The steps to buying a house in Toronto
Canada is a beautiful country. However, the bulk of the country is unpopulated with the majority of Canadians living in the cities of Vancouver, Calgary, Toronto or Montreal. Canada’s largest city, Toronto, has a population of 2.7 million people, but including the surrounding (well-connected) cities and suburbs, the metro area population more than doubles, reaching 5.9 million people. Having so many people chasing so few homes has created a very hot real estate market for anyone looking to buy a house in Toronto. Fortunately, the process isn’t too complicated if you’re really motivated to be a homeowner.
Get finances in order
The first thing any would-be Toronto homeowner must do is get their finances in order. This means paying off debt, including student loan debt, and raising your credit score. Because the housing market is so competitive, many people will offer to buy a house in Toronto without a financing condition. Without a financing condition, a buyer cannot back out of the sale if they can’t get a mortgage.
Although pre-approvals aren’t a guarantee, they’re the closest a Toronto house-hunter can come to knowing that they will get a mortgage. If you find that the amount for which you are pre-approved is too low, you have three choices:
- Improve your income
- Reduce your debt
- Look at cheaper real estate
Find a real estate agent
Although you could, technically, buy a house in Toronto without a real estate agent, spending a million dollars without consulting an expert– for free – seems unwise. Real estate agents are paid by house sellers, so house-hunters can benefit from all of the knowledge and advice of a real estate agent at no cost. Real estate agents will help iron out problems that might arise from the sale and will complete all the paperwork for you to sign.
In a hot market like Toronto, with homes selling for hundreds of thousands of dollars over asking price, having a real estate agent who is able to give you an idea of a home’s true price is invaluable. What’s more, in a multiple offer situation, homebuyers without an agent could be viewed negatively or excluded all together.
Do your research
Like with the financing clause, many Toronto home purchases are being completed without a property inspection condition. In other parts of the country, property inspections are essential– they help you know what’s wrong with your home, what could be wrong with your home in the future and how much it would cost to fix the home’s problems.
Unfortunately, it’s hard to write a competitive offer with a condition in it, so many buyers will forego the property inspection clause. Luckily, you can bring a knowledgeable friend with you to a showing, or you can learn what red flags property inspectors look for during an inspection. With this knowledge, you might feel more comfortable making an offer with no conditions.
In Canada’s biggest housing market, buying a home can be difficult. But, if you have your heart set to buy a house in Toronto, there are a few basic things you must do before you go house hunting. First, get your finances in order and get a pre-approval. Next, find the perfect real estate agent for your location and budget. Finally, find a knowledgeable friend or do some research into what red flags you might encounter if you think you’ll need to buy your home without a property inspection. Happy house-hunting!