There's no one "right way" to go about finding a home. But here are a few tips that may make the process a little easier and remove some of the anxiety associated with making what is, for most people, their largest single purchase in life.
There are different ways to find the right home. First, there are many local magazines and brochures dedicated to advertising available properties. Most newspapers also have a real estate section.
Many people in Canada also get in touch with a real estate agent or builder when they are thinking about buying a home. They are trained to help you find a suitable home, and to assist you when you are ready to buy.
The Internet has become an indispensable tool when searching for properties in Canada. The primary website is Multiple Listing Service (MLS). It is run by the Canadian Real Estate Association (CREA) on behalf of member REALTORS© and contains no advertising. Hundreds of thousands of properties can be found there, and it is possible to narrow searches by location, price, type of house, and features.
Most information you will require for each home listing is available on MLS, often including photos or video of the home's exterior and interior. Houses for sale by owner are not listed on MLS but can usually be found through individual websites or by visiting neighbourhoods of interest and looking for lawn signs that typically say 'For sale by owner'.
Types of Housing
There are various types of properties you can buy in Canada. In each case, you are responsible for making the mortgage payments as well as paying the bills for your specific unit. Below is a list of several housing types.
While condominiums are generally found in apartment buildings, other types of properties, for example, townhouses may also have a condo ownership model. You own the unit, or ‘condo,’ but you do not own the land it is built on or any common space outside your unit. You are charged monthly "condo fees" to maintain indoor and outdoor common areas shared by the condo owners, including parking areas, elevators, carpets, front entrances, and any recreation facilities. These monthly fees can vary widely and are in addition to your mortgage payments.
This is a house that stands on its own. It is often referred to as a 'detached' home and tends to be the most expensive type of home to purchase due to the land costs. You own both the house and the land it is on. When your house needs repair or maintenance, you must pay for it yourself. Single houses appeal to a wide array of people, including families with children and generally provide more space and privacy than other unit types.
A townhouse is a unit in a row of other units that look like houses that attached to each other. In each unit, you share a wall on either side with the people who live beside you. Often, especially in cities, there may also be a smaller unit above each townhouse, so there could also be someone living above you or below you. Townhouses (sometimes called row houses) are usually two or three levels tall (each level is called a ‘storey’).
This is a home joined to another on one side. Owners are only responsible for the care and maintenance of their own side, just like a detached house. Owners of semi-detached homes own their side of the property, including the land it is on, and are responsible for its care and maintenance, according to local bylaws. Semi-detached houses appeal to people who want to own their own house as well as the land it is on.
How to Find a Homebuilder or Real Estate Agent
Often, when buying a new home, you'll deal with a builder/contractor. If you're buying a resale home, however, you'll probably encounter a real estate agent. Consider the following questions when looking for a Builder:
How to Find a Builder
What is the builder's reputation?
How long have they been in business?
Is the company a member of an industry organization or association (such as the Canadian Home Builders' Association)?
Are they licensed in the province where you intend to live?
Do they have other developments that you can look at?
Do they have a list of previous clients for you to contact?
Do they offer a warranty? If so, what does their warranty record look like?
How much say do you have on how your home ultimately looks?
How much do they charge for extras?
How to Find a Real Estate Agent
You'll typically rely on a real estate agent to help you through the purchase process on the resale market. Since home buying is complicated, real estate agents can help guide you through much of the paperwork, particularly around initiating and completing a purchase. Your agent can show you various types of properties for sale on the resale market.
Finding a real estate agent to handle your purchase is important. Talk to a few agents with different companies who know the area where you’re looking to buy. A real estate professional can show you homes in your price range in the areas you like that meet your particular needs and budget.
If you're interested in finding a real estate agent in your area, simply go to the Multiple Listing Service (MLS) website (www.mls.ca) and enter the requested information. There are more than 90,000 agents accessible across Canada through MLS.
Down Payment Requirements
For many people, the hardest part of buying a home is saving enough money for a down payment. The bigger the down payment, the smaller the amount of your mortgage loan. If you've arrived in Canada within the last 36 months, you may qualify for Genworth's New To CanadaTM product, which allows you to buy with as little as a 5% down payment.
A down payment of 20% or more of the property will qualify you for a conventional mortgage. If it is less than 20% you will pay for mortgage default insurance. Mortgage default insurance enables buyers with low down payments access to the same competitive mortgage interest rates as buyers with larger down payments. It’s insurance which guarantees the mortgage by protecting the lender should you be unable to make your mortgage payments for unforeseen reasons.
Canada is the largest private sector supplier of mortgage default insurance in Canada. Mortgage default insurance is also available from several other providers in Canada. Your lender will both inform you about, and arrange for, mortgage default insurance.