you are able to book the showing right from comfort of your screen. This is the future of real estate.
Do the math
It’s not about how much your dream home costs, it’s about seeing what you can afford – and starting from there.
You’ll need to tally up what you’re making and what you’re spending at the moment. This will give you a good idea of how much you can put towards your mortgage repayments.
Track your finances before you buy your home! This is essential to really understand your spending habits. Track your income and spend for a month with Homula tools. This way, you’ll be able to see a great overview of your spending habits. Know what mortgage repayments you can afford straight up, and what could be possible with some tricky budgeting.
If you have big amounts on your credit cards or loans, it is advisable to pay these off first.
How much you have available after expenses, utilities, holidays, etc. will be your baseline of what you can afford each month. You might choose to put a higher cap on it – if you can work out a budget to reduce spend in other areas.
There’s also the option of generating extra income with your new home by Airbnbing it – this is 2016, after all! A study released this week shows that the average Airbnb host in Vancouver makes a tidy $6,500 annually on their listing.
This is a good way to add to your mortgage repayments if:
- You’re out of town often
- Stay with friends or family a lot
- Have a spare room that’ll eventually be for children
Get pre-approved for a mortgage
Now you’ve done the math it’s time to head to the bank or lending agency to consult with a mortgage professional.
Book in an appointment and bring along with you:
- Pay stubs from your employer
- Details of all your banking accounts, loans, and credit cards
- Information on current assets
You will be pre-approved for the maximum amount that the lender believes that you are capable of covering.
A better option to contact a mortgage broker that has access to most lenders and can find the product that fits your need at lowest possible rate. You can use Homula Professional Finder to find a local expert mortgage broker.
Create your ideal home checklist
This is the fun part! Coming up with a checklist for your dream home is a great chance for your imagination to run free. Here’s a start for important features you will need to think about.
- Type of home (standalone house, condo, duplex, etc.)
- Number and size of bedrooms
- Number and size of bathrooms
- Study room
- Living areas
- Construction material (brick, concrete, etc.)
- Home style
- Age of home
- Ideal suburb and other suburbs you would consider
- Yard size
- Inbuilt appliances
- Kitchen space
- Heating and cooling
- Front fence
- Car space
- Yard features such as entertaining space, swimming pool, etc.
- Distance to shops, schools, public transport, etc.
Of course, for most people, you aren’t going to be able to nail every requirement on your list!
You might need to compromise – perhaps you don’t really need a patio after all – or plan to make renovations to a property later on. If you really wanted to live in Richmond Hill, but can’t afford it since the Richmond Hill housing price increase has made it unaffordable, then you might have to choose a suburb or two over.
There’s always the option to build, or buy off the plan. For instance, Milton or Mississauga new house developments are a popular choice for first time home buyers.
A more in depth search
Armed with your budget and your checklist, it’s time to start your in depth search. Check out our MLS listing and plug in all your required details to see what’s available. You can add the properties that you like to your favorite page or you can do a side by side comparison on Homula.com website.
If you find suitable properties, you can see if they’re within your budget by using our mortgage calculator. Homula.com tool section includes tools such as the land transfer tax calculator, loan repayment period, choice of interest rates, down payment amount, interest rate risk, and monthly expenses like your property tax.
You might not find what you want straight away but keeping your eye on what’s out there on a weekly basis is likely to pay off. The alternative is getting a real estate agent who can do the hunting for you! They really are the experts in surveying the market. Use Homula.com professional finder to find the top local real estate professionals.
When you get to viewing homes, make sure that if you find your ideal place not to show it in front of the listing agent showing you around! If they realise you’re super keen then they know that you’ll probably accept a higher price.
Putting in an offer
Think you’re ready to put in an offer? Congratulations! It’s time to tell the real estate agent. Give them a call and follow it up with an email. Generally, a first offer will come in at around 5-10% below the asking price. You might like to try lower if the property has been on the market for a long time or you can do a quick sale.
Keep in mind:
As mentioned, Canadian property is in hot demand at the moment, and there’s a lack of available places out there to buy. This means that you might be up against multiple other bidders when you’re putting in an offer for a house. Putting in an offer that is too low may let your dream house slip through your fingers. In some seller markets, if there are more than one offer, you might actually start at higher than asking price.
What you need to do is determine
- if the house is accurately priced for the market/how much the house should be priced for the market and
- how much the house is worth to you. This should dictate your offer price in a hot market – not the actual asking price.
This potentially might mean that you put in an offer over the asking price to land the property. Having a real estate agent playing for you can really make a difference. They’ll be able to suggest an informed offering price that will work for you. Don’t lose your dream house for couple of thousands of dollars since this will be a house that you most probably use for a long time and losing the house can cost you more than a few thousand dollars.
Have a browse around on our site for a huge amount of related resources for home buyers, or contact one of our realtors for more info!