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.
- 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.
- 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.
- 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.
- 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!
- Consider buying appliances instead of renting (i.e. hot water tanks). It could be worthwhile to purchase outright in the beginning.
- 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.
- Understand what you can afford and budget for everything!
Mortgage Calculator(from Gov’t of Canada)
Sign up and get $10 to trade on Wealthsimple Trade
Sign up for no-fee banking with Tangerine or EQ using my referral code!