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Originally posted by sarmaalo

-Rent cost and mortgage payment cost varies somewhere between 25-30%. With a little bit of effort and very good planning you can buy house instead of wasting the money in rest. I was paying rent of $1100 x 12 = $13200 per year which was almost one fourth of my salary.
-Treat it as investment and think having a fixed shelter on your head as bonus. You should be willing to sell it after some years to go for a better house or move to a place near to your job location. But buy something now to start saving right away.

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I came across this interesting step by step information from website bytheowner dot com http://bytheowner.com/search.php?topic=offertopurchase which could be educative for a new buyer ........ Its your investment and you must have knowledge about how things proceed .... I am pasting the following from the website for common benefit of prospective readers ......

01
Call the owner and visit the property

A01.

Be sure to ask the owner lots of questions and do a through review of the property. If you are interested, discuss price, closing date, and conditions with the owner.
ByTheOwner.com recommends always having your real estate lawyer review anything before you sign, so the first step in making an offer is to consult your real estate lawyer. After deciding that you would like tomake an offer on the property, you will need to get the following information from the seller: Sellers Names, Property Address, closingdate, conditions, chattels included and excluded…

All questions regarding the offer to purchase should be forwarded to your lawyer.
02
When a seller is presented with an offer, 3 possibilities are available

A02.

1. Accept the offer.
2. Reject the offer.
3. Make a counter offer.
03
Offer to Purchase

A03.

* Will contain the legal names of the purchaser and seller.
* Will contain the legal address of the property.
* Will contain the amount of the deposit and the amount to be paid on closing – paid in trust to the seller’s lawyer.
* Will contain what is included (chattels) – i.e. fridge, stove, washer and dryer, fixtures.
* Will contain what is excluded – i.e. satelite dish, wood stove, ...
* Will include any rental items – i.e. hot water heater.
* Will include an irrevocability date – this is the date and exact time that the offer will expire if not accepted.
* Will include a completion date – this is the date that the contract will be filled.
* Will include conditions.

04
Some popular conditions are

A04.

Conditional on financing – This allows the buyer time to arrange a mortgage or collect the money to be paid. One week is usually ideal for a buyer to find a mortgage. If they have not received approval for the money within the stated time period, then the contract is void and your home is back on the market. If the buyer receives financing before the week ends, then the buyer waives this clause and the contract is still valid. The buyer gives a written waiver to their lawyer and the buyer’s lawyer sends it to the seller’s lawyer.

Conditional on home inspection – This allows the buyer time to have a home inspector come and evaluate the home. One week is usually ideal for a buyer to find an inspector and to have a home inspected. It is really important to note that a home never “fails” a home inspection. A home inspection is simply a home expert coming in to give the buyer their opinion of the home. The home inspector will tell the buyer what they think of the home and all the problems or potential problems they see about the home. The buyer can then decide if they wish to waive the home inspection clause and buy the home or they can decide that they did not like what the home inspector said and then they can back out of the contract. It is all up to the buyer as to whether they waive the clause.

For example – the home may have serious damage and the home inspector points out many problems with the home, it is still the buyers’ choice whether they want to continue with the purchase or not. Essentially, clauses like financing and home inspection are ways for buyers to cancel the offer to purchase if they want to. It is for this reason that sellers only allow the buyers about 1-2 weeks to fulfill these conditions. If you allow a buyer 2 months to arrange financing, then they can come back to you in two months and say “we didn’t get approved” and the contract is not valid and your home is back on the market. Again, it is important to educate yourself and read our guide.


05
Offer accepted - Conditions waived - It's Sold!!!

A05.

After the seller accepts the offer, it is then up to the buyer to waive all the conditions but the appropriate date. At which time, the contractis a valid document and the rest is up to the lawyers.

Congratulations!


This website has much more information which one can easily access plus do private transactions (w/o real estate agents ) thus saving thousands of dollars in commission .

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Fido.

I was not aware of this information till I visited this link ... Pasting below for convenience .

http://www.thebramptonnews.com/articles/4244/1/Government-Assistance-for-Home-Buyers/Page1.html

Were you aware of these incentives?

1. The HBP program is a program for first time buyers AND those with a disability. The program allows them to withdraw RRSP money tax free up to $25,000 to buy or build a home. They are required to repay the amount withdrawn over 15 years making 1/15th payments each year. If they are unable to make a payment any given year, they are taxed on that portion only.

2. Land Transfer Tax Refund for First-Time Home Buyers

First-time homebuyers may be eligible for a refund of all or part of the tax.

For agreements of purchase and sale entered into after December 13, 2007, the refund applies to all homes, whether newly constructed or resale.

How much is the Refund?

The maximum amount of the refund is $2,000. If the refund is claimed at time of registration, it may offset the land transfer tax ordinarily payable. If not claimed at registration, the refund may be claimed directly from the Ministry of Revenue. No interest is paid on this refund.

Who Qualifies?

To claim a refund, you:

must be at least 18 years of age;
· must occupy the home as your principal residence within 9 months of after the date of transfer; and
· cannot have owned a home, or an interest in a home, anywhere in the world.

3. Toronto Municipal Tax rebate as follows:

First-Time Purchaser
If you are a first-time purchaser of a newly constructed or re-sale residential property. The rebate for first-time home purchasers is up to a maximum of $3,725.00. If you are eligible for a rebate it can be claimed by your lawyer.

4. Home Buyer Tax credit. HBTC will assist with closing cost for first-time home buyers. This provides up to $750 in tax relief on the purchase of a first home. The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009 the credit will be $750.

5. Eco-Friendly Upgrades. The ecoENERGY Retrofit program provides home and property owners with grants of up to $5,000 to offset the cost of making energy efficient improvements. Anything from increasing insulation to upgrading a furnace.

6. Home Renovation Tax Credit. HRTC will provide a temporary 15% income tax credit on eligible home renovation for work performed, or good acquired after January 27, 2009 and before February 1, 2010.

For more information on home ownership and housing related stimulus go to:
http://www.budget.gc.ca/2009/plan/bpa5a-eng.asp#Personal

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Fido.

CD s ,

I was doing some basic calculation wrt costs in buying and maintaining a house ..... and the comparing it to renting ...... If this calculation is incorrect or I have missed something , please advise .... Considering this is a sticky thread , this might help future readers as well ... All calculations are approximations ....


Price of House 300K

Land Transfer and closing costs 1.5% 4.5K ( including lawyer and inspection )
Less 1st time Home Buyer Credit 2K
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Net 2.5K

Selling and closing costs 5%+ Lawyer 15K ( while selling say after 5 yrs )

Total Fixed Expenses 17.5 ~ 18K

Monthly costs

Mortgage Interest on 240K @ 4.15% 1000 (assuming 20% down payment )
Utilities 250
Property Tax 250
Insurance 50
Lost interest on 60K(2%) 120 (opportunity cost )
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1670

(assuming a sale after 5 yrs apportioning 18K over (5*12) months or 300 pm

Total Monthly costs 1970 ....

Less Basement rent 770...

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Cost to live $ 1200/-

Cost to rent a 2 BR Apt 1000/- - 1100/-

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I know that I haven't considered appreciation , but I haven't considered repairs / maintenance expenses either ... or loss of tenant occupancy .

There s no question of equity as we are assuming selling in 5 years ...

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From the above : does it mean that buying makes more sense if either your family is big and you would need a minimum 3 BR Apartment to rent ?

Or if you don't think of swapping / selling your house for a decade ....

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Fido.

Cost to rent a 2 BR Apt 900/- ??

I am not sure one can find decent 2 BDR rent for 900$ , i hv done some research since i m moving there...i find 1 BDR cost 900$ ...

therefore, to me buying is the best options then renting if u can hold that property for couple of years

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'Some goals are so worthy, it's glorious even to fail.' (Param Vir Chakra awardee Lt. Manoj Pandey)

Yes you are right ..... it might be a $1000/- ... I shall update the post ....... Holding on for a couple of years --- Yes .. but how many on an average to break even ?

I haven't taken the insurance costs also for the house ... How much would they be for a 300K house annually ?

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Fido.

Quote:

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Originally posted by Fido

I haven't taken the insurance costs also for the house ... How much would they be for a 300K house annually ?

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