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CMHC Canadian Mortgage and Housing Corporation is a goldmine of informtion to get you ready to buy a home.
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New Builders

Daniels residential builder website can help you find a home to buy in one of their new communities.
Tribute Homes Finding a home to buy from one of Tributes new Builds.
Pemberton Group is a good builder to check out in your property searches. They have produced some very successful and well thought out layouts.
TARION is responsible for administering the Ontario New Home Warranties Plan Act, which outlines the warranty protection that new home and condominium builders must provide, by law, to their customers.
Property Guys For sale by owner.
RECO, The Real Estate Council of Ontario Administers and Enforces the Real Estate and Business Brokers Act, 2002, to which Real Estate Salesmen are subject.
TREB, The Toronto Real Estate Board

I've Found a Good Place, How Much Should I Offer?

You've finally found a home you would like to buy. How much should you offer? This is a question your agent will be able to help you answer.

How Much Can you Afford.

First and most important, you need to have done your homework and have a pre approval for a mortgage from your bank. You also need to have considered how much you can realistically afford to pay and still have enough to lead the kind of life you want. In other words you have a budget.

You have also considered all the extra closing costs maintenance or condo fees on the property.

What is the Home Really Worth?

Your Realtor® will do some research and give you an Opinion of Value. By looking at comparable properties that have sold in the area he or she will get a good idea of what the home is worth. He will also look at tax assessments, market trends, improvements done to the home, how well it shows, and whether it is more or less expensive than surrounding properties.

With this knowledge you will be well prepared to decide what to offer and how you will negotiate.

How much do I offer if there are Multiple Offers expected?

In the case of multiple offers, (when you are competing against other buyers for the same property) you are in a less favourable position than if you were the only offer. You need to put your best foot forward and present an interesting offer right off the bat. In most cases you will be given a chance to improve your offer, but not necessarily. The Realtor® representing the seller will probably be able to tell you if you will be given the chance to improve. The seller is not obligated to do so.

It's really important not to go over your comfort zone in the heat of the moment, and offer more than you can afford.

Your agent will be able to advise you.

Sometimes making a lower offer on an overpriced home is a successful gamble

I Went ahead and Offered More than my Agent Suggested the Property was Worth

If you offer more than what the property is worth there is a danger that you will not be able to get a mortgage, particularly if you do not have a large deposit.

If the lender/mortgage provider feels that the amount you offered is higher than the value of the home they will not be comfortable lending you money knowing that IF things go wrong there is not enough value in the home to pay them back.

What is the Value of a Parking Spot?

Parking Spots are all about location. It is not uncommon to see parking spots go upwards of 25,000 in downtown areas where parking is at a premium. Your agent will be able to advise you.

The Price on my Dream Home is Way Higher than What my Agent Thinks it's Worth.

Although it is almost always a big mistake to overprice a property, many people still insist on doing this in the hope that people will fall in love with it and pay a premium price.

Overpricing a property almost always insures that buyers will either not come and look at the home or that they will not place an offer. This can work to your advantage.

If the home has been on the market for a long time the buyer might be willing to accept a lower price. This is particularly true if you come prepared with valid comparisons and can convince the seller that your offer is a fair one. Your agent will be able to present the information.

If your offer is refused, you can take a chance and wait before you present your offer again. You might be able to present a better offer in terms of conditions or timing if this is important to the seller.

Deposits, How much should I offer?

Why a deposit and who gets it?

A deposit shows the seller that the buyer is serious. It is in fact putting your money where your mouth is. Banks like to see large downpayments because it means there is more equity in the home. Usually the Listing Broker keeps the deposit in his special deposit trust account. This account is strictly controlled by law, and is protected from bankrupcies and fraud by a special insurance.

Once the deal is accepted by both sides it becomes part of the money being paid by the buyer for the home. If no deal is made, the depost is returned to the buyer with no deductions taken from it.

How much deposit should I make?

It is customary to make a 25% downpayment if at all possible. This allows a buyer to get a conventional mortgage at the best rates. It is possible to purchase a home with much less however. In that case the difference is insured with CMHC and the buyer pays the insurance premium as part of the mortgage. Interest rates are not as favourable in this case.

It is common to present a cheque at the time of offer and there are substantial advantages to having a large cheque. It is very reasurring to a seller to see money up front. It implies you are serious and have the resources to purchase the home. Sometimes a cheque is presented at the time of offer, with a promise of further money at acceptance of offer by the seller. If the deal falls through you get the full amount of your deposit back. It is kept in a special trust account usually by the listing broker. The seller doesn't get any money until the deal closes.

How about cash or a certified cheque?

Everyone has a story of someone walking in with a paper bag full of cash to pay for their home. However now, because of money laundering, grow houses profits, and terrorist activities, walking in with large bags full of money will be met with suspicion rather than admiration. Realtors (and others) have to report large cash transactions.

It is desirable to certify your cheque before presenting it with your offer. It has the effect of giving sellers a nice warm confident feel in your ability to go through with the purchase.

In the event of multiple offers, having a certified cheque for a nice large deposit is one more thing in your favour. Deals have been lost where the only difference was a certified cheque.

Nick Boothby, Maddy Dennett and Greg McDowell
REALTORS® / Salespersons

Christine DeMerchant Unlicenced Support Person
Real Estate Homeward, Brokerage
1858 Queen St. E., Toronto, On, M4L 1H1, Canada
tel: 416-698-2090   fax: 416-693-4284
Maddy's cell: 416-951-5507   Greg's cell: 647-984-3065
emails: Nick   Maddy   Greg   

Disclaimer: Nick Boothby and his team take great care in insuring the accuracy of our facts but some information cannot be verified. We do not warrant or assume any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process discussed or presented.