Buying Property in Canada
The best time to look is spring and early summer. The real estate markets for houses vary greatly from city to city. The bigger the city, generally, the more expensive the real estate.
How to buy a House
The best sources for information will be classified ads, real estate agencies, friends and neighbours.
In an attempt to avoid fees and commissions some people try to do private sales, but the majority of buying and selling is done through real estate agencies. An agent will show you several houses based on what you have stated to be your price range, desired type of neighbourhood and taste in architecture. Once you decide on a house, you normally make a legal written offer (this includes the deposit) on the condition that the house passes an official inspection of its condition and structure. Usually you will bargain (in writing) with the seller to get the best price you can and once the seller accepts an offer it becomes an agreement to purchase.
Mortgages
Unless you have money to burn, you will probably need to set up a mortgage with a bank or trust company. First you will have to pay a deposit that is ordinarily around 20-25 per cent of the total price. If you are a first-time homebuyer you may qualify for a smaller down-payment of 5-10 per cent. The rest of the purchase is paid in monthly payments including interest. If you put down less than 25 per cent, you have to take out mortgage insurance through your lender, which gets it from the Canada Home Mortgage Corporation. In fact, the CHMC has a programme through which you can put down as little as 5 per cent, but there are limits on the price of the house you wish to buy if you put down 10 per cent or less.
The federal government also has a programme for first time home buyers whereby they can withdraw up to $20,000 from their RRSP (Registered Retirement Savings Plan) towards the cost of building or buying a home. That amount gets paid back into the RRSP, interest free, but has to be repaid within15 years. Any balance remaining is deemed income and taxable in the 16th year. A fixed interest rate for a term of one to five years is the norm. The shorter the term agreed upon, the lower the interest rate, but the greater the uncertainty is regarding future interest rates on agreement renewals. On average most buyers pay for their houses over 15 to 25 years.
What you own
If you hold a freehold estate, you own both the house and the land that it sits upon and only the government has rights to interfere with the land (it must give notice, of course). Most ownership in Canada is freehold. If you own a leasehold estate you own the house but not the land.
Other costs
Your home will have been assessed for property taxes, which you have to pay every year. Such taxes vary from region to region, from property to property. Larger properties have higher property taxes, as do properties occupying corner lots.
As an owner, you are also responsible for the maintenance of the house and appliances within the house. Whether it is a clogged drain, a leaky pipe or a leaky roof, you have to organise and pay for the repairs. There will also be utility costs, such as hydroelectricity, heat and water.
