You’ve decided that it’s time to start taking the steps to purchase a home in Toronto. Being a homeowner comes with plenty of benefits as homes typically increase in value, build equity, and provide a nest egg for the future. Purchasing a home is likely going to be the biggest investment you’ve ever made and just like any other big decision, the more you know and educate yourself, the better the decision you can make. As a first-time buyer in Toronto, there’s a lot to learn.
Let’s start by going over 7 important steps you will need to take to achieve your goal of buying a house or condo in Toronto.

Step 1 – Get Pre-Qualified for a Mortgage
Unless you have all the necessary funds required to purchase a property, you will require a mortgage from a lender. The first step to buying a house or condo is to obtain a pre-approval from your bank or mortgage broker. When you obtain a pre-approval, you will find out how much your lender is willing to lend you. The lender will review a mortgage application and analyze your credit history, income and debts and establish the maximum loan amount for which you qualify. Your pre-approval should be in writing and will include a guaranteed interest rate which is held for a specified amount of time (Usually 90-120 days).  A pre-approval is an essential first step to take as it will set the budget parameters for you which allows you to target properties and neighbourhoods that you can afford.

Step 2 – Create Your Wish List
After you’ve established your budget, it’s time to sit down and think about what’s important to you in a property. Without an unlimited budget, there will have to be some concessions made. Think about your must-haves, your nice-to-haves, and potential deal-breakers. What neighbourhoods appeal to you? What about finishes; are you looking for a move-in ready home or are you willing to put in the time and money required to renovate? How many bedrooms and washrooms do you require? Is outdoor space important to you?

Step 3 – Pick your team
Buying a home will likely be the largest purchase you will ever make. With so much money on the line, it’s very important to surround yourself with a strong team of professionals who can guide you through the process. You’ll need a lender who can walk you through your financing options and help you secure a favourable mortgage. You’ll need a great Toronto real estate agent who represents you and guides you through the home buying process. You’ll also need a real estate lawyer to help with the legal aspects of the purchase.  

Step 4 – House Hunting
Once you have been pre-qualified for a mortgage, put together your property wish list and choose your Toronto real estate agent, you can now begin searching for your new home. Your home search will likely begin by looking through MLS listings online. Your real estate agent should also set you up on a daily Toronto property listing email system which will send you new listings for the day based on your wish list. Once you have identified your properties of interest it’s time to have your real estate agent book property viewings for you. The search for the perfect property is on! Take this time to closely evaluate the different neighbourhoods that you are considering and to fine-tune your wish list. The search continues until you find the property that is right for you.
Step 5 – Make an Offer
Your efforts up to this point have paid off and you have found a home that ticks off most of the boxes on your wish list. You are now ready to make an offer. Your real estate agent will draft an offer for you on an Agreement of Purchase and Sale (APS). The APS is a legally binding document which outlines all the terms and conditions of your offer. Your offer will include the purchase price, deposit amount, closing date (possession date), the inclusions (washer, dryer, fridge etc.), conditions to be fulfilled (home inspection, financing, etc.). Once the seller has reviewed your offer, they have the option to accept the offer, send back a counteroffer or reject the offer. A good real estate agent will use their experience to guide you through the negotiation and work hard to secure the property for you with favourable terms and conditions.

Step 6 – Provide Deposit and Meet Conditions
Congrats, your offer has been accepted! Your next step is to pay the deposit as outlined in the terms of the APS. The deposit amount is negotiable; however, you should be prepared to pay up to 5% of the purchase price. Your deposit is then held in a real estate brokerages trust account until closing. Conditions are requirements in your offer that must be fulfilled for your purchase to be completed. Your offer may include conditions such as a home inspection condition, legal review, or a financing condition.  Once these conditions have been satisfied your agreement becomes firm.

Step 7 – Close the Deal
Closing day is when you officially become a Toronto homeowner. Closing occurs when the legal ownership of the property is transferred to you from the seller. All the legal and financial obligations of the deal will have to be met for you to close on the sale. You will rely on the help and expertise of your lender and lawyer to ensure that you have a smooth closing on your property.