In an ever changing marketplace, it is always a good idea to "get your ducks in order" before you start house hunting. Here are a few tips that we have put together over the years on how to prepare for buying a home in Hamilton!
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Consider the features that are most important for you to have in your new home. Be specific and think about your current and future needs. Are you a growing family that might need more space as kids turn into teens? Would you prefer a rural or an urban setting? Are you set on a specific neighbourhood? Do you require easy highway access or grocery stores within walking distance?
Working with Sarit and Jordan will allow you to narrow down your list to the more essential components and show you what is realistic within your budget.
Find Your Ideal Home
Before you start searching for your dream home, complete a financial review to see how much money you have to work with. This involves meeting with a mortgage agent or your financial institution to get pre-qualified for financing.
Calculate your current household budget and estimate a budget for your prospective home. If you're renting, keep in mind that you'll have some new expenses as a homeowner, such as costs for general maintenance and repairs, property taxes and home insurance.
The mortgage agent will ensure that your estimates are realistic and present you with a preliminary figure for pre-approval.
Now that you have your budget, stick to it. Make your wish list but don't be unrealistic. By staying within your means, you'll ensure that you still have money left over to contribute to savings, vacation funds and other expenses. Most importantly, you will be able to enjoy your home rather than have it become a burden.
Here's where your REALTOR®s starts to shine. Sarit and Jordan will scour the marketplace to find houses that match your criteria. They will send you relevant listings and stay hot on the trail of newly listed properties. Their goal is to weed out the bad from the good to lessen your workload. When they find a house worth viewing, a showing will be booked for you and they will take you through the houses. During these appointments, Sarit and Jordan act as your guides while pointing out the pro's and con's of each house. Here is where you can lean on their expertise when you see a house that you like.
This is the exciting part! Once you've found the perfect fit, Sarit and Jordan Zalter's negotiating experience will make sure you come in with a realistic number so that you don't bid more than the house is worth but also don't come in insultingly low and offend the sellers. They will also help you see the larger picture. For example, some houses might be within your price point, but will require too much maintenance or upgrades.
Sarit and Jordan will also help you look long term to create a realistic view of your potential new home.
If your offer is accepted, many will have a home inspection condition. This period is when a home inspector will assess the condition of the home, identifying any repairs or maintenance that need to be addressed. This is also a good opportunity for you to learn about the various systems in the house such as plumbing, electrical, roofing, and HVAC (heating & cooling). Home inspection costs start at roughly $300 and vary depending on factors such as the size of the home.
When you've found your dream home and decided to make an offer, you'll have to put down a deposit, usually in the form of a bank draft or certified cheque. The deposit amount is different for each property and generally depends on the price and location of the house. The deposit will be held in trust by the listing brokerage. If the deal does not come together, then the deposit is returned to you. If your offer is successful, your deposit will be deducted from the total purchase price of the home and is considered part of your down payment.
This is the total amount of cash payment you make for your home. The more you pay up front, the less you will have to borrow. However, you don't want to spend all of your money — you should ensure that you still have enough to cover the other costs of buying a home (explained below). The minimum down payment is 5% of your purchase price. For example, if you're buying a home for $400,000 then you would need to make a down payment of $20,000. Mortgage insurance is required for down payments that are less than 20% of the purchase price.
Should you default on your mortgage payments, this insurance protects the lender so that they are not responsible for paying the balance of the purchase price. If your down payment is less than 20 per cent of the purchase price of your home, you are required to have mortgage loan insurance. The cost depends on the price of the house and how much money you put down and is built directly into the mortgage.
Properties that are changing hands are subject to land transfer taxes and are the responsibility of the buyer.
In Ontario, the land transfer tax is calculated based on the price of the property using a tiered system:
- Up to $55,000 X .5 % of total property value
- From $55,000 to $250,000 X 1 % of total property value
- From $250,000 to $400,000 X 1.5 % of total property value
- From $400,000 up X 2 % of total property value
For example, if you buy a property for $260,000, 0.5 per cent is charged on the first $55,000, 1 per cent is charged on $55,000 – $250,000, and 1.5 per cent is charged on $250,000 – $400,000. The total land transfer tax would be $2,375.00.
You may be eligible for a refund of all or part of the tax if you are a first-time homebuyer.
To ensure that your new home is worth what you're paying, your mortgage lender usually requires an appraisal to assess its value. The cost for an appraisal is usually between $250 and $500, but is typically covered by your financing institution.
You will need a lawyer to handle some of the paperwork. They will discuss important aspects of a potential purchase with you, including title insurance and property rights. Legal fees can vary widely depending on the complexity of the deal. It is also important to note that legal fees for condominium purchases are usually more expensive since they require more paperwork.
Upon closing, your mortgage lender (if applicable) will require that you to have property insurance for your new home. The costs depend on several factors such as the value of the property and thus varies greatly. You can use the same company that you have other insurance policies with or try using a broker, who will search the options of all companies to find you the best deals.
Professional Moving Company
Moving expenses vary widely depending on how much furniture you have and from where you're moving. If you decide to hire the services of a professional moving company, ensure that you ask for referrals and take some time to research rates, levels of service and insurance coverage.
Another option is to rent a truck and move your furniture with the help of family and friends. Be sure to book your mover or truck in advance, as most people move at the same time of the month.
General Contractors and Designers
Perhaps the home that you purchase is missing some elements that were on your wish list. If you are considering renovations, line up your trades people well in advance. It is ideal to have a timeline and budget in place before homeownership, if any of the projects are essential. Remember that most trades are scheduled months in advance. Don't be afraid to ask Sarit or Jordan for recommendations, particularly if you do not have people that you are comfortable working with.
Remember that you'll have to hook up all your utilities such as Internet, gas, electricity, water, cable, phone, and other connections. There may be service fees to have these done, but this should be booked well in advance of moving in.