Buying Real Estate

Buying property in Canada follows a structured sequence from financial preparation to legal closing.

1. Financial Preparation & Eligibility

• Verify Eligibility: Non-citizens must check if they are exempt from the foreign homebuyer ban (in effect until January 1, 2027).

• Save for a Down Payment: The minimum for residents is 5% for homes up to $500,000. Newcomers or non-residents often require 35%.

• Check Credit Score: Lenders typically look for a score of 700+ to approve the best mortgage rates.

• Explore Grants: First-time buyers may qualify for the Home Buyers' Plan (HBP) to withdraw up to $60,000 from RRSPs or use a First Home Savings Account (FHSA). 

2. Pre-Approval & Hiring Professionals

• Get Mortgage Pre-Approval: This locks in an interest rate for 60–130 days and confirms your maximum budget.

• Find a Realtor: A licensed real estate agent assists with searching, touring, and negotiating. In Canada, the seller typically pays the realtor's commission.

• Hire a Lawyer/Notary: Necessary for performing title searches, verifying liens, and handling the legal transfer of funds. 

3. Searching & Making an Offer

• Property Search: Use Realtor.ca to find listings. Conduct tours to check structural conditions and neighbourhood amenities.

• Submit an Offer: Your agent drafts an Agreement of Purchase and Sale. It often includes "conditions" such as passing a home inspection or securing final financing.

• Pay the Deposit: Once the offer is accepted, a deposit (usually ~5%) is held in trust until closing. 

4. Due Diligence

• Home Inspection: A professional assesses the home's structure and systems (plumbing, electrical, etc.) to identify potential repairs.

• Appraisal: The lender orders an appraisal to ensure the home's market value supports the loan amount. 

5. Closing the Deal

• Finalize Insurance: Lenders require home/fire insurance to be active starting on the possession date.

• Sign Legal Documents: Meet with your lawyer to sign the mortgage agreement and title transfer documents.

• Transfer Funds: You must provide the remaining down payment and closing costs (1.5%–4% of the price) to your lawyer.

• Key Exchange: On the closing day, the lawyer registers the title, transfers funds to the seller, and hands you the keys.