The current housing market is quite competitive in the Greater Toronto Area (GTA). With economic growth, and a decrease in unemployment, more and more people are looking to purchase property in the GTA.
However, with new government regulations, it has become tougher to borrow for a mortgage in Toronto, buyers may be looking into other markets. Toronto has one of the more expensive markets in Canada, with prices continually rising, so be prepared to pay more than in other Canadian cities. Bear in mind that location will play a big part in the amount you will spend on purchasing property in Toronto.
Online listings can give you a feel for the market and allow you to determine if a place fits your specifications. Most sites allow you to set-up alerts to find the best property for you.
Another resource is EasyExpat's Toronto Forum. You can chat with other expats on the forum and receive advice.
Although newspaper classifieds are less common, they can also be another resource that can assist you in finding a rental
Many places have billboards offering advertisements for a variety of goods and services. Watch these boards for useful postings. Laundrettes, cafes, grocery stores, community centers, and bars all might have private ads. While property listings are less common than rental announcements, they may offer a useful lead.
An estate agent is a very useful resource for finding the right place quickly. Also called "home search consultants" or "buying agents", agents advise their clients on legal pitfalls and available housing. An agent should:
If you chose to purchase property through a real estate agency, you may find many reputable agencies in your area online, in local newspapers, or through word of mouth. The Multiple Listings Service (MLS) through www.realtor.ca also indicate what real estate agencies represent each listed property, helping you find the right agency.
To purchase a property through a real estate agency, contact a real estate agency and provide them with your requirements (type of property, location, number of bedrooms, age of property, cost of property). A good real estate agent will search for a property until they find exactly what you need. You are free to change agents at your discretion. It may also be advisable to look for a realtor who has experience dealing with non-citizen property purchases.
You may also become a member with the Canadian Real Estate Association (CREA). CREA provides a variety of recourses to aid you in finding and purchasing a home in Canada.
While fees vary depending on the realtor, commission for a relator in Toronto should be around 5%. However, the buyer is not responsible for paying this commission, the seller should cover the fee.
When looking at properties, it is a good idea to bring a camera to take pictures of the site. This is a helpful tool when deciding between properties or remembering details. Also be sure to check the infrastructure. Look at elements such as flooring, and the heating, cooling, electrical and plumbing systems. Your home inspector will check these elements at the buying stage, but you should get a rough idea of whether they are in good working order before making an offer.
Before you sign any documents, including your contract with your realtor, have it looked over by a lawyer or advisor. It is extremely important that every element of a contract be understood before signing. If the language is different than your dominant language, you may wish to have it translated, or bring in a trusted advisor, friend, lawyer, etc. to check it over.
When you are ready to make an offer, you need to give the vendor an Offer to Purchase (sometimes called an Agreement of Purchase and Sale). If you are working with a realtor (and/or a lawyer/notary), they will prepare the offer for you. The Offer to Purchase is a legal document and should be prepared carefully. It usually includes:
At this point,
Once the offer has been accepted on all points, you have entered into a legally binding arrangement and neither party can withdraw without potentially being held liable for the consequent losses of the other party. Accordingly, you should be careful and only submit a written offer through an agent who has your best interest at heart
Once your Offer to Purchase has been accepted, go to see your lender. Your lender will verify your financial information and put together what's needed to complete the mortgage application. Your lender may ask you to get a property appraisal, a land survey, or both. You may also be asked to get title insurance. Your lender will tell you about the various types of mortgages, terms, interest rates, amortization periods and, payment schedules available.
To qualify for a mortgage in Canada you must first be interviewed by a financial institution via phone, fax, or email to gather personal information such as assets and liabilities, and employment and income information. You may have to submit income verification, tax returns, credit bureau or bank's reports, down payment confirmation, copies of two pieces of ID, and real estate appraisal. Applications are considered on a case-by-case basis. Mortgage approval typically takes 24-48 hours after application. Mortgages are only available from Canadian financial institutions. Foreign banks cannot register mortgages in Canada.
Non-Canadians are eligible for receiving a mortgage for 65% of the purchase price of a property in Canada. Non-Canadians must make a down payment of at least 35% of the purchase price. You will be required to present proof that you can pay the mortgage with proof of employment. The normal down payment for Canadians is 5-10%. The minimum down payment is 5%. Canadian residents can typically receive financing for up to 95% of the purchase price for a primary residence, over a 25-year term.
A mortgage loan is repaid in regular payments, either monthly, biweekly or weekly. More frequent payment schedules (for example weekly) can save some interest costs by reducing the outstanding principal balance more quickly. The more payments you make in a year, the lower the overall interest you have to pay on your mortgage.
Property Transfer or Purchase Tax and Land Transfer Fees
When purchasing a property, both non-Canadians and Canadians must pay a Property Transfer or Purchase Tax and Land Transfer Fees. These are calculated at 0.5-2% of the property's total value. Generally, these fees are 1% of the first $200,000 of value, and 2% of the remainder. First time home buyers who are permanent residents or citizens of Canada and have never owned a home anywhere else in the world are been exempt from this fee.
Average cost of $300-$1000, paid by the seller, for the arrangement of a clearance certificate.
Lawyer's fees are approximately $500-$800 and vary by province and the complexity of the sale and type of property.
Most mortgage brokers require surveys. If the seller does not have a survey, you must provide one at a cost of $150-$350.
A mortgage broker sometimes requires property appraisals. Appraisal fees are approximately $150-$250.
Home Inspection Fee
This is the equivalent of a survey in the UK and other countries, and is carried out at the purchaser's request, before final sale. Home inspection fees are approximately $450.
This covers the replacement value of the structure of your home and its contents, and costs vary accordingly. Most mortgage brokers require that you purchase property insurance.
Some utility providers charge fees for hooking up new services, from $35-$200 per service.
Condominium (Strata) Fees
Condo fees are charged monthly or annually and cover building insurance, maintenance, amenities, and repairs. Condo fees range from $200-$5000, and vary from building to building and city to city.
Non-Canadians are subject to all the same fees and taxes as Canadians when purchasing real estate in Canada. However, in some jurisdictions, non-Canadians must pay higher land transfer taxes.
Non-Resident Speculation Tax
As of 2017, non-Canadians and non-residents are subjected to pay and additional 15% tax on closing.
An owner of a property in Canada pays property tax. Property tax is the same for Canadians and non-Canadians, except in Prince Edward Island, which imposes higher property tax on anyone who is not a resident of the island (not just non-Canadians).
Non-residents of Canada pay tax on income received from sources in Canada. The type of tax paid, and the requirement to file income tax returns, depends on the type of income. Non-residents renting property they own must pay a 25% withholding tax on rental income. This is usually taken off of the monthly rent.
Closing day is the day when you finally take legal possession and get to call the house your home. The final signing usually happens at the lawyer or notary's office. What should happen on closing day:
Buying at auction is very exciting and can offer you a significant savings. This buying method is not for novices as there are many pitfalls. These are usually properties that are difficult to sell and/or need serious renovation.
If you are determined to buy through this method and are unexperienced, get the advice of professionals and preferably bring someone with experience. It is also advisable to attend a few auctions as an observer before placing a bid.