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1. “I got a new job!” While of course we’re pleased for you personally, recognize that many lenders will not honour a mortgage pre-qualification if you change jobs until after you’ve passed the probationary period.
2.” I went to an open house on the weekend and put in an offer on a house.” If you’ve been working with a REALTOR for some time, you’ve likely signed a Buyer Representation Agreement – meaning that the agent has agreed to work in your best interest (instead of the Seller’s) and you’ve agreed to use that REALTOR if you buy a property. If you put an offer on a house without your agent, you’re not only in contravention of that agreement, but you probably used an agent who was working for the Seller instead of for you.
3. “All my money is in an RSP.” It’s great that you’re using your RSP to fund your first purchase, but you’ll need to have access to cash for the deposit: around 5% of the purchase price, which needs to be delivered to the listing brokerage via bank draft or certified cheque within 24 hours of your offer being accepted. If you’re serious about looking for a home, make sure you can access cash or have a line of credit available to fund the deposit.
4. “The dishwasher doesn’t work – and I’ve only owned the condo for 2 days!” On the day you get possession of your new home, you MUST check that all the appliances (and furnace, air conditioner, etc.) are in working order. Your agreement with the Seller likely only requires that things be in working order on the day of close. If the dishwasher isn’t working on the day you get the keys, the Seller will likely have to remedy that. If it breaks 2 days later, it’s on your dime. If you only notice it’s broken 2 days later, it’s still on your dime.
5. “My sister, mother, second cousin and ex-boyfriend need to approve the house before I put an offer on it.” It’s not that we don’t want to hear you say that – if that’s in fact the case, that’s cool. The key is that the people who will be involved with the decision should be part of the house hunting process. There’s a lot to learn about what you get for your money in Toronto, and if your inner circle thinks you can get an amazing house downtown Toronto for $400,000, then it’s probably best that they learn the reality before you fall in love with a home.
6. “I want to use my friend the criminal lawyer to handle the legal aspects of my condo purchase.” Real estate law is a specialized field and we always recommend our clients hire real estate lawyers (vs. any kind of lawyer) to handle the details of any purchase or sale. It also helps if they are experienced with the Toronto market and familiar with condos if you’re buying a condo. I know your criminal lawyer friend might give you a discount, but a few hundred dollars in savings won’t be worth the headaches that will ensue if they aren’t familiar with the process. (Trust us, we speak from experience on this one.) Here are some of the lawyers we trust and work with most.
7. “I want a fully renovated 3 bedroom house on the best street in Trinity Bellwoods, with a big backyard and parking, for $500,000.” I want that house too! But the reality is that every home buyer makes compromises – you won’t likely get the location you want + your desired style and finishes + the size of house you want, unless you have an unlimited budget. And even then, we’re at the mercy of what’s available for sale at any given time.
8. “I have saved 5% of the purchase price. Exactly.” Sure, you can buy a property in Toronto with a 5% downpayment (with CMHC insurance), but don’t forget that you’ll have to pay legal fees and land transfer taxes too. You’ll also encounter many unexpected expenses. Before you fall in love with a home, make sure that you have flexibility with your finances.
9. “We’ve changed our mind about the house. We want to get out of the deal.” Most offers to purchase are conditional on certain things, for example, obtaining satisfactory financing or a home inspection. Once you’ve waived those conditions and your offer is considered ‘firm’, you are legally obligated to close on the transaction. You can’t just change your mind without risking losing your deposit and being sued. If you’ve changed your mind during the conditional period (and for one of the reasons that your conditions covered, for example, you weren’t able to obtain financing or the home inspection revealed defects you aren’t prepared to deal with), then you should be able to get out of the deal without penalty.
10. “I’m a first-time buyer but my parents have my name on the title of their home.” Many of the first-time buyer rebate programs require that you’ve never owned a home anywhere, and if your name is on the title of someone else’s home, you’re considered a home owner. This can mean thousands of dollars of government money that you won’t be eligible for.
If you’re a Toronto Buyer, contact us to give you the straight goods on buying a home in Toronto.