WHERE DO I BEGIN?
Putting Together the Down Payment
If you’ve been thinking about buying a home for some time, you probably have some savings set aside already. If you’re just starting to think about it, consider this as a technique for building up the down payment fund.
Consider setting aside 10% of your net income or take-home pay every month. Deposit it into a special, premium interest savings account set up for that purpose. If you wish, your financial institution may set up an automatic transfer from the account where you deposit your pay cheque, so that every month that 10% gets put away and starts immediately earning interest.
Look into government programs designed to assist home buyers. Check your telephone book for the nearest regional housing office of your provincial government and ask for information on any home purchase assistance plans. Also, be sure to contact the nearest regional office of Canada Mortgage and Housing Corporation. CMHC is the federal government’s housing agency charged with administration of the National Housing Act. It is a good source of information on government-insured loans and other matters that affect the home owner, such as renovation loans. Ask for a copy of the current information package.
Choosing the Right Home
You’ve made the decision to buy, and you’re on your way to getting together the down payment. Now is the time to put together your own checklist for what you want in a home. Make a list of your needs and check it against available housing in your area. Once you have your checklist in hand, a price range in mind, and a fairly firm idea of when you will have your down payment ready, you can go out and actually start looking at properties for sale.
The Home Checklist
Here are some points to consider when preparing your personalized checklist of home features.
1. Type of Home
* Do you prefer a single-family detached house? A semi-detached or duplex? A townhouse? An apartment? A mobile home? A condominium?
* Do you prefer a new home or an older house?
2. Type of Ownership
* Do you want to own the home and land?
* Do you prefer condominium ownership (where you own the unit in which you live and share in the common elements, such as hallways, elevators, and perhaps the land)?
* Do you like the idea of co-operative ownership (where you own a share in the co-operative corporation which owns the land and buildings, which gives you the right to live in one housing unit)?
3. Location of Home
* What kind of neighbourhood do you prefer – downtown? Suburban? Older? Newer?
* What do you need in your neighbourhood? Do you need to be close to schools, public transportation, libraries, shopping areas, recreational facilities, your place of work, your religious and/or social center? Are police and fire protection facilities available?
* What quality of neighbourhood do you want?
Strictly residential? What level of traffic noise are you willing to accept? Is there industrial development nearby and if so, are you prepared to live with it? Do you want a well settled neighbourhood that is unlikely to change? For example, are there plans to build high-rise apartments nearby and, if so, does it matter to you? Does zoning protect property values?
4. Interior of Home
* How big must your home be? How many bedrooms and bathrooms do you need? Does it have to be air conditioned?
* Do you need an eat-in kitchen? Do you want a basement for storage or a rough work area?
* What property condition are you willing to accept? Are you handy with tools and willing to make repairs? (If not, avoid properties listed as “handyman’s special” or “renovator’s dream”).
* Are you willing to upgrade the wiring, add insulation, replace the roof, or renovate to make the floor plan more suitable for your needs? Or do you want a house that is ready for you to live in, except perhaps for some minor redecorating?
* How much will these repairs, renovations, or redecorations cost? (Here is where the fee for the services of an independent building inspector can be of enormous help. Be sure that you know, for example, whether the wiring in an older home has to be brought up to standard and how much the job will cost before you make the commitment to purchase).
There is no easy way to find the right home at the right price. It takes time. Don’t rush yourself, and don’t allow yourself to be rushed. Become familiar with the different neighbuorhoods in your area. Read real estate ads regularly. Get in touch with a real estate agent.
Be clear in your own mind about what you must have and on which points you are willing to compromise.
Make sure that the real estate agent understands your requirements clearly, too.
If you’re interested in a new home, perhaps still under construction, check into the reputation of the builder.
In many provinces, there are new home warranty programs. Is the builder registered? Is the actual development registered? Ask the sales agent for the name of the builder, the name used for the development, and the development’s registration number. Then call the appropriate provincial government office and find out if the home is covered by a warranty program.
Is the builder a member of the Better Business Bureau? Are there any complaints on record at the BBB, and, if so, how were these complaints dealt with?
If you’re interested in an older home, what is a fair price to pay? What have the other, comparable homes sold for recently? What is the condition of the home you are looking at? What will it cost to bring the home up to standard if there are serious structural problems?
Mansoor Fatollahi Tel: 416-371-0447