This week’s episode is all about buying your first home (Part 2). My friend Denise and I chat about buying a property. Denise is a home owner and has gone through the whole home buying process recently, so is full of up to date, handy information to share with us. In part 2 this week, we cover getting a real estate agent, budgeting for home expenses, house hacking, and more.

Key Takeaways

  1. As a buyer, you don’t pay a real estate agent anything. The seller is the one who pays commissions (around 5% of the sale of the home). The selling agent would get 2.5% and the buying agent would get 2.5%. You’re able to work with different realtors who specialize in different areas if you’re not set on a certain municipality or region.
  2. When buying a resale home, it’s important to get an inspection report – this indicates potential things that could be wrong with the house (i.e. how is the roof, how’s the plumbing, how’s the exterior). However a home inspector can’t open dry wall and see what’s inside the walls so it’s important to have an emergency fund for unexpected expenses.
  3. Land transfer tax is a large one-time fee that you pay on closing as a buyer. It’s a marginal rate – you can find the link for Ontario below. In Toronto, that tax is doubled. There are incentives for first time home buyers.
  4. Make sure you get a good real estate lawyer! They will make sure your land transfer tax is calculated correctly, any rebates you’re entitled to are applied, and they will run a title search on the previous ownership of the house. This is really important to make sure everything is good with the previous ownership!
  5. Consider buying appliances instead of renting (i.e. hot water tanks). It could be worthwhile to purchase outright in the beginning.
  6. Consider house hacking! Buy a property, rent out a room or your basement suite. However, ensure that your basement apartment is in compliance with municipal codes. For example, Brampton, Ontario has really strict guidelines on basement apartments.
  7. Understand what you can afford and budget for everything!

Listen Now!

Links

Tarion Warranty on new homes

Land transfer tax in Ontario

Mortgage Calculator(from Gov’t of Canada)

Basement apartment regulations – Toronto

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Thanks so much for tuning in!

On the fourth episode of MI$$ FINDEPENDENT, Gloria is joined by her friend Martin, they discuss budgeting – what a budget is, tools to help you budget, our expense tracking in the last month and what we learned from them, the social aspect of saving, habit creation for budgeting, and how to make budgeting not feel so restrictive.

Homework
Task 1: Calculate and categorize your expenses for the last 3 months (or maybe 2019 to get an accurate pre-COVID picture)
Task 2: Create a spending plan

Links
Canadian Financial Capability Survey Highlights
Government of Canada Budget Planner
Mint

Listen now: