Kingston Ontario Real Estate FAQS

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Questions on buying a Home

What's a home inspection, and do I need one?

A home inspection is when a paid professional inspector -- often a contractor or an engineer -- inspects the home, searching for defects or other problems that might plague the owner later on. They usually represent the buyer and or paid by the buyer. The inspection usually takes place after a purchase contract between buyer and seller has been signed.

Yes, you need one. Buying a home "as is" is a risky proposition. Major repairs on homes can amount to thousands of dollars. Plumbing, electrical and roof problems represent significant and complex systems that are expensive to fix.

Who pays the Realtor's commission?

The commission is usually paid by the seller out of the funds from the transaction. The amount of commission is stipulated in the listing agreement and on MLS listings. It is shared between the listing broker and the brokerage bringing the offer from the buyer.

There can be other scenarios where the buyer pays his agent but this is rare. The agent can only be paid by one party.

Agents are paid commission, a percentage of the sale of a property. They do not receive salary and do not get paid unless they sell something. Most agent pay for all of their own expenses, including advertising, web presence, automobile and fuel, health care, etc. These expenses are incurred whether or not a sale is made.

How much deposit is required?

The amount of deposit varies in different regions. In the Greater Kingston area it is usually about 5 percent of the purchase price. This deposit is payable immediately upon acceptance of the offer and is held in trust to be applied to the purchase price on closing. In smaller cities the deposit is often much less.

What information is needed to apply for a mortgage?

a completed mortgage application form
a copy of the listing with a property photo,
a copy of the accepted agreement of Purchase and Sale
income verification letter from your employer and some recent pay slips
evidence of the source of your down payment

Can I apply for a mortgage to purchase a property before I’ve found one?

Yes. This is called a Pre-Approval, meaning you have been pre-approved before you actually find a house to purchase.

What taxes are applicable on a real estate purchase or sale?

Land transfer tax is usually the largest tax payable and it is paid by the buyer on closing to the Ontario government to register the transaction.
GST is payable on services such as lawyer's fees, realtor's commission, surveyor's fees etc.
GST is payable on the purchase of new homes and condominiums; substantially renovated homes; some vacant land.
GST is NOT payable on resale homes.
The sale of your principal residence is exempt from capital gains tax but capital gains tax may be payable on income properties or additional properties other than your principal residence.
Non resident tax on income or capital gains by non-residents must be withheld at source.

Can I buy a home with no-money-down?

Kind of. You will still need money for the deposit check that accompanies the offer, and later for lawyers, movers, etc. Today there are lenders that have introduced a 100% mortgage which is designed to let people with good cash flow but absolutely no savings buy a nice house with juicy monthly payments.

Another no-money-down mortgage will offer people the normal 95% financing now allowed, and then throw in the other 5% as cash-back on closing. The catch is just that borrowers need to take out a long-term mortgage, preferably one that has a rate locked in for the next five to seven years.

Now, for some people, this kind of financing makes perfect sense. They may are burdened by an expensive divorce, for example. Or perhaps it's a young, professional couple with great jobs but not much cash left after buying that first Volvo. For these buyers, it means they can have a house without waiting -- which is just the way people like to live these days.