Reviewed by Mike Kelly
Updated September 2, 2022
You’re ready to buy a house (or at least start thinking about it).
The housing market can be an intimidating place for first-time homebuyers. But it doesn’t have to be!
Once you start looking, you’re bound to find homes for sale that suit your tastes. That’s the easy part—the harder part is trying to figure out which of those suitable homes is the right one.
Never fear! We’ve compiled the important questions and asked Canadian real estate experts for their take, too. Here are the questions you’re going to want answers to:
WATCH ON YOUTUBE – 7:48
It’s first on the list for a reason.
The amount of money you have available (and are willing to spend) is the most important factor when it comes to deciding which home is right for you.
When you’re searching for a home to buy, you should get pre-approved for a mortgage. Having to wait for approval when you’re ready to make an offer might mean someone snatches your dream home out from under you.
Getting pre-approved for a mortgage doesn’t automatically mean you can afford it.
In addition to your down payment and monthly payments, you still need to pay for all the other things in life: groceries, entertainment, gas, retirement savings, and so on, not to mention the non-mortgage costs of home ownership.
Speaking of which, those extra costs come in two varieties: one-time costs you’ll pay at closing time, and ongoing costs you’ll pay for as long as you own the home.
Closing costs are the one-time fees you’ll pay when you “close” on the home, meaning you complete the purchase.
Most experts suggest setting aside three to four percent of the total purchase price for closing costs. So, if you buy a $300,000 home, you should be ready to pay an additional $9,000-12,000 in closing costs.
Closing costs include:
Of course, there are a few other one-time costs that aren’t part of closing. Remember to budget for moving expenses, utility setup costs, as well as planning for any renovations you see yourself needing for your new home.
If you’re used to renting, many of the ongoing costs of homeownership might be new to you.
“It’s important to understand that you may have substantial city taxes in some locales and that some purchases have additional fees like condo fees or homeowners association fees that you have not accounted for,” says real estate investor Andrea Peart-Williams of KEAN Real Estate Group. “This is additional to your principal and interest payments you make to your bank that you may have already accounted for.”
When you’re thinking about purchasing a home, try to estimate the ongoing costs like:
Not a budget question per se, but in order to close on the house in a timely fashion, you’ll need to know that your mortgage provider is responsive to your needs. Whether you use a bank, a mortgage broker, or some other provider, make sure that you can trust them to respond to your questions promptly and they don’t take forever processing documents.
Having a reliable mortgage provider can take a lot of the stress out of the buying process.
We mentioned utilities above as one of the recurring costs, but it deserves a separate mention here. Utilities can vary a lot from house to house, so you should do a little homework to ensure you’re not surprised by the bills after you move in.
Depending on where you live, you might not need all of the above, but make sure you’re aware of what you will need.
The best way to estimate your potential home’s utility costs is to ask the sellers what they pay. You can ask your realtor to request the information from them.
Failing that, you can estimate various utility costs by contacting the providers for each, or using an online calculator for a rough estimate.
This is a big one.
Sellers are required to disclose any defects in the home that they’re aware of, but that protection isn’t perfect.
Having your potential home inspected is extremely important.
“Make sure to ask for an inspection as a condition to your offer so that you have alternatives to ask for the seller to adjust the price, remedy the flaws, or for you to walk away completely if you need to,” says Peart-Williams. “It is important as a buyer to understand what major potential costs can creep up in the first year of buying. If these costs exist at the time of offering you would negotiate the price accordingly to reflect the necessary repairs.”
It may seem quite specific to ask about, but the roof is one of the most important features on a house. An old roof is prone to leaking or even collapsing, and poorly maintained roofs can cause insurance headaches, too.
“Knowing the age of [the roof] can mean the difference of cost in the upcoming year to years,” says Peart-Williams. “If [it has] been recently updated then you are reducing the cost to repair or replace in the near future. For example, a newly completed roof can last 10-15 years before having to replace.”
Replacing a roof is expensive—very expensive. If you know that you’ll need to replace your prospective home’s roof soon, you can reflect that cost in your offer.
You’ll need to be aware of the condition of the home’s heating, electricity, plumbing, and ventilation systems (just to name a few).
“As a new buyer you may not notice the age of appliances such as the washer/dryer, furnace, or water heater,” says Peart-Williams.
It’s also easy to miss dated plumbing or electrical systems, both of which can be potential issues. Older homes might have Poly-B or Kitec plumbing, or a fuse box instead of breaker switches. Both would likely need to be replaced, if only to secure insurance.
That’s why you should make sure you know that your potential home’s systems are up to date.
“These can cost thousands of dollars that a new homeowner will not have to repair anytime in the near future,” says Peart-Williams.
Upgrades can be great! But you have to ensure that any expansions or significant renovations were done properly—another reason to have an inspection done.
Some home sellers do cheap, rushed upgrades before they sell to squeeze some extra dollars out of the sale. While not necessarily common, you do need to be aware of the potential.
If the house has been extensively renovated or upgraded, find out from the seller who did the work. They should be able to provide the name of a contractor or even some building permits, depending on the scope of the work.
On the other hand, quality renovations can add tons of value. Check out our video on which renovations tend to add the most value to your home.
“A property with new improvements means you are buying a move in ready home or turnkey property,” says Peart-Williams. “This also adds value to your purchase and to the property for resale if you decide to sell in the future.”
The most common home heating system in Canada is the forced-air furnace. You might also find homes with radiant floor heating systems, baseboard heating, or fireplaces (or a combination of multiple types).
You need to know which type the home has, and how old it is. Outdated heating systems might make it harder for you to find home insurance, or at least make it more expensive. When a heating system fails, it can cause water pipes to freeze—and a potentially expensive insurance claim.
On top of that, the type and age of your system affects the operating costs.
“The cost of a source of heat varies a lot and typically its best to have a home with gas as the cost to convert from electricity is high,” says Peart-Williams.
In addition to confirming that the water heater and plumbing are in good repair, you also need to note how big the heater is.
If it’s not large enough for your family, you’ll have to budget the cost of buying a larger one—no one likes cold showers.
Check out our complete guide to water heaters.
When you buy a house, you want to be sure that there’s no asbestos or lead paint lurking within. These materials haven’t been used in many years, but they can still be present in older homes.
Sellers are required to disclose most safety hazards in the home (if they’re aware of them), but you still want to be sure that there are no nasty surprises waiting for you in your new home—another reason for a thorough inspection.
You’ll also want to know about any rodent or insect infestation, as well as mould or other moisture-related damage.
If you’re buying a relatively new home (less than 10 years old), it might still be under warranty. When new homes are constructed, they’ll come with a warranty from the builders. It might not affect your decision to buy, but it’s still nice to know that it’s there.
You might have to have the seller transfer the warranty to you, so make sure you know whether or not there’s a warranty on the home.
Even if everything about the house looks perfect, there are some non-physical things that could be wrong with it.
A stigmatized property is one that’s been the site of a worrying event in the past —a murder, a meth lab, or even reports of supernatural activity (if you care about that kind of thing).
Generally, there’s no requirement to disclose this type of information in Canada. So, if you’re wary about living in a “murder house,” you will have to do your research beforehand.
Knowing the insurance claim history of the house is important for two reasons:
The first is that knowing that history gives you an idea of some of the risks your new home might face. A history with a lot of water damage claims would be a red flag, for example. Perhaps the plumbing is defective, or the basement is prone to flooding.
Secondly, knowing the insurance history can help inform your budget. Insurance companies would likely have a record of the home’s past claims, and a problematic history might mean you’d have to pay higher premiums to insure the home than you’d planned.
If there’s anything about the house you don’t like, you can always make some changes after you move in. But you don’t have that option when it comes to the stuff outside the property lines.
Before you decide that a home is right for you, put some effort into finding out about these aspects of the neighbourhood:
Don’t forget to figure out how long it’s going to take you to get to work from your new home. If you’re in a larger city, it’s not a bad idea to do a practice run during your typical commute time. That will help you get an idea of what traffic would be like on your way to work.
Making friends with your neighbours may or may not be something you’re interested in. But even if you don’t plan on socializing, it’s nice to know what sort of neighbours you’d have if you moved into the new home.
Of course, you can try to meet the neighbours by knocking on their doors. If you’re able to get in touch with the sellers directly, you can also ask them what they think of the neighbours (and the neighbourhood in general, for that matter).
Not all natural disasters are avoidable, but it’s possible to find out if your potential new home is at risk from flooding or wildfires, for example.
Flood maps in Canada don’t have the best coverage, but depending on where your home is located you might be able to find a flood map that tells you what the flood risk is like.
If your home is part of a wildland/urban interface (the area where a town or city transitions to natural land), it’s potentially at risk from wildfires. If that’s the case, you just need to ensure that you’ll be able to make the property fire safe if it isn’t already.
Toronto-based realtor Mike Kelly says it’s important to be aware of what the market is like for your target home before you make an offer.
“Number one should be the state of the market and how many offers a typical listing is receiving at the time,” says Kelly. “This is important to know because it will help formulate a strategy to submit an offer and successfully purchase the property.”
The next question follows the same line of reasoning:
In addition to finding out what demand is like for your potential home, you should have an idea of what similar homes in the area have sold for recently.
“A potential red flag for both situations would be an outlier number, either a much higher or lower price,” says Kelly. “Or, many more or less offers having been submitted and how the other listings and recent sales compare to the one that the buyer is looking at.”
Peart-Williams adds: “A new homebuyer does not want to overpay so it is important to know what other homes like the one they are buying sold for. This price or even the last price the house sold for should help guide your offer price.”
A house that’s been up for sale for a long time might have some issues, especially if other homes in the area have been selling quickly.
On the other hand, a house that’s been on the market for a while may be a target for a lower-than-advertised offer. Your realtor can help you decide the best approach based on how long the house has been for sale.
It may seem obvious to a first-time homebuyer, but the details of what you get when you buy the house are sometimes unclear.
Obviously, you get the house and the property it sits on.
But what about light fixtures? Appliances? The hot tub? The sellers might plan to take some or all of these things with them when they leave, so you need to be clear about what extra costs you might incur to replace them.
You may or may not have the chance to speak with the sellers directly, but you can always have your realtor get in contact with them or their realtor.
Having the original blueprints for the home can be incredibly useful, especially if you plan on any extensive renovations or additions.
This is something that your realtor might try to find out anyway. Knowing why the owners are selling can be a valuable negotiation chip.
A motivated seller might be more amenable to accepting a lower offer. Not to mention that finding out why someone’s leaving might tip you off to issues with the home or the neighbourhood.
If you get a chance, finding out what the seller liked about the home and the location can help you decide if the place is right for you. It can also help you discover features of the home or the neighbourhood that you’d otherwise have missed.
If you’ve answered every other question and you’re still on the fence, hearing why the sellers liked their home might be enough to tip the scales.
Want to learn more? Visit our Home Buying, Selling and Moving resource centre for everything you need to know about real estate, buying a home, or moving. Or, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.
About the expert: Mike Kelly
Mike Kelly is no stranger to working under pressure, Mike works hard for his clients in the Toronto real estate market while always maintaining a relaxed, low-stress environment. He builds trust with his clients through open and honest lines of communication.
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