Buying Real Estate in Toronto

To Own or Not to Own?
For many, homeownership is a compelling dream. We look forward to the freedom and security of owning our own home, and are more than willing to make sacrifices to achieve our goal.

But owning a home is not for everyone, and you must consider your personal needs carefully before taking on this large responsibility. Your decision to buy should include an assessment of your financial situation and how well you manage your money. But first, a word or two about timing.

When should you buy?
Much has been written about the “right time” to enter the real estate market and become a homeowner. This is especially challenging when the market seems to be changing. If housing prices are falling, people tell you to wait until the market “bottoms out” before buying. When prices are increasing quickly, there’s an urgency to buy and avoid being left behind. Unfortunately, even the so-called “experts” can’t predict accurately when a market will reach its peak or lowest point.

Remember the primary purpose of buying a home: to provide you and your family with a comfortable place to live for several years or longer.

Making your money work for you.
There are two additional and related factors that make home ownership financially attractive: “leverage” and “capital gains exemption”.

When a relatively small amount of your money controls a much larger asset, that’s called leverage. For 25%, 15% or as little as 5% of a home’s purchase price, your hard-earned cash can be used to acquire a house worth tens or hundreds of thousands of dollars. The more your money is “leveraged” in this way, the greater the financial return on your initial investment (down payment) as the value of your house increases. Few other major investments can be purchased with as little as 5 to 25% of your own money.

No tax on your home’s capital gain.
As we’ve just seen, the increase in a home’s value (and almost any other type if investment) is called a capital gain. When the value of most investments such as stocks or term deposits increases, you pay tax on the capital gain. However, the government allows Canadian taxpayers to be exempted from paying capital gains tax when their principal residence increases in value.

A home inspection determines the structural and mechanical soundness of your home. The inspector will identify existing and potential problem areas, and suggest practical low-cost solutions. An inspector may also provide estimates regarding costs for any work required.

After the inspection is complete a report summarizing the findings is provided to the purchaser. Arranging a home inspection prior to purchase protects both yourself and your investment, as well as giving you some peace-of-mind.

Home inspection costs can vary depending on the size of your home, its age, and location. Your Right At Home Realty sales representative can recommend a reputable home inspection service or arrange for a home inspector to visit your property.

Home Inspection
Buying a home is one of the most important investment decisions you will make in your life. It makes sense to enlist the services of a qualified home inspection company to ensure your home is as solid and secure on the inside as it is on the outside.

Title Insurance
Title insurance is growing in popularity in Canada, but what is it? Should you get it? Do you really need it? Check the link for an article that will provide you with some background information about title insurance to help you make an informed decision.

Title to property
Title is the legal term for ownership of property. Buyers want “good and marketable” title to a property - good title refers to title appropriate for the buyer’s purposes; marketable title refers to title the buyer can convey/transfer to someone else. Before closing, public records are “searched” to confirm previous ownership of the property, as well as any prior dealings related to it.

The search may reveal any existing mortgages, liens for outstanding taxes, utility charges registered against the property. Upon closing the buyer the property to be free of all claims, so they must be cleared up before closing. For example, a seller’s mortgage must be discharged with any outstanding monetary expenses (such as taxes and utility charges) paid.

Advantages of working with an agent when buying a home
* Your real estate agent is an experienced negotiator who will negotiate the offers and counter-offers.
* Your real estate agent is familiar with the neighbourhood and can give you information on local real estate values, taxes, utility costs, services and amenities.
* Your real estate agent is familiar with process of buying a home and can advise you of your legal and financial options.
* He/she can also recommend appraisal, home inspection and contracting services.
* Your real estate agent will search for homes that fit your needs and desires, saving you time.
* Your real estate agent knows potential problem areas in a home and can advise you about your options.

Sometimes problems (also referred to as defects) regarding title are not discovered or remedied before closing. Any such defects can make the property less marketable when the buyer subsequently sells and may cost money to remedy.

For example, the survey might have failed to show that a fence built between a neighbouring property was built outside the property line without the other owners permission. The buyer is later forced to move/remove the fence he could be out-of-pocket.

In another example, the property may have been conveyed to a previous owner fraudulently, in which case there is a risk that the real owner could come forward at any point and demand their rights with respect to the property.

Protection and peace of mind
Title insurance can help ensure that a closing is not delayed due to title defects. If a title issue arises with respect to a risk covered under the policy, the title insurance covers the legal fees and expenses related to defending the insured’s title, and pays in the event of loss.

Housing options for empty nesters and retirees

Condominium Charm
Little maintenance and lots of amenities make the condominium lifestyle a favourite of empty nesters and retires. Condominium apartments and townhomes are available in almost every price range and most neighbourhoods. Many offer facilities such as swimming pools, tennis courts and fitness areas and some even include golf courses.

Unlike owning your own property, a condominium is governed by the by-laws, rules and regulations established by the condominium board. These rules are necessary to ensure the enjoyment, safety and cleanliness of the condominium by all its residents. It is wise to check with the condominium board to determine how these by-laws, rules and regulations affect you as an owner, especially if you have a pet.

Single, detached and bungalows
Bungalows offer the best of both worlds: the opportunity to own a house and a yard with minimal maintenance. The popularity of “bungalow living” has surged in recent years, especially in suburban communities. Many empty nesters and retires are deciding to sell their larger, more expensive homes in the city for a less expensive bungalow in more rural areas.

Retirement villages
Retirement communities offer smaller homes and the opportunity to live with like-minded individuals.

In Canada we began to see Adult Lifestyle Communities in the 1970s. Today’s complexes house approximately 500 - 1000 families in apartment units to single detached homes. The focal point of these communities is the clubhouse, which offers a variety of amenities such as fitness facilities, tennis courts, games rooms and swimming pools. Some areas also have golf courses available.

Modern retirement communities have a resort-like feeling to them. They’re built in rural areas close to large urban centers, but just far enough away from the hustle and bustle of city living.

If you’re undecided about the alternatives available to you, speak with your Right At Home Realty sales representative. He/she can provide you with a free estimate of the value of your home and help you determine what type of property will best suit your lifestyle.

The kids have grown-up, your pension is just around the corner and the home that you live in and love is too big for just the two of you. Your friends have already downsized to smaller homes and retirement communities. They say the advantages are obvious. Smaller homes mean lower costs and less maintenance and retirement communities offer like-minded neighbours. The decision to change your lifestyle is yours.

For many empty nesters and retirees, moving is an overwhelming experience both physically and emotionally. Preparing yourself in advance for your move can make all the difference in the world. Once you’ve decided that you are ready to make a change, there are many options available to you.

Your ideal “retirement” home is one that will provide for the inevitabilities of aging and accommodates your changing needs. The more the home matches your needs, lowers the chances of a subsequent move.

Making the right choice can save you money. Decide how much you want to spend and then decide what your dollars will buy in the areas you are interested in.

Your first decision should be “do you want to stay in the same neighbourhood”? You’ve called this home for many years. Ask yourself: “Can you leave behind your friends and acquaintances?” “Can you say goodbye to your trusted doctors, friendly shopkeepers, and familiar surroundings?” Only you can answer these questions.

If you decide to move out of your neighbourhood, where would you like to go? Do you want better neighbourhood within the city or a community in the suburbs? What about moving down South?

What type of home suits your lifestyle? Do you see yourself in a condominium promising little or no upkeep, or a small bungalow that would grant you the freedom to garden?

Which neighbourhood?
The neighbourhood you choose to live in should be well suited to the needs of you and your family. Some things to consider in your decision includeâ€¦

* Environment - The air, water and soil quality is a top concern for many as a polluted neighbourhood can be harmful to both your health and property value. Check with your real estate agent, neighbours and local media about any environmental issues in the area.
* Appearance - The home you are considering may look tidy and attractive, but how does it compare to the surrounding area? Explore the neighborhood and look for signs of neglect (i.e. overgrown lawns, houses needing paint, trash and junked appliances littering yards). No matter how diligent you are with your property, a run-down neighbourhood can drive your property value down.
* Crime rate - Check with the local police departments about the safety issues for the neighbourhood. Police are able to provide statistics regarding break-ins and other crimes.
* Schools - The quality and proximity of schools is important if you have children. Talk with neighbours who have school age children. Some area schools will provide data that can aid you in determining a school’s quality. In Ontario the EQAO (Education Quality and Accountability Office) post Grade 3, 6 and 9 test scores on the individual Board websites. You can also visit the EQAO at www.eqao.com.
* Transportation - Convenient access to public transportation and/or major highways can sometimes mean the difference between a pleasurable and unpleasurable commute to work.
* Amenities - Grocery stores, parks, recreational facilities, post office, dry cleaner and a doctor’s office can make life easier if they are nearby.
* Property Values - Researching the selling prices of homes over the past decade, can help you see possible future trends. Your real estate agent is able to provide you with other helpful data.
* Utilities - Avoid surprises by checking in to utility costs before you decide to purchase. Fees for water, electricity, cable, phone and gas can vary greatly by region.
* Noise and Nuisances - It is hard to get a good impression of a neighbourhood with just one visit. Return to the neighbourhood at different times of both day and night. Listen for traffic noise, barking dogs, trains and any other noises that may bother you as a resident.