If you have decided to buy a house with your partner, you would have also decided the locality that you want your house to be in, the number of bedrooms in the residence and whether a walk-in closet is a mandate or not? However, to buy a home in Canada, these aspects do not suffice as vitals. There’s sadly a lot more than choosing your favorites and shifting. Also, it turns out that first home buying with a partner can be a roller coaster if the research is not in place.
In case you two have made up your mind to buy a home. This will be one of the biggest financial decisions that can take a drastic turn in a jiffy without proper knowledge of Canada’s real estate market. Since we live in unprecedented times, home viewing guidelines are also applicable in Canada. However, now could possibly be the best chance to get into property investment for a first time buyer.
As per the data from the Canadian Real Estate Association (CREA), the home sale went down by over 50% in comparison to the previous year. Thus, having fewer buyers on the field could mean that there is less competition for first time home buyers.
If you are an experienced real estate player or a first-time home buyer. Now could be the best time to invest in homes. These tips will help you have a smooth home buying with your partner in Canada.
Plan More than Just the Deposit Money
This comes as no surprise that a huge sum of money is required to buy a home and that a major portion of the savings done is for the deposit money. But one should keep aside a certain amount of money to cover all the closing costs. Keep this extra cash saved so that as a first-time home buyer you are not in trouble while signing the contract.
Acquire a Pre-approved Loan
Getting you and your partner pre-approved means that a lender has checked your credit value and approved a specific loan amount for your profile. Though the tasks involved could be a little daunting, it helps you in keeping a check on your mortgage payments and understanding the upper limit of loan that you can get approval for.
Work with a Realtor
You and your partner can both go on a house hunt, negotiate an offer, and sign a contract all by yourself but carrying out this process through a realtor saves a lot of your time and effort. It is their job to get you the desired home, the best deals possible and save your brainstorming on the legal jargon mentioned in the contract.
First Time Home Buyer Incentives in Canada
Though first home buying is one of the biggest financial decisions for you and your partner. There are some ways that can help you save some money. You can check the list of first-time home buyer incentives offered in Canada. The Home Buyer’s Plan which lets the first-time home buyers take out upto $35,000 from the RRSP for making the down payment. Also, the $5,000 Home Buyer’s Amount and the HST/GST New Housing Rebate.
Purchasing a Condo Is Different from Buying a House
Not only the monthly mortgage payments, the first-time homebuyers or seasoned buyers have to pay the condo fees as well. This amount is taken to cover the cost of maintaining the condo and its common areas like the gym, pool, and sauna.
Question the Right Things
What is the reason for the seller’s shift? What all elements are included in the purchase? How old is the terrace? How are the neighbors? When you ask the right questions, you will get to know whether you are making a competitive offer for the home or not.
Keep Your Emotions at Bay
When you let yourself get emotionally attached to the home, the fear of missing out can always come in. In the real estate markets of Vancouver and Toronto, this is quite common as there are always multiple offers. The buyers who are emotional will tend to more than other buyers while the important aspects of home buying take a back seat. So, when both of you decide to get a home, keep your emotions aside and you will thank yourself later.
Home Inspection is a Must
When you have made an offer which is before finalizing it, do not forget to hire a home inspector. The potential of the house you are moving in will be examined by the inspector and the conditions of the house like roof, plumbing, and a lot more. Thus, you will make a better decision before stepping into the field.
The Option to Renegotiate is Always Open
There is no home that is perfect, the home inspector will point out a few issues in the structure. If there are certain problems that need to be fixed. You can talk to the seller to fix them or renegotiate the same. You can also ask the seller to cover your closing costs.
The Question about the Property Title
The divergence of marriage law and common law is quite sharp in this aspect. When you are married, you are automatically the owner of 50% of the value of the house, even if you are not listed as an owner. However, with cohabitation couples, the situation is different. Thus, it becomes important for both the partners to co-own the property, even if the finances are not equal. If only one of the partners is mentioned as the owner. The financial contributions made by the other partner will be considered as rent.
Sign a Cohabitation Agreement
A cohabitation agreement is documented legally for a couple who are not married but want to own a property. Live together while keeping intact their individual assets in case of a split. This agreement also mentions how the utility bills, taxes and other costs will be handled between the couple. In order to be valid, the cohabitation agreement should be completely fair.
What happens in case of a split?
In the cohabitation agreement, there should be a clear mention of how the value of the home will be divided in a case of a split or if one of the cohabitant owners passes away.
It does not matter how prepared you are for stepping into your new home. The legalities involved for an unmarried couple owning a property should be considered well. Prepare yourself by saving money for buying the home. Look for the first time home buyer benefits if you are one, and keep a track of all your expenses.