Here at Sutton-Select we are proud to be a back-to-back winner of the Best of London award for the top real estate brokerage in London! The Sutton - Select home buyers' team of over 125 agents is a dynamic blend of expertise and enthusiasm committed to customer satisfaction and supreme service. When you enter into a Buyer Agency Agreement with a Sutton - Select Realtor®, you will have access to all of the hottest new properties for sale on MLS, Realtor.ca, and our own exclusive listings in the greater London area and all of Canada, as well as power of sale/ foreclosure properties. Our professional Realtors® provide free advice on:

• Home Inspections
• Title Insurance
• Government programs and incentives
• Financing and Rates
• Use of our in-house mortgage broker

HOME SWEET HOME

A home is more often than not, ones greatest expense in life. It where we spend the majority of our time and becomes our pride. Buying a home enables us to have full customization-worry free of landlord's controlling what we can and cannot do to our place. A home provides comfort, security, and is the greatest investment one can make.

THE BEST STOCK MARKET

Canada, especially as of late has seen homes appreciate substantially in the last few years. This is the perk of purchasing a home, you get to see your net worth grow. It is a physical investment, unlike stocks or bonds. You are in control. It should also be noted that in Canada principal residences are exempted from capital tax gains

BUILDING EQUITY

By paying a mortgage, part of that payment is utilized towards your principal balance of your home alone. Therefore instead of watching your rent money empty your pockets, you can buy a home and pay your mortgage and see some of your money come back to you. It is the best savings plan there is as you get to enjoy the comfort and security of your savings plan while saving.

DECIDING IF YOU ARE READY TO BUY

Buying a home is a huge financial commitment, and you first must evaluate if you have the resources to make such a purchase. If you have your money tied into other commitments, maybe a home isn't something you should be looking for just yet. It is recommended that at least 5-10% be saved for a down payment, but ideally more. The more you can put down at the start, the better off you are. Another thing to take into consideration before buying a home is your lifestyle. What type of career do you have? Will you be travelling lots? Is this home going to be a place you are planning on staying in for some time? Buying a home is very expensive, and other factors are added on top- such as moving expenses. These are additional expenses that you do not want to deal with frequently, and if your life is not yet completely stable, maybe a home is not yet your best option.

FEATURES TO KEEP IN MIND WHEN LOOKING AT HOMES

• How many bedrooms and bathrooms do I need?
• Do I need a garage? One-car? Two-Car?
• Will I need bedrooms for children?
• Where is the home located? Is it convenient for my job and lifestyle? Will friends and family be close by?
• Is it a noisy neighborhood?
• Are bus routes close by? Schools? Libraries? Parks?
• Will the home require any improvements?
• Do I need to replace the appliances?
• How much are property taxes?
• What do monthly bills cost on average?
• Is it a high crime area?
• What is the economic outlook of the area?

HOME PURCHASE EXPENSES

• Deposit
• Down payment
• Legal Fees
• Taxes
• Home Inspection
• Service and Utility Hook-up expenses
• Renovations
• Moving Expenses
• Appraisal Fee
• Water Quality and Quantity
• Condominium Fees
• Property Tax
• Mortgage expenses
• Land Transfer Tax
• Property Insurance
• Mortgage Loan Insurance

After reading this you should have an idea of what goes into buying your first home. The expenses listed above are the major expenses, but definitely not all of the expenses that you may face. Don't be overwhelmed by it all- embrace it, as this will be the greatest purchase you ever make! If you would like to take the next step, check out our choosing a REALTOR post, or you can fill out this form and we will have an agent contact you within 24 hours.

Below are a few quick tasks to undertake when buying your next home.

• Find a REALTOR® at Sutton Group - Select Realty Inc.
• Determine which area of the city you would like to live in
• Think about what features are essentials in your new home (size of garage, bedrooms, bathrooms, pool, etc.)
• Based on the amount of money you have saved, calculate what you can afford
• Figure out your monthly budget for mortgage payments
• Consider other monthly expenses that will incur with being a home owner
• Get a mortgage pre-approval
• Find a lawyer to take care of legalities
• Make plans to set up property insurance for after you have made your purchase

This checklist should get you on your way to purchasing your next home and for some other helpful links be sure to check out our article on making an offer and preparing for the big move.

Unless you are an independently wealthy individual, it is likely that you will require a mortgage to cover a proportion of the cost of your dream property. As well, there are onetime costs associated with home purchases as well as ongoing monthly costs. All must be factored in to the calculation of what you can afford.

Here is a breakdown of the costs of buying a home:

Initial One-Time Costs:

• Down Payment
• Legal Fees
• Land Transfer Tax
• Title Insurance
• Inspection Fees

You must also budget for Ongoing Monthly Costs:

• Mortgage payments
• Utilities
• Maintenance expenses
• Insurance premiums
• Property Taxes

Mortgage Calculations

Financial institutions generally determine loan amounts based on two lending principals. These are the Gross Debt Service Ratio (GDSR) and the Total Debt Service Ratio (TDSR).

Gross Debt Service Ratio (GDSR) calculation:

Your monthly housing cost should not exceed 32% of your gross monthly family income.

Total Debt Service Ratio (TDSR) calculation:

Your monthly housing cost and payments on all of your other debts (including loans, credit cards and lease payments) should not exceed 40% of your gross monthly income.

Be sure to be brutally honest when calculating your Total Debt Service Ratio by including every monthly payment you owe. Buying beyond your means will only spell heartache in the future. Only dream as big as your budget will allow!

Our handy mortgage calculator will help in this process but even better, why not get pre-approved using one of our on-site Mortgage Brokers.

What is a Buyer Representation Agreement and should I sign one?

The Buyer Representation Agreement is a contract that was designed to protect the buyer's best interests. Sellers have a listing contract that protect their interests. Recognizing the need to protect consumers, The Real Estate Council of Ontario (RECO), has mandated under their guiding principles that REALTORS® ask their clients to sign a Representation Agreement at the earliest possible time. The agreement signifies that the REALTORS® is committed and obligated to make his or her best efforts for the buyer.

How does a buyer know if a property is listed at a fair price?

One of the advantages of using a licensed REALTOR® is their access to comparable recent sales in the neighbourhood, which will help determine the true market value or whether a listing is overpriced.

How is the offer price determined?

There are a number of important factors including competing offers, amount of time the property has been on the market and a determination of comparative market value based on comparable properties sold. Data from properties that were listed but did not sell is also valuable as generally those properties were overpriced. Your REALTOR® will recommend a starting offer price that will begin the negotiation process. It is not uncommon for the process to involve one or more 'counter offers' or sign backs, until an agreed-upon price is reached.

What happens when there are multiple offers on a property?

If multiple offers are received on a listed property, there often follows a 'bidding war'. This means that several parties are interested, and more than likely the final selling price will be elevated from what it would have been if there were only a single offer, and it is not uncommon to go above the listed price. If you must compete with other buyers, be prepared to pay more and perhaps to be disappointed. There will be only one successful buyer and the vendor will consider price, conditions in the offer, closing date, etc. to determine which one is most advantageous.

What is a conditional offer?

A condition inserted into the offer means that the contract will not be firm and binding until certain things are fulfilled or waived. These include conditions related to financing, home inspections, the sale of your current property, etc. Conditional offers are considered less desirable than firm offers, but they are no less valid. It is important that your interests be protected. If you are able to sell your home in advance of purchasing, thereby eliminating the need for a condition related to the sale of a property, you will have a stronger negotiating advantage

Is a home inspection required?

It is good practice to include a condition in the offer to purchase that allows the purchaser to arrange for a home inspection, if the seller has not had one recently completed. Should there be serious deficiencies, it provides a means to terminate the offer.

What is the typical closing time frame?

Most closings are from 30-60 days from the date of acceptance of the offer. Some sellers, particularly those whose properties are vacant, are generally looking for shorter closing dates, whereas families that may require more time to settle their children in new school districts may be looking for closings that coincide with summer vacation or winter or spring breaks.

What is the usual deposit on an offer to purchase?

Offer deposits are generally 5% of the offer price, rounded up. The larger the deposit, the more serious and confident you are seen to be to prospective sellers. This can be particularly advantageous if there are multiple offers.

Where is the offer deposit held?

Your deposit is held in the listing brokerage's trust account until closing. At that time, it will be applied towards the purchase price of the property. If an interest bearing clause was part of your original offer, you may be entitled to the interest accrued on the deposit once the property has closed. If the offer is unsuccessful, the deposit is returned to you.

What is a Power of Sale property?

Sometimes homes are listed as 'Power of sale', which means the mortgage holder has obtained the right to sell the home and retain the proceeds when a mortgage is in default. These homes are listed at current market value, athough there may be a little more opportunity to negotiate.

What is an SPIS?

An SPIS is a Seller Property Information Statement. It is an optional form that sellers can fill out when listing their homes. The seller warrants as to certain information pertaining to their home, such as their knowledge of any structural problems, details on mechanical systems and upgrades etc. If you are interested in a specific property, be sure to ask if an SPIS is available.