8 Steps to Buying a Home

Your Housing Requirements

Save time, disappointment and maybe even money. Work out exactly what your needs are before you start home hunting.

Getting Started

For most Canadians, owning their own home is a life-long dream. It brings with it pride of ownership, security and the feeling of control over which improvements are made and how much they cost. There’s also the chance your home will increase in value, making it a sound financial as well as a lifestyle investment.

Location — Style — Cost

When buying a home, you have to juggle three important factors — your prospective home’s location, style and cost. For example, your goal may be to buy a single family detached home in an urban neighbourhood for $100,000. But you may have to settle for two out of three. An urban semi-detached home may be available for your price, or you may need to look in the suburbs for the price and style you want.

Location, Location, Location

Your choice of location depends primarily on where you work and whether you want to commute, and also on your family lifestyle.

Do you want to live near recreation facilities such as a golf course or skating rink? How close are your children’s schools? Is public transportation available?

Location is an investment too.

Urban living usually offers the largest range of home styles and often is closer to amenities such as restaurants and theatres. On the other hand, you may get more for your money in the suburbs.

Suburban homes often have larger lots and larger square footage than urban homes in the same price range.

While suburban homes can have the advantage of being newer, amenities like shopping or playgrounds may not be available yet in a new subdivision.

If you’re considering moving to an unfamiliar neighbourhood, take time to drive or walk around it, both during the day and in the evening. Make some notes. It’s also a good idea to travel the route to and from your work.

There are many other factors you should consider when choosing the location of your home. For example, have property values risen or fallen in the neighbourhood?

Future development can also affect property values and property taxes, so you’ll want to consider whether there are any changes to zoning proposed or any major developments planned.

To do this, contact the local municipal office regarding planning and zoning bylaws. Is a highrise office tower going in next to your home? A new highway? Zoning bylaws may also affect your own plans, such as conducting a business from your home.

Some real estate representatives suggest that, if you’re considering the future resale value of your home, it’s wiser to buy a modest home in the best neighbourhood you can afford than the most expensive home in a modest neighbourhood.

When considering your move, you may want to identify neighbourhood features that benefit you and the environment. Your Next Move provides a helpful checklist to compare the advantages of various neighbourhoods.

How close to home are the services you need?

• Transportation
• Work
• Doctor/dentist
• Places of worship
• Shopping
• Police department
• Hospital
• Schools
• Fire department
• Recreation

2.5 km? 5 km? 7.5 km? 10 km?

Think about what kind of house you want:

Single family detached
A free-standing home which sits on its own lot and is occupied by only one family.

Semi-detached
A single family home that is joined to another one by a common wall.

Duplex
Two units, one above the other. The owner may live in one unit and rent the other.

Row or townhouse
One of several single family homes joined by common walls. These can be condominium or freehold units.

Link or carriage
Houses, freehold or condominium, joined by garages or carports which provide access between the front and rear yards. Builders sometimes join basement walls so that link houses appear to be single family homes on small lots.

Highrise condominium
Multi-story residential building containing condominium units. A condominium is not a type of house but a form of ownership.

Mobile or manufactured
A factory-built, single family dwelling that is transported to your chosen location and placed on a foundation.

New or Resale

There are advantages and disadvantages to both new and resale homes. Here are some of the characteristics of both that may help you make your choice.

New Home

Advantages:

• You may be able to upgrade or choose certain items such as siding, finish materials, flooring, cabinets, plumbing and electrical fixtures.
• The latest building code, electrical and energy-efficiency standards will apply. A builder warranty is usually available in all provinces and the Yukon (but not the Northwest Territories). This can be important if a major system, such as plumbing or heating, breaks down.
• Unless you are a builder, warranties do not apply to homes you build yourself.
• There may also be incentives provided by the provinces and prospective borrowers should consult provincial or local authorities in this regard.

Disadvantages:

• Neighbourhood amenities, like schools or shopping, may not be complete if the house is in a new development.
• There may be construction noise and traffic.
• There may be little to no landscaping or trees.
• The 7% GST applies to new housing. However, there is a rebate, to a maximum of 2.5%, on homes which cost less than $450,000. In some provinces, the GST has been replaced by a Harmonized Federal and Provincial Sales Tax known as the HST.

When purchasing a new home, make sure you ask your builder for a Homeowner’s Manual. Customized for your home, the Homeowner’s Manual is your permanent reference tool that provides practical tips and instructions for the upkeep of every aspect of your home as well as warranty information and a maintenance calendar.

Resale Home

Advantages:

• It will probably be in an established neighbourhood.
• Landscaping is usually done and fencing installed.
• It may have upgrades such as a built-in swimming pool or finished basement.
• There is no GST unless the house has been renovated substantially, and then the tax is applied as if it were a new house.

Disadvantages:

• Maintenance costs will likely be higher than for a new house.
• You may require a professional home inspector to check for structural or other problems, such as a leaky basement or faulty roof.
• You may need to redecorate, or even renovate.

The Homeowner’s Inspection Checklist is a practical, easy-to-follow guide that will assist you in identifying symptoms, causes and cures to common household problems.

Home Hunting Worksheet

When you look at more than a few houses in a day, the special features can get blurred together:

Did the tidy little green house have the skylights or did it have the fireplace in the family room?

The Home Hunting Worksheet is a valuable tool to help you evaluate the details of each of the homes you view.

Don’t fill out a worksheet for every home you see — just those you’re seriously considering. This worksheet will assist your memory and keep home features distinct.

Here are a few points to consider:

• Exterior condition
  Look at the condition of the roof, eavestroughing, brick, mortar, paint, siding, decks and patios.
• Energy efficiency
  What type of heating and insulation does the home have? Is the entire house insulated?
• Air quality
  Does the house smell clean and fresh? Check for conditions and materials which will maintain a healthy indoor environment.
• Basement / crawlspace conditions
  Is it moldy? Look for water stains, leaks or cracks.
• Structural problems
  Doors and windows that stick and uneven floors can indicate problems.
• Test the water pressure
  Turn on the taps or flush the toilet.
• Is there parking?
  Does the home have a private or shared driveway?

Style

When trying to decide what style of home to buy, it’s a good idea to draw up a master list of all the features you want your new home to have. The Home Features Checklist can help you. Try to be honest about what you’re looking for. Your vision will likely change based on what’s available.

This may not be the dream home you’d buy if you won the lottery, but rather the home that you and your family can afford now and that will meet your needs for the next few years. Buying a home involves many financial considerations. Step 3: Calculate Your Costs will help you determine exactly how much house you can afford.

Make a list of all the features you want in your new home. Be realistic and consider all the options. Consider such questions as: Are you starting a family or having more children? How many bedrooms will you need? Will a home office be required?

Sarah and Albert set priorities in choosing their new home.

Sarah and Albert wanted to buy a small home in Ottawa, as an investment and for the personal freedom it offered. In order to maximize their resources, they made some hard decisions about which features were essential and which were negotiable.

A deck, for example, didn't have to be there. It could be easily built later. But proximity to public transportation was a must. Being as practical and realistic as possible, Sarah and Albert managed to find a home with which they were very happy. And one that could expand should their needs change.

When considering your move, you may want to identify neighbourhood features that benefit you and the environment. Your Next Move provides a helpful checklist to compare the advantages of various neighbourhoods.

If you think you’ll need more space, consider buying a larger home now or one with the potential for renovation or an addition. To learn more about adaptable housing, see the FlexHousing portion of our Web site.

Consider compiling this list with the help of your real estate representative or builder, who can help you decide which features are important and suggest ones you have overlooked. The section on Choosing Your Team provides helpful suggestions for selecting a real estate representative.

Make sure your real estate representative keeps a copy of your list to help pre-screen the houses you’ll look at. This list should be revised as you look at houses and see what is actually available in your price range and preferred locations.

Cost

Read how Diane and Hugh chose a home to meet their needs.

Diane and Hugh were moving to Calgary and saw this as an opportunity to buy a home before they started their family. Their dream was a home with four bedrooms, a family room, a big yard and a preferred location.

The reality was that they couldn't balance that home and that location with their budget. Then a real estate representative helped them find a smaller house that they could afford in an ideal neighbourhood. They accepted less home than they had hoped for, but stayed within an affordable budget. Those extra rooms could come later.

A note on buying condominiums

The word condominium refers to a type of property ownership rather than to a style of house.

• Condominiums can be townhouses, high-rises or low-rises. They can be attractive to first-time home buyers because they are generally less expensive than single detached homes in the same neighbourhood. When comparing costs, make sure to include monthly condominium fees.
• When you buy a condominium, you’re investing in something you own, but likely eliminating maintenance such as yard work and snow removal. Condominiums also can offer extras you won’t get in a similarly priced detached home, such as security systems and recreation facilities.
• Be prepared to pay monthly condominium fees that contribute to the corporation’s reserve fund and go toward covering the collective cost of property maintenance, repairs, replacements and insurance.
• When buying a condominium, many of the same considerations as buying a detached home will apply. For example, the choice of location or the decision between new and resale.
• With a new condominium, you may be able to specify upgrades or finish materials, while a resale condominium is more likely to be in an established location and may have lower condominium fees.

Before you buy a condominium, it’s also important to consider some of their limitations. If a large yard is important to you, for example, a condominium is not a good choice.