Should you buy a house or an apartment?

Whether you are a newcomer or not, buying a house is a beautiful, but above all, a significant decision. Once you have carefully considered by asking the right questions (your financial situation, what you are looking for in a type of house, your lifestyle, etc.) and decided, you can finally embark on the adventure. Here are the basics of different steps and things you should know to buy a house in Canada.

Expected Costs

Owning an apartment comes with significant costs:

The pre-cost, which is the amount you need to buy your property. This includes the down payment, closing costs, and applicable taxes.
occupancy costs, which correspond to the money it will cost to occupy the apartment (heating, property taxes, insurance, maintenance, repairs, if applicable, condo fees).
Major repairs, which include renovations and repairs in case of issues (for example, rebuilding a balcony that is at risk of collapsing).

When purchasing, you must also consider agency fees when calling on a real estate agent, a lawyer, a notary, or sometimes working in the apartment.

Buying an apartment: the pros and cons

Certainly, renting has its advantages and disadvantages, but so does buying.

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This allows you to:

own a property that belongs to you and represents a sustainable investment in itself,
be able to rent it out if you do not live there, thus being able to benefit from rental income
transform and restore your home as you wish.

On the other hand, buying includes:

being responsible for all occupancy and repair costs, if any,
possible depreciation of the house or apartment if you want to resell it,
repayment of a mortgage with interest rates that may increase.

Note on non-residents

Under Canadian law, it is quite possible for a non-resident or temporary resident to buy housing in Canada. However, purchasing real estate does not provide permanent access to a residency visa. This way, you will not be able to work or stay longer than your visa allows.

Buying a house: before you start

You must determine the amount you can afford in your situation, taking into account the various costs listed above.

For example, to calculate this amount, you can consult financial experts such as mortgage brokers. You can also perform the calculation yourself on various calculators available online and on the Canada Mortgage and Housing Corporation (CMHC) website, a national housing agency in Canada.

You should also determine your needs (type of apartment, area, number of bedrooms, location, lifestyle, etc.).

Buying housing: the main types of apartments in Canada

Family home

This is a detached apartment. The owner owns the building and the property, if there is one. They are responsible for all costs associated with this space.

Semi-detached house

The plot and entrance are individual, but at least one of the walls adjoins another apartment. The owner is responsible for the costs associated with their part of the property.

Condos or “co-ownership”

The owner owns one or more apartments in a building owned by multiple people. They will then have to pay condo fees to the Condominium Association, which will take care of the repairs and maintenance of the building. This is a fairly affordable option that attracts some people buying their first home.

Duplex, Triplex

This is a building consisting of multiple independent units, often stacked on top of each other (two levels of housing for the duplex and three for the triplex). This purchase allows the owner to have their own individual apartment if they want, but also to rent out others at the same time, thus generating income.

Townhouse

These are row houses, which usually look exactly the same. They are all connected and form long lines. Each person obviously has their individual entrance and possibly their yard, but the walls are often adjacent on both sides.

Buying a house: Search

You can choose to manage or use the services of a real estate agent who can show you various properties based on your needs and budget.

To find a good real estate agent, first ask around, nothing beats networking for something like this. A list of agents can also be found on the Inter-Agency Service (S.I.A.) website or in the pages.

Do not hesitate to disturb those you would like to buy housing from, buyclassified ads from dealers and newspapers online, including the Realtor.ca website.

Feel free to visit all the apartments that meet your criteria so that you can then compare and make your choice. Ensure that the housing is safe, that the premises are in good condition (floor, ceiling, plumbing, etc.), that nothing is broken, and that the various appliances work well.

Once you have found your dream home

The purchase offer

It can be prepared by your real estate agent or, if you do not have one (direct sale), with the help of a lawyer (or a notary in Quebec). In fact, it is a legal document, and the help of a professional is more than advisable to properly write the offer before submitting it to the seller.

If accepted, the lawyer (or notary) will also take care of the transfer of ownership to your name.

You can also request a home inspection by an expert. Obviously, the purchase price can be negotiated if, for example, work is needed. Conversely, the seller can also revise your offer upwards by asking for more information.

Financing the purchase

The bank loan

Generally, buyers will need to pay this loan to purchase their home. It can be obtained from a bank or another financial institution (credit union, insurance company, savings and credit union, etc.). To do this, you will need to make regular payments over a set period. Obviously, interest is applied to this loan.

To obtain a bank loan, you will be asked for a credit history. This allows Canadian banks to decide whether they want to grant you the loan or not. This step, of course, will be more difficult (but not impossible) if you are a temporary resident or a newcomer. Once you have submitted your credit application, it will take about 24 to 48 hours to receive a response.

Financial assistance

In Canada, it is possible to benefit from some financial assistance when buying your home. There are also solutions to help you when purchasing a home (TFSA and HBP).

Useful websites to assist you in your purchasing process