Do you know what it takes to buy a property in Toronto? With the ever-changing real estate market and countless legal nuances, you need to have all the information before committing to a real estate purchase. We’ve put together this guide that will outline everything you need to know to get started.
You could do it alone, but if you want to land the home of your dreams, you need to have the right team behind you. This includes a highly experienced Toronto-based REALTOR® that will help you find a home that you can afford. You’ll also need a real estate lawyer to protect your contractual interests and a mortgage broker who will negotiate with lenders on your behalf to get you the best financing rate.
Toronto’s housing market is fierce. There’s low supply and high demand, so competition is expected. The only way to ensure that you win in the offer process is to have all your ducks lined up in a row. And that starts with having a pre-approved mortgage. That’s where your mortgage broker comes into play. They will help you find out how much the banks will lend you and then they’ll set you up with a pre-approval. This will ensure you know exactly how much you can afford before you start house shopping.
You’ll also need to know how much wiggle room you have if someone makes a counter-offer or if you’re faced with a bidding war. Your mortgage advisor can help you calculate your maximum spend. Deciding your total budget plus any deviations is a very important step, where the numbers you select should be agreed on by all parties involved in the purchase, such as your partner or immediate family.
Once you know how much you can afford, it’s time to utilize your agent to help find you the best community and home in your price range. They’ll send you the latest market data and custom listings that suit your criteria to help you narrow down your search. When you see a property that suits your budget and lifestyle, act quickly to have your agent set-up a viewing, as Toronto properties do not generally stay on the market very long.
Once you’ve found a Toronto property you love, it’s time to make an offer. Review comparable properties with your agent to get a sense of the property’s market value and what your agent expects the property to go for. Once you decide on how much to offer and whether to include any conditions, your agent will draft the offer, including the clauses necessary to protect your interests. If the bidding war ensues (which should be expected), your agent will help guide you through this process. They will remind you of the budget you set for yourself and advise you of the risks of spending more than what your lender might appraise the value at.
If your deal is accepted, you’ll then be required to meet all the conditions (title search, financing, home inspection, etc.) and submit your deposit through the lawyer in escrow. Your entire team will work to ensure that all of these conditions are properly met and that funding is available. If you’re putting less than 20% of the purchase price down, you’ll also need to get mortgage insurance through CMHC which will result in an additional cost.
On the closing date, once the closing papers have been signed and the financing is in place, the property will be transferred, and you will take possession. There will also be closing costs that you will be responsible for which your lawyer will outline in advance.
Purchasing a property in Toronto is similar to other locations, aside from the massive competition. To get what you want, you need the right team behind you. At Medallion Capital Group, our mortgage brokers will help you get the right financing, and our in-house agents will find the perfect home to suit your needs and budget. We also have a maintenance team and full-scale property management team– we’re your one-stop-shop for everything real estate in Toronto and the GTA! Contact us today!