It’s likely one of the biggest moves you’ll make in life.
But buying your first home isn’t all fun and games, and you shouldn’t want it to be. When you’re throwing around words like ‘down payment’ and ‘bidding war,’ it’s no surprise that you should be taking buying a house seriously.
According to a survey by the Real Estate Council of Ontario (RECO), 70 per cent of young people (ages 18-34) are anxious about not being properly informed about the buying or selling process. That’s why we teamed up with RECO to make sure you’re in the perfect place before you buy.
Here are 14 things you should know before you buy a house in Ontario.
Real Estate Contracts Are Not Standardized
Just as every home is unique, so are the contracts to buy and sell them. Buying or selling your home involves a lot of paperwork and the devil really is in the details. If you’re the least bit unsure or uncomfortable, ask your real estate professional to explain. If it’s still not clear, consider speaking with a lawyer.
In a Bidding War, Sellers Can Ultimately Go With Any Offer They Want
While 68 per cent of young people are concerned about being outbid on the home they would like to buy, remember that in the end it’s up to the seller to choose who they want to have their house. Sure, more money helps, but other factors could be more important to them, such as the size of the deposit, the closing date, and other conditions attached to an offer.
Get a Home Inspection. Always.
Your dream home can easily turn into a nightmare…or a nightmare you managed to avoid. The choice is up to you. A qualified and experienced home inspector will examine the major systems in the home, including electrical, roofing, plumbing, heating/air conditioning, and foundation.
Your Contract is Not Between You and Your Salesperson
When you sign a representation agreement to buy or sell, it’s a contract between you and the brokerage where your real estate professional works, not with the individual real estate professional.
Real Estate Commissions And Fees May Vary
Fees vary depending on the brokerage and the services they provide. In most cases, the seller pays the real estate commissions to both the buyer’s and the seller’s brokerages. To find out more about commissions you can click here.
There are Rules and Regulations in Place to Protect You
RECO regulates real estate professionals in Ontario. So, as long as you make sure you use a registered real estate professional in this province, you’ll be covered by RECO’s three pillars of protection. Find out more about how you are protected right here.
Know What You Can Afford
Falling head over heels for a home with a “whatever it takes” mentality can get you into a lot of financial trouble if you aren’t careful. It is important to have a realistic budget based on your financial situation, and to be ready to walk away when your limit is surpassed.
There Are a LOT of Costs Involved in Buying a Home
Pre-closing costs, closing costs, after-closing costs…it’s no wonder that 84 per cent of young people worry that they won’t be able to afford the home they would like to buy. To avoid this unexpected chunk out of your budget, get a good understanding of the full cost of buying a property before you start the process. To find out all about everything from appraisals to land transfer taxes, click here.
Who You’ll Need
You’re going to meet a lot of professionals along the way; a mortgage professional to get you the best rate and terms, a lawyer who specializes in real estate, a qualified and experienced home inspector, and a registered real estate professional, just to name a few. You can find more info on how to select the right professionals here.
Don’t Just Hire the First Real Estate Professional You Meet
Shop around and make sure you feel comfortable with whomever you choose and their approach to the process. Also, be sure to get references and contact them to learn about their experience with that real estate professional. For more information you can use the ‘real estate professional search’ tool on RECO’s website to check the status of their registration and see whether they have been subject to disciplinary action.
Don’t Forget About What’s Inside the Walls
Sure, the hardwood floors, stained glass windows, and walk-in closet are all great, but the insulation, wiring, and plumbing could be from the 1920s. And no, that’s not a good thing.
Don’t Forget About What’s Outside the Walls
This is going to be your new ‘hood,’ so make sure it has everything you’re looking for.
Visit the neighbourhood at different times of the day to see if the surroundings fit your lifestyle. Is it too noisy, or not vibrant enough? The only way to find out is to spend some time exploring the area, talking to neighbours, and researching the locations of amenities like grocery stores, schools, banks, and anything else you might want nearby.
It’s Going to Be Emotional
From falling in love with a property to putting down all your hard earned money, buying a house is a roller coaster of emotion. You’re going to laugh, you’re definitely going to cry, and in the end you’ll hopefully be very, very happy. But this will only happen if you don’t allow your emotions to overrun your common sense.
Be smart. Get informed about the buying and selling process before you start looking for that first dream home. A good resource is RECO’s guide to first-time home buying at http://www.reco.on.ca/firsttimebuyer. You’ll find everything you need from choosing the right real estate professional to common buying mistakes to avoid, tips for navigating real estate paperwork and more.