Buying a Home in Ontario
The quest for home ownership is a hot topic in Canada, but especially in Ontario. According to the Canadian Real Estate Association (CREA) the average home price in Ontario is a whopping $884,761 (June 2024).
And with that in mind, it makes sense that many first time home buyers have been saving for years just to achieve a suitable downpayment. Not to mention the fact that a high percentage will also have received help from their family in order to make the dream of home ownership happen. So, if you’re here because you’re finally at the point where you feel ready to start your home search, congratulations! This is a very exciting but also emotional time. You’ve worked so hard to get here!
Understanding the Home Buying Process
Whenever I’ve worked with first time home buyers - or people who haven’t bought a home in a long time - there can be some sheepish grins and even apologies when they have questions. Please know that there are no dumb questions.
I’d always prefer that someone ask, rather than assume, because as a realtor, this is what helps me to make sure I’m doing a good job for my clients.
Your realtor should always meet you where your knowledge is at, never shame you for asking questions, or rush you through the process. You deserve to feel informed and confident as you go into one of the biggest transactions of your life.
Buying a Home in 10 Steps
At a high level, here are the steps, or phases of purchasing a home. Please know that this isn’t always a linear process, and sometimes you’ll repeat some of the steps. For instance, if you offer on a home and are outbid, you’re back to searching and go to showings again.
Find an Agent
Pre-Approval
Search
Showings
More Showings
Offer
Negotiation
Conditions
Firm Sale
Closing
1. Find an Agent
It’s important that as a buyer, you have your own agent.
If there is a home that you are interested in, the agent or person who has listed the house has their own set of goals, one of which is to get top dollar for the property and push for the sale.
As the buyer, if you don’t have your own agent, you risk not having someone who is advocating for your best interests.
A good agent will spend time becoming familiar with your goals, your budget, your must-haves, your dislikes, etc. They should ask questions and bring up considerations consider factors that you may not have thought about.
You should never feel pressured by a realtor. Their role is to give you advice, and then represent you with whatever you decide. For example, your realtor may recommend a fair offer price on a home judging by current market value, but ultimately, how much you end up offering is your decision.
There’s no harm in interviewing a few agents, and realtors should welcome the opportunity to go out for coffee and get to know one another. A good realtor will be just as invested in making sure that you’re a good fit to work together, as you are. After all, their reputation depends on their client’s satisfaction with their service.
2. Mortgage Pre-Approval
Most of us won’t purchase our home in cash. So, it’s always a good idea to get a mortgage pre-approval before making offers on any properties.
The pre-approval process can sometimes take longer (example: weeks instead of days), however, once you have a pre-approval in hand, they tend to last for up to six months. Therefore, it’s always a good idea to start this process earlier than you may anticipate. Getting a mortgage pre-approval will also give you confidence in the budget that you set for your home search. No one wants to feel house poor and you deserve to feel comfortable in your investment.
FAQ: Should I go to your bank or a mortgage broker for a pre-approval?
To get a pre-approval, many people will approach a mortgage broker, as they will shop around for the best rate and loan terms for your needs. However, others may prefer to stick with their bank, as loyalty can sometimes come with benefits (like better rates too!).
Another strategy that I’ve heard of, is actually doing both: Using a mortgage broker and your bank to see which gives you the better rate/terms, and then using that pre-approval as leverage to get a lower rate/better terms elsewhere. There’s obviously more legwork to this approach, but some people find that it saves them a lot of money.
If you’d like help finding a reputable mortgage broker, I’ve worked with several that my clients have enjoyed.
I’d be happy to provide recommendations - just drop me a line!
Get your FREE Home Buyers’s Guide
Interested in purchasing your first home, but unsure where to start?
Get your free step-by-step guide to becoming a homeowner.
3. Search
Searching can be amazingly fun (especially when you have an agent and a pre-approval in your pocket), but it can also get intense. Here are a few search tips to make this whole step easier.
Automate the process: Your realtor can create a custom email that will send new homes that meet your exact criteria, directly to your inbox. No more hunting though realtor.ca and you’re often some of the very first people to see these listings when they come out (advantage = you!). If you want to see how this works, email me and I can get you set up.
Go to open houses: Don’t be afraid to visit open houses at any point in your search. These are awesome opportunities to see firsthand what homes in various price points and neighbourhoods are like in person.
Visit target neighbourhoods at night too: A lot of us conduct our search during the daytime, but I always recommend taking a drive or a walk through at night to assess how safe you feel. Remember - your location is just about the only thing about your home that you can’t change. Make sure it suits you.
Ask your realtor about off-market listings: Often, we (realtors) hear about homes that are coming up on the market before they ever get onto realtor.ca. Your realtor should be keeping an eye and ear out for you no matter what, but it also never hurts to ask.
Check out realtor.ca: This site is the mecca of home searching in Canada.
4. & 5. Showings and More Showings
This step is worth a double mention because chances are, you’re going to go on more showings than you anticipated. A few tips for making the most of your showing:
Take notes in the moment, so you remember key aspects about each property, as well as any questions you may have about each.
Don’t go to more than three in a day if you can help it: You want to be able to pay attention as you tour each one, and after three it becomes a little difficult to keep track.
Always go see a home before you offer (if you can!). Buying sight unseen comes with many large risks.
Don’t be surprised when homes don’t live up to the photos.
Don’t be surprised if you discover that you like or even love a home you weren’t anticipating having those feelings for.
Pay attention to the whole neighbourhood, and not just the house: How did you feel as you pulled into the driveway?
Make sure your realtor gives you feedback about each home. Some key insights they should offer include whether the home is priced appropriately, what the neighbourhood is like (safety, school districts, community), and any items that may require special attention from a home inspector.
6. Offer
Get ready to sign on the dotted line, and have your heart racing until you know whether your offer is accepted or not!
Drafting up and signing the offer is a time of major decision making - such as how much you’ll offer, and what your terms and conditions may be (e.g. home inspection, financing, sale of your existing home, etc).
But don’t worry: your realtor will walk you through each page and clause so that you understand what is in the offer contract before it’s signed and sent.
After you’ve signed off, it’s time to wait and see what the seller’s will do.
7. Negotiation
This step doesn’t happen 100% of the time. Some offers are accepted right away, and some are rejected with no negotiation offered.
If the seller’s do negotiate though, expect to get your original offer ‘signed back,’ with the proposed new terms that the seller would like to see before they’d consider accepting. This might be a different price, different closing date terms, deposit amount and more.
Once you receive this sign-back, it’s up to you to decide whether you’d like to improve your offer, or walk away.
8. Conditions
This is another optional step, but generally, if you’ve submitted an offer with a condition upon it, and the sellers have accepted, you’re now in a time period (usually around two weeks or so, although this can be negotiated as well) where you have the ability to satisfy any conditions before the sale is firm.
For example, this is when you’ll be able to go through the home with a home inspector, or firm up your financing with your financial institution.
If all conditions are met, and you’re satisfied with them (e.g. the home inspection didn’t reveal any red flags that would make you want to abandon this offer and shop elsewhere), then you’ll be required to sign paperwork that states that you’re waiving the conditions you’ve put on the sale and are ready to move forward.
9. Firm Sale
Get out the bubbly… You just bought a house! Time to celebrate, and prepare to move!
10. Closing
It’s closing day - the one you’ve been waiting for, when you finally get the keys to your new home. Congratulations!