Buying a house is a stressful undertaking no matter who you are or where you live. However, numerous studies of homeowners and prospective homeowners in Canada have found that buying a house in Toronto could be even more stressful than buying anywhere else in the country. First-time home buyers often feel overwhelmed, like they are in over their heads, when presented with all of the relevant information.
There’s no avoiding some stress when you embark on a journey toward home ownership for the first time. But when you have some working knowledge of what you’re getting into ahead of time, there are less surprises. To take some of the burden off of your mind, read on to see what essential information that you need to know before moving forward.
What Do You Need?
The first thing that you need to decide is what you need in a new home. You should weigh out the things that you feel are necessary in regard to your new house, versus what is merely a “want.” You also need to consider what is absolutely not going to be acceptable. Things to consider are:
- The number of bedrooms
- Square footage
- Assorted amenities, like appliances and central air
- Location relative to shopping, schools and work
How Much Are You Willing and Able to Pay?
When you buy is of great importance in buying a home. The real estate market is known to fluctuate from month to month, or even week to week. So it is essential to know what the trends are in Toronto. When you know this, you can make your purchase at the right time where you are more likely to find better prices and more options.
Toronto-based real estate experts often regard Fall and Springtime as the peak times in terms of selection. More homes tend to enter onto the market during these two seasons, which can drive down asking prices. However, the summer tends to see home sellers trying to part with their homes quickly. This can also save you some substantial funds.
Prospective home buyers should also look into what other houses in the neighborhood are going for.
Understanding Mortgage Conditions
Obtaining the financing that’s needed to own a home can be the most daunting part of becoming a homeowner. You’re about to be dealing with a lot of money here, and it’s important to know exactly what all of that entails. A real estate agent can help with this, but here are the basics of what you need to know:
While the lender might approve your request for a mortgage, they can insist upon other conditions being met before granting final approval. Most notably, they can (and likely will) have their own appraiser estimate a value of the home before approving a new mortgage. The value of the house must be equal to or greater than the amount requested by the buyer.
In some cases you may need to seek additional financing via a second mortgage from Toronto based private lenders.
Can You Tough it Out in a Bidding War?
When a property has multiple potential buyers wanting to buy it, a bidding war can occur. If you find yourself in such a situation, there are some strategies that you can employ to your benefit:
- Realize that no matter what you or anyone else offers, the seller has ultimate control over who the property goes to.
- The asking price matters a lot less than the highest price being offered in the bidding war.
- Know when to “tap out.” Determination is admirable, but not when you end up in a troubled financial situation.
- Offer what you’re willing to pay the first time. There are often no chances to negotiate terms later on.
- Attach no conditions to your purchase, or as few as possible, to make it more desirable to sell to you versus the competition.
- Have your deposit ready.
Are There Nearby Alternatives?
Living inside of a major city like Toronto can be expensive, more expensive than many people are able or willing to pay. You can save some serious money on your home investment if you look toward outlying areas instead. Before you decide whether or not this is the right move for you to make, research the markets in areas such as:
- Owen Sound
These nearby areas are known to be less expensive to buy a house in than Toronto, but are close enough by that you can still take advantage of the amenities that the city has to offer.