Why buy? Two out of three Canadian families own a home – that's one of the highest rates of home ownership in the world. And for good reason. It's a great investment. And with with increasing house prices, it's all the more important for first-time buyers to get a foot on the first rung of the property ladder. Did you know that...
Homeownership is the single largest source of savings for Canadian households.
Unlike other investments, which can be quite volatile, the increase in the value of homes is relatively steady. The average house price in Canada has increased every year since 1998.
The return on your investment in your home can be substantial. In 2004, the average house price in Canada rose to a record $227,210 – a 9% increase in just one year and a 27% increase over four years.
Homeowners can use the equity in their homes as security for other loans.
Building equity in your first home is the first step on the property ladder. It gets you into the market, keeps you in touch with increasing house prices, and puts you in a good position to trade up to bigger and better houses as your circumstances allow.
Needs vs. Wants What features do I want in a home? What features do I need in a home? Looking for a new home can seem overwhelming at first. There are so many things to think about, so many choices, and often not enough time. A small investment of time and effort right at the start can pay tremendous dividends. Take the time to organize your thoughts and think seriously about what sort of home you want before you start looking. It will simplify the process, save you time, and help lead you to the right home for you. Make sure that you talk to a REALTOR® before you start your search to help you get organized, answer your questions, and also to raise important questions to ask yourself, such as:
Where do I want to live? (community/general area)
How much should I expect to spend on purchasing a home?
Are schools a factor?
Do I want an older home or a new one?
What style of home do I prefer? (ranch, colonial, split-level, multi-level, town home, condominium, multi-family, bungalow, other)
How much renovation and remodeling am I willing to do?
Is being close to public transportation important?
Do I have special physical requirements, such as wheel chair access?
Do I have pets to consider?
What sort of lot would I like? (small yard, large yard, fenced, garage, patio/deck, other buildings)
How many bedrooms do I need? How many would I like to have?
How many bathrooms do I need? How many would I like to have?
How big a house do I want? How many rooms? How many square feet?
What features are important? (air conditioning, carpeting, ceramic tile floors, hardwood floors, eat-in kitchen, separate dining room, formal living room, family room, den, library, basement, separate laundry room, fireplace, workshop, other)
Making an Offer When you’re making an offer to buy a home, there are six main elements to consider:
PriceThe price you offer reflects your opinion of the value of the house and is determined by the condition of the property and local market factors. You can make any offer you like. It does not have to be the same as the seller's asking price.
DepositThe deposit shows your good faith and will be applied against the purchase of the home when the sale closes. Your Royal LePage Realtor can advise you on an appropriate amount.
Terms Include the total price offered and the financing details. You may arrange your own financing or ask to assume the seller's mortgage, especially if it has an attractive interest rate.
ConditionsConditions are items that must be completed or fulfilled prior to an offer being concluded. These can include subject to home inspection, subject to you obtaining financing, or subject to you selling your existing property.
Inclusions and exclusions Your offer may be contingent on certain items being either included or excluded in the sale. These might include appliances, fixtures, and decorative items, such as window coverings or mirrors.
Closing or possession date The closing date is generally the day the title of the property is legally transferred and the transaction of funds finalized, unless otherwise specified (except in Manitoba and Quebec). In British Columbia the possession date is legally one to three days after closing.
Negotiating Once your offer to purchase has been drafted, it will be presented to the seller as soon as possible. The seller can accept your offer, reject it, or make a counter offer. Acceptance An accepted offer means the seller has agreed to all the terms and conditions exactly as set forth in your offer to purchase. Rejection A rejected offer means the seller did not agree with any of the terms and conditions set forth in your offer to purchase. Counteroffer A counter offer means the seller agrees with some of the terms and conditions of your offer, but not all of them. The seller then makes a counter offer. The counter offer may change the price, the closing date, or add or delete conditions. Once you have received a counter offer you have two choices. You can accept the new terms and conditions or reject them. If you reject them, you can choose to start the whole process over again.
Inspections & Appraisals Buying a home is probably the biggest single investment you will make. A home inspection prior to making an offer will protect you and your investment. A qualified home inspector will give your house a thorough examination, checking the heating and cooling system, plumbing and electrical systems, the roof, attic, walls, ceilings, floors, windows, doors, foundation, basement, and visible structures of the home. The inspector will point out the need for major repairs, identify areas that may need attention in the near future, and explain what maintenance will be necessary to keep the house in good shape. But, it is not all negative. Most inspectors are more than happy to tell you about the home's good qualities as well. Home inspections are relatively inexpensive considering the size of the investment that you are about to make. Many people consider this a small price to pay for peace of mind. Nancy Wilson can provide you with a list of reputable, qualified home inspectors in your area. Appraisals An appraisal is a report containing an estimate of the value of the property. Appraisals are conducted for the purpose of mortgage lending by certified appraisers. The appraisal should not be confused with the home inspection or the market analysis.
