Buying & Selling Process
Buying or selling a property is a major transaction that involves planning and preparation. These articles offer useful information on the process.
The Multiple Listing Service® And Your REALTOR®
Like other professionals, a REALTOR® is as good as the information at his or her disposal.
The Multiple Listing Service® is a co-operative system used by REALTOR® Members of Canada’s real estate boards. It is different than the consumer websites realtor.ca and listings.trebhome.com, which offer a brief description of most properties listed on MLS® Systems across the country and in the Greater Golden Horseshoe.
The Toronto Real Estate Board’s Multiple Listing Service® provides an ongoing inventory of available properties and other related information. With training, experience and access to this database, a REALTOR® can provide invaluable assistance in buying or selling your next resale home.
For sellers, a REALTOR® can use the system to determine a fair listing price by performing a comparative market analysis. This analysis focuses on the geographical location of your property and describes it as accurately as possible. The database can then be searched to reveal comparable sold, active and expired properties, retrieving information such as sold price, list price and average time on the market to help determine a range of fair listing prices. For buyers, a REALTOR® can match your very specific needs to all properties listed.
Your REALTOR® can create a profile outlining your desired price range, location and specific details like the number of bathrooms, bedrooms and fireplaces. For buyers who are geographically focused, your REALTOR® can even search all active listings on a particular street and retrieve all relevant information including property description, a photograph, and assessed value. The system updates nightly, listing all potential properties that meet your particular needs and automatically emailing them to you. In helping you to determine an offer, your REALTOR® can also search specific properties’ historical data such as previous selling prices.
As well, the MLS® System allows REALTORS® to monitor monthly sold statistics to ensure property prices reflect current market conditions. Whether you are a buyer or a seller, the MLS® System supports your REALTOR® in helping you make informed decisions that lead to successful transactions.
The Buyer Representation Agreement
Guaranteeing You the Very Best in Real Estate Service
When it comes to just about every kind of contract, signing on the dotted line makes us all a little bit nervous.
When selling a home, most people are aware they sign a Listing Agreement with a REALTOR®. There is, however, an agreement that REALTORS® ask their home buying clients to sign. It’s an agreement that works in favour of buyers, guaranteeing the very best in real estate service.
The Real Estate Council of Ontario (RECO), a public agency formed to protect consumers and regulate the industry, introduced guiding principles mandating that REALTORS® ask their clients to sign a Written Representation Agreement at the earliest possible time.
When choosing representation, home buyers have the option to sign either a Buyer Representation Agreement or a Buyer Customer Service Agreement.
The Buyer Representation Agreement signifies that for a designated period of time, the buyer has engaged a specific REALTOR® firm to work exclusively on his or her behalf at finding a property. The agreement confirms the REALTOR®’s commitment to make his or her best efforts for the buyer.
By signing the Buyer Customer Service Agreement the buyer acknowledges the Broker has provided him/her with written information explaining agency relationships including Seller Representation, Buyer Representation, Multiple Representation and Customer Service.
For more information on this important subject, call your local REALTOR®. The term REALTOR® is designated to those who have chosen to belong to local, provincial and national real estate associations, agreeing to adhere to a strict code of professional standards that ensures the highest levels of service and integrity. In Toronto, local REALTORS® belong to the Toronto Real Estate Board, Canada’s largest real estate board, serving more than 53,000 Members.
Additional Costs When Buying a Home
The purchase price of your home is only one of the costs you'll encounter. Here are other possible costs you need to consider:
- Mortgage loan insurance:
If you are putting less than 20 per cent of the house value down, you're going to need mortgage loan insurance. Depending on the lender, the premium can be added to mortgage payments. Note: as of January 1st, 2018, the Office of the Superintendent of Financial Institutions Canada (OSFI) is setting a new minimum qualifying rate, or "stress test," for uninsured mortgages (if you are putting more than 20 per cent of the house value down). The guideline, applying to all federally regulated financial institutions, now requires the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada or the contractual mortgage rate plus two percentage points.
- Appraisal fee:
Lenders typically loan a percentage of the home's purchase price or the market appraisal of the property. Cost depends on the size and complexity of the assignment.
- Land survey:
The lender may ask for a current survey or certificate of location before signing off on the loan. There can be a substantial cost for having a new survey done on the property.
A deposit normally goes with the formal offer to purchase.
The lender will require proof of property insurance for the replacement value of the house and its contents from the day you take ownership.
- Title insurance:
Provides coverage in case of problems with the property title, among other things. The cost is relatively low, usually a few hundred dollars.
- Application fee:
Some lenders will pass on the cost to process your application. These fees vary and some lenders will waive them entirely if you have other accounts with them.
- Mortgage broker's fee:
If you use a mortgage broker, a fee may be charged to arrange a mortgage on your behalf.
- Home inspection fee:
An inspection protects the buyer by revealing any problems in the property that you'd want to know before you move in.
- Legal fees:
You can save some of the legal fees usually charged by the lender if your lawyer draws up the mortgage. You'll also pay for disbursements which are the costs involved in drawing up the title deed, conducting a title search, and preparing and registering the mortgage.
- Land Transfer Tax:
Use the land transfer tax calculator accessible from the home page of this website to calculate both your Ontario and City of Toronto (if applicable) land transfer taxes. First-time home buyers qualify for a maximum $4,000 provincial rebate and a maximum $4,475 City of Toronto rebate.
- Harmonized Sales Tax:
Resale (used) homes are exempt from HST but it does apply to newly constructed homes and you may qualify for a partial rebate depending on the sale price and if the home is going to be your primary place of residence.
- Other costs:
These include moving costs, fees charged by utilities for service hook-ups, property tax and other adjustments (an adjustment takes place when the seller has already paid for something in advance and wants to be credited for the unused portion on the date the house becomes yours), and ongoing maintenance (condo fees, etc.), and utility costs.