Home buying step by step – Step 3

Source CMHC Canada Mortgage and Housing Corporation

Step 3: Which home is right for you?

home buying step by step, which home is right for you


Home Buying Step By Step – Step 3 Which Home is Right for You?

Once you have a good idea about your finances, you’ll need to think clearly about the home you’d like to buy.


Your Needs — Now and in the Future

Try to buy a home that meets most of your needs for the next 5 to 10 years, or find a home that can grow and change with your needs.


Here are some things to consider.



How many bedrooms do you need?

How many bathrooms do you need?

Do you need space for a home office?

What kind of parking facilities do you need? For how many cars?



Special features

Do you want air conditioning? If so, what type?

Do you want storage or hobby space?

Is a fireplace or a swimming pool high on your list?

Do you have family members with special needs?

Do you want special features to save energy, enhance indoor air quality, and reduce environmental impact?


Lifestyles and stages

No matter what type of housing you choose, you must have a clear idea of your needs today, as well as your possible future needs. These are some examples of questions homebuyers might ask:

Do I plan to have children?

Do I have teenagers who will be moving away soon?

Am I close to retirement?

Will I need a home that can accommodate different stages of life?

Do I have an older relative who might come to live with me?


The CMHC worksheet Home Features Checklist can help you think about what you need today, and what you may need in the future. Complete the worksheet and print it.

FlexHousing™ is a housing concept that incorporates, at the design and construction stage, the ability to make future changes easily and with minimum expense, to meet the evolving needs of its occupants.


What Location Should You Choose?

Location is a critical factor. A home with everything you need, in the wrong location, is probably not the right home for you. Here are some things to consider about location.

  • Do you want to live in a city, a town or in the countryside?
  • How easy will it be to get to where you work? How much will the commuting cost?
  • Where will your children go to school? How will they get there?
  • Do you need a safe walking area, or recreational facility, such as a park, nearby?
  • How close would you like to be to family and friends?

Download a copy of the Your Next Move: Choosing a Neighbourhood with Sustainable Features fact sheet.


What is a Sustainable Neighbourhood?

A sustainable neighbourhood meets your needs, while protecting the environment. Homes in a sustainable neighbourhood are located near shops, schools, recreation, work and other daily destinations. This helps reduce driving costs and lets residents enjoy the health benefits of walking and cycling. Land and services, like roads, are used efficiently. Sustainable neighbourhoods also feature a choice of homes that are affordable.

In your search for a sustainable neighbourhood, here are some questions to ask:

  • Easy transportation
    • Are stores, schools, recreation facilities, restaurants, and health services within walking or cycling distance? Will your children need to take a bus to school? Can they walk to the park? Can you do most of your shopping without a car?
    • Are there nearby bus stops and cycling lanes? How long is the bus ride to work, or school? Can you safely bike?
  • House size and features
    • Are the homes compact with shared walls to reduce heating costs?
    • Are homes reasonably sized with lots requiring less upkeep?
    • Are there different dwelling types (such as single-detached, semi-detached, townhouse and apartments) in the neighbourhood?
    • Are the lots modestly sized? Roadways narrow? Driveways/parking areas small?  Do natural drain ways lead to streams and storm water ponds or park lands? Is there native vegetation and streams with woodland edges?
  • “Look and feel”
    • Do the buildings have a friendly face to the street? Are the community centres, shops and meeting places welcoming?
    • Are there trees lining the street? Do you find the homes interesting to look at?  Do the building sizes feel comfortable to you? Are the roads easy to walk along or cross?
  • Safety
    • Do the homes have “eyes on the street”? (In other words, are there people around who might watch out for you? Is there somewhere to go in an emergency?)
    • Is there adequate street lighting?
    • Are there safe places for children to play?
    • Are the streets safe for cyclists and pedestrians?
    • Is traffic slow moving and light?

Use the CMHC worksheet What’s Important to You to figure out the things that are important in your neighbourhood.


Do You Want a New Home or a Previously-Owned Home?

A new home is one that has just been built – no one else has lived in it yet. You might buy a new home from a contractor who has built it, or you might hire a contractor to build it for you. A previously-owned home (often called a resale) has already been lived in. Here are some characteristics of each type of home.


New Home

  • Up-to-date
    • A new home has up-to-date design that might reflect the latest trends, materials and features.
  • Choices
    • You may be able to choose certain features such as style of siding, flooring, cabinets, plumbing and electrical fixtures.
    • You may have to pay extra if you want to add certain features, such as a fireplace, trees and sod, or a paved driveway. Make sure you know exactly what’s included in the price of your home.
  • Costs
    • Taxes such as the Goods and Services Tax (GST) (or, in certain provinces, the Harmonized Sales Tax (HST)) apply to a new home. However, you may qualify for a rebate of part of the GST or HST on homes that cost less than $450,000. For more information about the GST New Housing Rebate program, visit the Canada Revenue Agency website at www.cra-arc.gc.ca.
    • A new home will have lower maintenance costs because everything is new, and many items are covered by a warranty. You should set aside money every year for future maintenance costs.
  • Warranties
    • A warranty may be provided by the builder of the home. Be sure to check all the conditions of the warranty. It can be very important if a major system such as plumbing, or heating, breaks down.
    • New Home Warranty programs are generally provided by provincial and territorial governments. There are also private new home warranty programs. In some provinces a warranty may be provided by the builder of the home. Check with your realtor or lawyer/notary to find out what the new home warranty program in your province or territory covers.
  • Neighbourhood amenities
    • schools, shopping malls and other services, may not be completed for years.

Building Your Own Home

Some people prefer the challenge and flexibility of building their own home. On one hand, you make all the decisions about size, design, location, quality of material, level of energy-efficiency and so on. On the other hand, expect to invest lots of time and energy.


Resale Home

  • When the home already exists, you can see what you are buying. Since the neighbourhood is established, you can see how easy it is to access services such as schools, shopping malls, libraries, etc.
  • Landscaping is usually done and fencing installed. Previously owned homes may have extras like fireplaces or finished basements or swimming pools.
  • You don’t have to pay the GST/HST unless the house has been renovated substantially, and then the taxes are applied as if it were a new house.
  • You may need to redecorate, renovate or do major repairs such as replacing the roof, windows and doors.

What Type of Home Should You Buy?

What types of homes will you be visiting with the idea of buying? Do you see yourself living in a detached single-family home? Or, perhaps a townhouse? Maybe, a duplex?


Single-family Detached

A single-family detached home is one dwelling unit. It stands alone, and sits on its own lot. This often gives the family a greater degree of privacy.


Single-family Semi-detached

A semi-detached home is a single-family home that is joined on one side to another home. It can offer many of the advantages of a single-family detached home. It is often less expensive to buy and maintain.



A duplex is a building containing two single-family homes, located one above the other. Sometimes, the owner lives in one unit and rents the other.


Row House (Townhouse)

Row houses (also called townhouses) are several similar single-family homes, side-by-side, joined by common walls. They can be freehold or condominiums. They offer less privacy than a single-family detached home, although each has a separate outdoor space. These homes can cost less to buy and maintain, even though some are large, luxury units.


Stacked Townhouse

Stacked townhouses are usually two-storey homes. Two two-story homes are stacked one on top of the other. The buildings are usually attached in groups of four or more. Each unit has direct access from the outside.


Link or Carriage Home

A link, or carriage home, is joined by a garage or carport. The garage or carport gives access to the front and back yards. Builders sometimes join basement walls so that link houses appear to be single-family homes on small lots. These houses can be less expensive than single-family detached homes.


Manufactured Home

A manufactured home is a factory-built, single-family home. It is transported to a chosen location, and placed onto a foundation.


Modular Home

A modular home is also a factory-built, single-family home. The home is typically shipped to a location in two, or more, sections (or modules).


Mobile Home

Mobile homes, like manufactured or modular homes, are built in factories, and then taken to the place where they will be occupied. While these homes are usually placed in one location and left there permanently, they do retain the ability to be moved.



A self-contained unit in part of a building consisting of a room or set of rooms including kitchen and bathroom facilities.


Forms of Ownership

People who do not rent their home, own it. There are two forms of ownership.



Freehold means that one person (or two, such as joint ownership by spouses) owns the land and house outright. There is no space co-owned or co-managed with owners of other units.

Freehold owners can do what they want with their property — up to a point. They must obey municipal bylaws, subdivision agreements, building codes and federal and provincial laws, such as those protecting the environment.

Detached and semi-detached homes, duplexes and townhouses are usually owned freehold.



Condominium ownership means you own the unit you live in and share ownership rights for the common space of the building. Common space includes areas such as corridors, the grounds around the building, and facilities such as a swimming pool and recreation rooms. Condominium owners together control the common areas through an owners’ association. The association makes decisions about using and maintaining the common space.

Condominium ownership is ownership of a unit, usually in a highrise but can also be a townhouse or in a lowrise.


What Professionals Should You Call On?

Even if this isn’t your first homebuying experience, you’ll want to get help from a team of professionals. Having the help of professionals will give you experienced and knowledgeable people for reliable information and answers to your questions. These are the people who can help you:

  • Realtor
  • Lenders or mortgage broker
  • Lawyer or notary
  • Insurance broker
  • Home inspector
  • Appraiser
  • Land surveyor
  • Builder or contractor

You will be doing a lot of interviewing to establish your team. Use this handy CMHC worksheet to help you keep track of the people you interview and the ones you finally choose.


The next sections describe each professional role.


The Realtor

Your realtor’s job is to:

  • Help you find the ideal home
  • Write an Offer of Purchase
  • Negotiate to help you get the best possible deal
  • Give you important information about the community
  • Help you arrange a home inspection

Finding a Realtor

When looking for a realtor, don’t be afraid to ask questions — especially about possible service charges. Normally, the seller pays a commission to the agent. But, some realtors charge buyers a fee for their services. Use the CMHC worksheet Checklist for Evaluating Realtors to help you.

If you would like to know more about a realtor’s ethical obligations, go to the Canadian Real Estate Association’s website at www.crea.ca, or call your local real estate association.


The Lender or Mortgage Broker

Many different institutions lend money for mortgages — banks, trust companies, credit unions, caisses populaires (in Quebec), pension funds, insurance companies, and finance companies. Different institutions offer different terms and options — shop around!

Mortgage brokers don’t work for any specific lending institution. Their role is to find the lender with the terms and rates that are best for the buyer.


Finding a Lender or Mortgage Broker

  • Ask around.  Your realtor, another professional, family members, or friends may give you helpful suggestions.
  • Look in the Yellow Pages™ under “Banks,” “Credit Unions” or “Trust Companies” for a lender and under “Mortgage Brokers” for a broker.
  • Contact the Canadian Association of Accredited Mortgage Professionals at 1-888-442-4625, or visit the Association’s website at www.caamp.org.

The Lawyer/Notary

Having a lawyer/notary involved in the process will help ensure that things go as smoothly as possible. You need a lawyer (or a notary in Quebec) to perform these tasks:

  • Protect your legal interests by making sure the property you want to buy does not have any building or statutory liens, charges, or work or clean-up orders
  • Review all contracts before you sign them, especially the Offer (or Agreement) to Purchase.

Finding a Lawyer

Law associations can refer you to lawyers who specialize in real estate law. In Quebec, contact the Chambre des notaires du Québec for the names of notaries specializing in real estate law.

Remember that a lawyer/notary should:

  • Be a licensed full-time lawyer/notary
  • Live/work in the area
  • Understand real estate laws, regulations and restrictions
  • Have realistic and acceptable fees
  • Be able and willing to explain things in language you can easily understand
  • Be experienced with condominiums, if that’s what you are buying

Lawyer/notary fees depend on the complexity of the transaction and the lawyer’s expertise.

Shop around for rates when choosing your lawyer/notary. Use the CMHC worksheet Checklist for Selecting a Lawyer/Notary to guide you.


The Insurance Broker

An insurance broker can help you with your property insurance and mortgage life insurance.

Lenders insist on property insurance because your property is their security for your loan. Property insurance covers the replacement cost of your home, so the size of your premium depends on the value of the property.

Your lender may also suggest that you buy mortgage life insurance. Mortgage life insurance gives coverage for your family, if you die before your mortgage is paid off. Your lender may offer this type of insurance. In this case, the lender adds the premium to your regular mortgage payments. However, you may want to compare rates offered by an insurance broker and by your lender.

Don’t confuse property insurance, or mortgage life insurance, with mortgage loan insurance.


The Home Inspector

Whether you are buying a resale home, or a new home, consider having it inspected by a knowledgeable and professional home inspector.

The home inspector’s role is to inform you about the property’s condition. The home inspector will tell you if something is not working properly,  needs to be changed, or is unsafe. He or she will also tell you if repairs are needed, and maybe even where there were problems in the past.

A home inspection is a visual inspection. It should include a visual assessment of at least the following:

  • Foundation
  • Doors and windows
  • Roof and exterior walls
  • Attics
  • Plumbing and electrical systems (where visible)
  • Heating and air conditioning systems
  • Ceilings, walls and floors
  • Insulation (where visible)
  • Ventilation
  • Septic tanks, wells or sewer lines (if inspector is qualified)
  • Any other buildings such as a detached garage
  • The lot, including drainage away from buildings, slopes and natural vegetation
  • Overall opinion of structural integrity of the buildings
  • Common areas (in the case of a condominium/strata or co-operative)


Finding a Home Inspector

It’s important to hire a knowledgeable, experienced and competent home inspector. In most areas of Canada, there are no licensing or certification requirements for home inspectors. Anyone can say that they are a home inspector without having taken any courses, passed tests or even inspected houses. So look for a home inspector who belongs to a provincial or industry association holds an accreditation that demonstrates training and experience, provides inspection reports, carries insurance, provides references and has strong experience with the type of home to be inspected.

While CMHC does not recommend any individual home inspector or association, CMHC supports national standards of competency for home inspectors such as the home inspection industry’s voluntary and independent National Certification Program.

Home inspector fees are generally in the $500 range, depending on the size and condition of the home. Use the CMHC worksheet Home Inspection Checklist to review your home inspection report.


The Appraiser

Before you make an offer, an independent appraisal can tell you what the property is worth. This will help ensure that you are not paying too much. In order to complete a mortgage loan, your lender may ask for a recognized appraisal.

The appraisal should include:

  • Unbiased assessment of the property’s physical and functional characteristics
  • Analysis of recent comparable sales
  • Assessment of current market conditions affecting the property

Finding an Appraiser

Ask your realtor to help you find an appraiser.


The Land Surveyor

If the seller does not have a Survey or Certificate of Location, you will probably need to get one for your mortgage application. If the Survey in the seller’s possession is older than five years, it needs to be updated.

Remember that you must have permission from the property owner before hiring a surveyor to go onto the property. Ask your realtor to help co-ordinate this with the owner.


Finding a Land Surveyor

Search the web or Yellow Pages™ or ask your realtor to help you find a land surveyor.


The Builder/Contractor

If you are buying a newly constructed home, you will have to hire a builder or contractor. If you are buying a resale house that needs renovations, you may also require a builder or contractor.

Here are some things to keep in mind when choosing a builder or contractor:

  • Ask for references. Talk to other customers about the builder’s performance.
  • Check with the New Home Warranty program in the area (if applicable).
  • Visit other housing developments that the company has built.
  • Ask builders or contractors if they are members of a local homebuilders’ association. Ask them for their provincial license number.

If you are having a custom home built, remember that:

  • You may want to hire an architect to design the house, and supervise construction.
  • Builders of custom homes usually work on either a fixed-price or a cost-plus basis. Authorize any changes to your contract by writing your name or initials beside the change.

Make sure your contract with the builder or contractor is very specific about construction details. You can even require that the brand names or model number of finishes be specified. If you agree to a change in the contract, write your initials next to the change.

17 thoughts on “Home buying step by step – Step 3

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    • October 16, 2012 at 12:39 pm

      That’s really thkining at a high level

      • January 11, 2013 at 1:33 am

        You may not want to hear this, but your perception of what a rebsonaale rate is and what your lender thinks is a rebsonaale rate are completely different. While you are looking at your rate for your 20% loan and comparing it to your first, your lender is pricing your second mortgage to adjust for the increased risk of lending out 100% of the value of your home. If you are looking to replace your current second mortgage, understand that there are no real deals out there for stand-alone second mortgages and there are not very many lenders (especially now) that offer stand-alones. Your best bet would be to look at a HELOC (Home Equity Line of Credit) to pay off your second mortgage which would be priced at the Prime Rate plus or minus up to one percent and would have minimal or no closing costs. If it makes you feel better though, you are still not in a bad loan structure considering the blended rate that you currently have of 6.05% (5.25*.8 + 9.25*.2) which is not currently available for 80% financing let alone 100%. Also you should be looking at a worst case blended rate of around 6.65% based off of what I am assuming is a 6% lifetime cap on your second mortgage adjustments.

      • January 13, 2013 at 6:25 am

        You could call the company where you have the loan ask to speak to a loan ocefifr and ask them what their policy is if you cannot/do not make the payments.orCall any institution and ask if you make a loan and for some reason cannot make the payments what happens? Just generic information. This is just for your education..Not all institutions are the same.Call an attorney who is experienced in real estate or foreclosures and ask them what steps you should take.,,,, to have the best outcome for yourself.It is scary but not to do anything may jeopardize your financial future in ways you cannot know now.

  • September 24, 2012 at 5:01 am

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    • January 13, 2013 at 7:12 am

      This is why it is This is why it is important to work with licnesed professionals. You have to have someone who is licnesed with the Department of Commerce, in some way or another.Also, DON’T PAY UP FRONT!!! When a company get everything up front they are not as motivated to get the job done.Now, I will say, in defense of the company featured here. It is not uncommon for banks to say that they have had no contact even after repeated phone and mailings. That is why you need someone who knows how to do it. Was this answer helpful?

      • September 8, 2013 at 10:04 am

        If there is a lien/mortgage on the property that is srpaeate from the main mortgage and the main mortgage is in foreclosure, who if anyone is liable for the srpaeate lien/mortgage on the house? If someone purchases the home from the foreclosure company and the main mortgage is totally paid off but there is no additional funds to pay the small lien/mortgage on the house. What if any position does the person who has the small lien/mortgage on the house have. I have been told that the party that has the small lien/mortgage on the home is out of luck and has no recourse except to come after me personally.

  • November 18, 2012 at 7:04 pm

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    • November 29, 2012 at 1:52 pm

      Hi there,

      Perhaps to start with you can go with one of the popular free platforms such as WordPress and Joomalah. They have a large network of developers and contributors, always updating and improving the core site. The good thing with these platforms is that there are many ready to go templates that you can fairly easily activate on your site with minimal effort. As you get serious and require professional technical help, you could always seek the services of a pro IT company.

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      • January 10, 2013 at 2:23 pm

        Definitely send out the dispute leertts on the collections. If nothing else, it buys you a couple weeks time. Do not tell the credit bureaus about them if they don’t reply though. Definitely try to negotiate the balances on those collections. Never send a payment until you have a written payoff amount from them first. NEVER. Before you try to negotiate, be sure you can pay them by Western Union or something within 24-48 hours, so have money ready. Start offering 10 cents on the dollar, they’ll probably talk you to 50 (half of balance). Just don’t pay til you have a fax or something confirming it, otherwise 2 years later someone will come after the rest.Once you’ve paid all of them, dispute the accounts with the credit bureaus. Any inaccuracy of any kind is ok to dispute. Most collectors won’t respond to disputes on paid accounts. This way, the bureaus are required to remove them from your report. If it doesn’t work the first time, keep trying. It takes 45-60 days for each cycle, but it’s worth it.Child support would only show up on your report if you have a delinquent balance. The only way to clear this is to speak with the county you are paying. If you are set up on a plan to get caught up, and have been performing as promised for 6-12 months, you might be able to get them to stop reporting the delinquent balance, since you are effectively now paying as agreed .Dispute the late payments on the mortgage. Make your lender prove it somehow. Some lenders delete specific data on payments after some period of time. Demand to know the precise date each payment was actually posted. Demand to know the precise time the check was received by them. If those dates don’t match, dispute the late report. Demand anything else you can think of. See what happens. Try, try again.

      • January 10, 2013 at 2:23 pm

        With years in the credit bneuisss:1. Do not pay the entire collections. The sleaze balls should not have added interest on the debt. Next time, call and settle for less than the total amount. However, get the settled amount in writing before you pay it and don’t pay anything by phone. I can’t stand when this industry takes advantage of people.Go to and click on consumers . Read through the federal guidelines and laws on debt collection.2. You have 30 days to dispute from the original letter. You can certainly dispute the debts now, but they will not come off your credit report. Even if they can’t deliver the verification (as required by law) don’t expect them to remove the debts. If they don’t remove them, file an online complaint with your state’s attorney general’s office as well as their industry organization, the ACA.3. You handle negative tradelines by disputing them. If the bureaus can not verify the debts, they must be removed.4. Please see some of my other posts on how to start the repair process.5. Your child support usually only shows up if you are behind. However, your state may be one that lists it on your credit bureau to ensure creditors are aware of it. I have not heard of this, but it might be entirely legal. If you are behind (or have been behind) this might make much more sense. If you are currently behind, dispute the debt when it is current. You might find the state will verify it is paid and you might be able to get it removed. No promises here.6. Yes, you can certainly dispute the late mortgage payments. Again, it is the burden of the bureaus to verify it. And yes, you might get lucky, but don’t hold your breath. However, I do recommend doing this with any negative information!

        • September 8, 2013 at 7:17 am

          I think this article has neclegted some of the benefits of tankless systems:-The lower energy usage also reduces carbon emissions-Their higher installed cost is largely due to the new venting/ gas line/ power line they require. After one tankless unit is installed, its replacement should be less expensive (presumably you’ll be able to find a unit with similar requirements)-As well as the other benefits you mentioned on your tankless page (rust-free water, lower risk of water damage, less space, etc.)

      • January 13, 2013 at 6:56 am

        try work with your lender first. Give them a call and let them know about your siiottaun. In this housing market they might lose even more if they foreclose you so many of them are willing to work with you to help you pay off the mortgage and save your houseAll these mortgage got a department that help homeowner that is experiencing hardship just like you. usually it is call the loss mitigation department. Just give them a call and tell them your siiottaun and they will be willing to help you. Foreclosure and bankruptcy is the last thing you want

        • September 8, 2013 at 4:41 am

          yes you can, with a low credit score ,you might end up with a higehr interest rate, its not just credit that determines your loan, your income , savings and any assets also determine your loan rate, since your rate might be high, try to get a fixed rate, or increase the amount of your dowmpayment,or you can wait for many reasons, the fed plans to increase the rate through out the year , you can save to increase your dowmpayment and also pay off debts to boost your credit score, a higehr downpayment and a better credit score will give you a much better rate which will save you money in the longrun ,regarding the pesronal loan, you can pass by the nearest bank and talk to their loan officers to see what they can do for you, a lot of mortgage companies offer loans with a zero downpayment but this comes at a cost due to a higehr rate, good luck,

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