Do’s And Don’ts When Buying A Toronto Home

Whether you’re a first-time buyer or buying for the second or umpteenth time, there are some basic rules about home buying that you should not deviate from.

First The To-Do’s

• Schedule a time to meet with a mortgage lender and find out what the maximum mortgage amount that you qualify for is. You won’t necessarily borrow that total amount but it’s important for planning purposes to know the MAX you qualify for.
• While you’re with the lender, get it in writing as to what interest rate they’re guaranteeing you and how long that rate guarantee is good for – we call it a Full Mortgage Pre-Approval letter
• Find a buyer agent who you trust to work in your best interest. They should be knowledgeable, patient and be willing to take the time to answer all your questions. When they’re showing you homes, they should be showing you the defects in the homes as well as the good features.
• Now that you’ve chosen which Realtor to work with, meet with them face-to-face for a buyer consultation. You’ll learn a lot about the home buying process and your buyer agent will learn a lot about exactly what kind of home you’re looking for.
• Learn the truth about what’s happening in your local real estate market. Media reports are often outdated or don’t relate specifically to the neighbourhood(s) that you want to buy in.
• Ask to see your buyer agent’s CMA (comparative market analysis) which will tell you what the home you’re interested in is really worth based on recent sales of comparable houses or condos – you don’t want to overpay in any market.
• Set aside a few hours and attend a home buyer seminar in your area… the knowledge you’ll gain will be invaluable! You’re spending often hundreds of thousands of $$dollars – isn’t it worth a few hours of your time to make sure you do it right?

Now The Things NOT To Do

• Don’t add extra debt on in the six months before you buy a home. Wait till after closing before you go to buy or lease that new vehicle. That extra debt will prevent you from borrowing as much as you might previously have been approved for.
• Pay all of your credit cards and any consumer loans right on time. Pay at least the minimum card payment and then pay more later if you want. This way the credit bureaus will give you an R-1 rating (the best). If you’re late on payments, your rating could slip to R-2, R-3 or the worst R-9!
• Don’t change jobs – especially between the time you buy and the date you close (get your keys). Many employers have a 3-month probation period and lenders want to know that you’re fully employed and not subject to possibly being let go in the next few months
• Don’t go out and start looking at homes without doing your homework first… get that full mortgage pre-approval in writing. The most common reason buyer’s offers fall apart is because they didn’t supply their lender with proof of income, proof of down payment AND get their credit bureau done BEFORE they started their home purchase. If your lender says “I don’t need that information till you bring me an offer”, you need to switch lenders immediately. They’re NOT doing you any favours whatsoever!
• Under NO circumstances use the listing agent to buy a home… they are, by agency law, working for the seller! Since using the services of a buyer agent doesn’t cost you anything, why would you ever want to purchase a Toronto home without having your own representation?
• Don’t sign a buyer agency contract without asking the buyer agent “What happens if I’m not happy with your service?”. If they don’t offer a written guarantee that you can cancel the contract, don’t work with them.
• The biggest time-waster buyers encounter is starting to look at homes without spending at least an hour with a buyer agent in front of a computer looking at homes. You’ll end up driving around looking at properties that often don’t fit your needs and get frustrated about the home buying process.

I hope this list adds some insights to your home buying knowledge. If you’d like to learn more about how a buyer consultation works, click here.

Thought about going to a home buyer seminar? Learn more here.

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