How to Buy a House in Hamilton, Ontario | Ontario First-time Home Buyer's Guide

Being a first-time homebuyer in Ontario can be challenging in today's market. It is still possible to get great deals and be able to obtain financing for your dream home.

The following 8 steps are a high-level overview of the home-buying process:

 

Step 1: Finding an Agent

Finding an agent that you can trust and feel comfortable with is just as hard as finding the right home for you. A purchase of this magnitude is a huge life decision and you want to make sure your REALTOR® is just as invested in this purchase as you are. Don't be afraid to interview your REALTOR®!

Some attributes to look for when looking for the right REALTOR® for you are: 

• Industry Knowledge: having a wide variety of resources can ensure your REALTOR® can bring you an abundance of valuable information and advice that is not readily available to the public. 
• Customer Service Skills: being able to effectively communicate with you, while putting your needs first with the utmost empathy and loyalty, is a great indicator of an overall pleasant experience in such an important stage in your life.
• Professional Experience: undergoing annual training and maintaining compliance with RECO to ensure they are up to date with the legal and administrative aspects of the Real Estate Industry.
• Smart Negotiating: with your REALTOR®'s experience and expertise, they should be fully equipped to strategize and negotiate the best price for your home.

 

Step 2: Financials

In this step, you want to reflect on your finances and determine a surface-level budget that will best suit your needs. Typically, your budget should fall within 3-5 times your annual income.

Obtaining a pre-approval with your Mortgage Agent, before beginning your search, is pivotal in setting the right expectations of what your budget really can be. This can also benefit you in the offer process as it will show the seller that you are serious about proceeding and that you have the funds to do so.

Typical closing costs to consider: 

• Legal fees
• Land registration fee
• Title insurance
• Down payment
• Moving expenses
• Possible prepaid utility and property taxes payments 

Typical ongoing costs to consider:

• Property tax
• Property Insurance
• Utility payments

As a first-time homebuyer, here are some benefits you can take advantage of:

• First-time home buyer incentive
• Land transfer tax rebate
• Home buyer's plan

A very important tip to keep in mind: All up until after closing you want to ensure your finances are pristine. Avoid opening up new credit cards, or loans, financing anything, or making big purchases and deposits. This could potentially affect your eligibility to obtain your full loan, even on closing day.

(Please note: I am not a Financial Advisor. Please reach out to your Financial Advisor or Mortgage Agent to find out how this can apply to your specific situation.)

 

Step 3: Planning & Touring Homes

Before diving deep into your showings, planning ahead will help you determine the ideal features of your future home.

Factors to consider:

• Location: do you require a school within your neighborhood? are you willing to commute to work?
• Type of property: Attached or Detached? 
• Type of ownership: Freehold or Condominium? 
• Wants vs. Needs

Types of Properties:

Detached	Attached
Bungalow	Townhouse
Bi-split	Semi-detached
1.5+ Storey homes	Linked dwelling
Split level	Multi-unit dwelling

Types of Ownerships: 

Freehold	Condominium
The owner owns the property and the plot of land it sits on	The owner owns the unit and shares ownership of the common elements
Responsible for all improvements and maintenance of interior and exterior	Pay maintenance fees for all improvements and maintenance of common areas
Offers the most privacy	Typically more affordable than Freehold

Creating a Wants vs. Needs list helps create a standard for what homes really suit your needs. Being able to identify compromises, and sorting past properties that are not the best fit for you will make your search so much easier. By preparing yourself in the planning process, you will be able to enter the market with more confidence and act swiftly and submit an offer as the right home becomes available.

 

Step 4: Putting in an Offer

By this step, you have found a property you've fallen in love with and can imagine living in. In this stage, it really depends on where the market is at on how you and your REALTOR® can strategize your offer. 

In a Buyer's Market, there is more supply than demand, typically the buyer has the upper hand.

In a Balanced Market, there is an equal amount of supply vs. demand.

In a Seller's Market, there is more demand than supply, typically the seller has the upper hand.

In regards to negotiating offers, be prepared to receive a counteroffer, which means you've gone into negotiations on the property - don't be afraid to bargain for your price, you want to ensure it is fair for you!

Your offer can also be accepted, or alternatively rejected, which is not the worst scenario, as you can submit a more desirable offer.

Step 5: Inspection

After acceptance of your offer, an inspection will take place on the property.

Make sure to have an inspection condition completed prior to the closing of the sale. It is important to know as much as possible. 

If anything serious comes out of the inspection, depending on how your REALTOR® inserted the condition on the offer, you should be able to back out of the agreement, or gives you more negotiating power.

 

Step 6: Appraisal & Loan Approval

Other checks you should run prior to the closing of your new home:

1. Appraisal*
2. Property title search*

Your mortgage agent may also want a formal appraisal of the home prior to issuing your loan. Be sure to purchase insurance for your property, as this can affect your financing as well.

* to be completed by a 3rd party professional.

 

Step 7: Scheduling Your Move

Some things you will want to keep in mind as your closing date approaches: 

• Movers
• Renovators/ Contractors
• Cleaners
• Transfer of utilities
• Move out details*

* Touch base with your REALTOR® and Lawyer to ensure and get everything organized for that day.

 

Step 8: Closing

Closing is the final step for you to become the legal owner of your home. You will take a final walk-through just before closing to assure that negotiated work has been completed and everything is in working order. 

The closing process itself requires a lot of paperwork and patience.

Don't forget to re-key all the locks and change the garage door opener when the property is officially yours.

Congratulations on your new home! 🏡🔑🍾

 

By following these steps, and working with your REALTOR® and other industry professionals (such as your Mortgage Agent and Lawyer), your dream home can be more attainable than you think. 

 

If you have any questions about the home-buying process or would like some assistance, feel free to email me at sharon.mousavi@exprealty.com.

 

 

Sharon Mousavi

REALTOR®

Helping you achieve wealth through Real Estate 🏡

 

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