If you’re a first time home buyer in Toronto, there’s a lot of things you need to learn. Condos are a trending choice of a house by new homeowners. For many, the realistic way to own a home within the expensive market of the city is to buy a condominium. Most of the properties now make for a large number of new homes under construction.
Investing in a home is one of the most crucial steps that you will take in life. The cost of buying a condo in Toronto is still a lot less than investing in a house. In this post, we are going to talk about the mortgage requirements and rules, the mechanism of property hunting, and finally closing the deal.
Just simply sit back and learn all about how to buy a condo in Toronto.
The Mortgage Pre-Qualification in Buying a Condo
Before you jump into learning how to buy a condo in Toronto, you need to sort out your finances and get a pre-qualification for a mortgage. Essentially, you need to figure out how much your bank is willing to lend you to buy a property. The lending criteria differ depending on the bank and they will check with your income and credit history along with your debts. Ensure that your pre-approval comes in writing which includes the interest rate which is guaranteed. This will be valid for 90 days from the day of issue.
With the pre-qualification, you can be ensured of how much mortgage you can get to help you filter your options for your target properties. This will help you in narrowing down your efforts for the house hunting and eliminates the uncertain financial terms when you buy a condo in Toronto.
The Universal Stress Test
Condominiums have become very viable for home buyers across many locations in the city. With blooming millennials, first time home buyers along with old-home owners and even investors, the hunt for these properties is endless. Recently introduced mortgage stress tests will essentially stop some people from buying a condo in Toronto and hence, dent the overall growth. With tighter rules for lending, the real estate market has witnessed a lot of disturbances.
In the current scenario of the market, the universal stress test is implemented. Home buyers should qualify for mortgage depending on the five years posted rate or even the contract rate along with the 2 percent, depending on which is greater.
6 Things To Do Before Buying a Condo in Toronto
The following items must be considered before buying any properties in the city. These steps have been collated by our real estate experts to help first-time buyers in getting their own investment. Now, they would love to share it with you.
1. Pick a Qualified Team
Buying a condo in Toronto is one of the biggest investments you will ever make so you might be under a lot of stress. You can take help from a real estate agent who will exclusively work for you. Along with that, you will also require a lender to evaluate your finances. Additionally, a lawyer will help you sort out all the legal requirements involved in buying a property.
It’s good to get all the extra help to make an informed decision on how to buy a condo in Toronto and you can even consult with your friends, family, and acquaintances to get tips about making a purchase.
2. Make a Wish List of Properties
Once you’re through making a budget limit, you can start making a property wish list. This will filter out properties based on your needs and expectations. There’s a lot to consider while you’re making this list like the geographical location and facilities provided. You might sort it out based on the number of bedrooms you need, what type of building it should be along with its neighborhood. Make sure that the building is close by amenities like transportation hubs, restaurants, schools, and all that is relevant to you. Buy a condo in Toronto that has everything you need.
3. Get Started on Condo Hunting
Given that you’ve sorted your pre-qualification for a mortgage and have filtered your choices with a great team of consultants, you can go ahead to look at various listings. There are a lot of online outlets which can essentially help you with that. Your real estate agent can also help by sending you different listing based on your filtered conditions and criteria.
After narrowing down your choices, you can visit your potential future home. You can experience the neighborhood and surrounding of the building. After this, you can refine your list further as most home buyers get that special vibe with the place that they like. If the place manages to sway you with all the required facilities and necessities, then you can buy a condo in Toronto with such ease.
Before you make any decision, make sure that the physical condition of the building is good and properly maintained. You can hire a home inspector to provide you with a thorough report on the assessment. In the long run, this will prove to be great for you to avoid any headaches.
4. Make the First Offer
So, your hunting efforts have been paid off, now it’s time for the next stage. Once you’ve found the condominium that you like, you can start on bidding offers for the same. It should satisfy all your requirements and wishes within your budget range, and should definitely feel right. At times, home buyers ignore the power of negotiation while making an offer. This could be a great chance for you to save money with many potential upgrades. The offer process can be tedious and time-taking but with smart decisions, you can buy a condo in Toronto at the right price.
First of all, you have to draft an APS which stands for Agreement of Purchase and Sale. This document states all the legal conditions for the offer along with the included facilities with the sale, closing date, and several other conditions. Following this, your seller will evaluate the offer and settle for a particular deal by accepting it, rejecting it, or even responding with a counter offer of the price. Within the negotiation time, you might have to compromise with a certain number of things but if it’s a deal breaker for you, you can move on to something else.
Hiring a good realtor ensures that you get what you want in case you don’t want to compromise on things. There is no such thing as the “best place to buy a condo in Toronto”, but there will always be the “best person or team” who can help you in making the decision.
5. Confirm the Deal with the Payment
Within the APS, you have to agree to all the mentioned conditions in order for the sale to go through. Now you’re just a few steps away from owning your dream home. There may be a financing condition within the offer for your lawyer to review the financial terms properly with the home inspection and the details of the property. Furthermore, you will be required to deposit an amount of about five percent of the purchase until you close the deal. Once all the conditions are met and you’re happy with the deal, you can wait for the closing date to arrive. In the meantime, you can track packing for the move.
6. Closing your Condo Deal
You’re just a few steps from owning a condo in one of the greatest cities in the world. Closing the deal refers to the true ownership and possession of the property from the seller. After all the legal and financial conditions are met, you can go ahead with closing the deal. Your consulting team will help you with all the requirements for the same, this includes your lawyer and lender to oversee the close.
What Should You Know About Buying a Condo in Toronto?
Living in a condo in Toronto surely sounds exciting and it really is! The high-rise building homes can come with their own set of rewards and challenging scenarios. The view is certainly a huge positive, which gives an arresting view of the whole city. Most people choose to purchase a condominium for the lifestyle it provides. Popular ones are present to the downtown areas of the city with all the necessary facilities. You just need to read numerous guides which will help you find the right property to purchase.
Essentially, everything will be minutes away from your access starting from restaurants, transportation choices, amenities, and several other facilities. One of the biggest advantages of condominiums is the additional facilities it provides, like the pools, fitness centers, and entertainment grounds.
With the purchase expense of the condos, there are many common maintenance fees structures you should be informed of. The maintenance fees are usually a small percentage of the square footage of the place that you own. This goes for all the extra expenses required for utilities, operation costs, and other general costs for management of the building along with contingency reserve funds.
Our Final Thoughts
The modern age of the city is evolving with new condos being built in Toronto. People are realizing the new aspects of a lavish lifestyle with these properties along with its additional facilities. As a result, buyers are becoming savvier about what they want in and around their homes.
We hope that our informative guide will help you make a smart and informed decision when buying a condo in Toronto. Happy home buying!