First Time Home Buyer Tips
It is a dream of every person to own a home, with his/her own income. But when they attempt to buy a home for the first time, they often face a lot of troubles, mainly due to their ignorance in this field. It is essential for the first time buyers to know all about the credit they may be able to gain while paying taxes, for buying their own home.
First time Home buyer’s tax credit
It is a special rebate on the payable taxes offered in Canada, only to those people who are buying a home for the first time in their life. As per the latest taxation rate of this country, $750 rebate is allowed for the first-time buyers of residences. But they should be eligible for claiming this rebate, within one year of buying their homes.
- They can buy an existing house or a totally new home, but it should be within Canada only.
- They can buy any type of home; single, semi-detached, townhouse, condo or mobile home; according to their requirements and budget.
- But the buyer should start living at that purchased home, within one year after buying it.
- The buyers may also buy a share in the local cooperative housing corporation, from where the possession of their newly purchased home can be available.
- Moreover, this should be the first home for the buyer, as well as for his/her spouse, at least within the time span of 4 years. The newly bought house should be registered in the name of the buyer or his/her spouse only.
- All the relevant documents of home purchase should be produced during claiming this rebate.
Land transfer tax rebate for first-time buyers of homes
This specific rebate is functional only in the provinces of Ontario, Prince Edward Island and British Columbia. There are certain eligibility criteria for claiming this rebate, in each Canadian province. But the amount of rebate solely depends upon the exact location of the newly bought home, the purchase value of this new home and whether this is totally the first own home for the single or joint buyers.
RRSP home buyer’s plan
This specific Registered Retired Savings Plan is meant to help the first-time home buyers, by letting them borrow up to a amount of $25,000 from his/her RRSP account, without paying any tax for it. This money should be used for the down-payment, while buying his/her first home. If two first-time home buyers want to buy a house jointly, both of them can take money from their RRSP account, with the total available amount going up to $50,000.
GST/HST new housing rebate
If the buyer is purchasing a house, before the construction of the building is completed; he/she can expect to get a rebate on the sales tax. But the amount of this rebate depends on the cost price of the house and it can be availed only if this price is below $450,000.
Selling Your House Tips
It is an important and hard decision for any person to sell his/her house, which may be difficult both emotionally and financially. But the matter seems to be an easier job, when the seller contacts a competent real estate agent, to find the best deals for his property. But there are several important matters to be taken care of, before proceeding for selling the house, so that the selling process can be absolute successful.
Get in touch with the best realtor of the area
Only an experienced and honest realtor can help a person with the sincere advices regarding the sale of his home. But one should take some time to choose the best realtor, by speaking to several real estate agents of his locality and comparing among them. If the realtor who helped to buy the existing home was really efficient, it will be better to carry on with him only; else the friends or local acquaintances can be asked for references of a good realtor. But it is necessary to have a comfort level with the chosen realtor and he should have the best interests of his client at heart, instead of only his own profits.
When is the best time to sell home?
- Firstly, it is better to check the current real estate market, regarding which the hired realtor can help his client. It is best to sell the home, when there are lots of interested home buyers, compared to the numbers of houses for sale, for the chances of getting best price of the home.
- The house should be sold very fast, if it is offered best selling price by the potential customer; else any other seller may snatch the opportunity or even the market scenario may change to become unfavorable for the seller. But the real estate sales are very less in winter, while it jumps back to life in spring season.
- If the seller needs to buy another house, before selling the current home; the purchase price and the time to buy the new home should match with the selling price and the sales closing date of his existing home.
How to manage the financial matters of the home before selling
- If the property is mortgaged, then the seller of the home may pay off the rest of the mortgage amount, from the money obtained from selling the home.
- If the seller of the home wants to carry the portable mortgage of his property to the house he bought next; the interest rate should be lower than the current market value.
- The people who sell their main residential houses, do not have to pay any Capital gains tax for the increased value of those properties.
- If anyone buys the new home before selling the existing one, he may speak with his lender bank to lend him the down payment for his new house, which he can repay once his existing home is sold.
Common Selling Mistakes
When a person tries to sell his home, his main target is to get a customer who will offer him the best possible price for his house. But often many sellers end up with making disadvantageous deals, which make them unsatisfied with the sale of their house. Hence, they should avoid certain common mistakes that most of the sellers tend to make, while trying to sell their homes.
- Improper quotes for the house to be sold – If the salable house is quoted with a too high cost, there will be less number of potential buyers, as people normally want to get the best thing in cheapest possible price. But if very cheap price is quoted, it will cause huge loss for the seller and also it will raise some questions in the minds of the buyers, which can hamper the chance of selling. Hence, it is best to take the guidance of a realtor to fix the best suitable price of a house, as per the current market status in that locality and the size of the home.
- Not proper maintenance of the home – The house that is held out for sale should have a good appearance, so that the buyers can feel attracted towards it, on first sight. Hence, the entire home should be kept in a well cleaned condition. It is a good idea to paint the house freshly and all the indoor and outdoor faults should be repaired, to give the best impression to the buyers.
- Buyers should not be forced to buy – The potential buyers should be allowed to move comfortably around the house, so that they can check all the required aspects of their future home acutely. But the seller of the home should not force on them in any kind, to buy the house, which can create suspicion in their minds about the actual quality of the home.
- Should not attend casual onlookers – Many people just drop in to see a house, without any serious intention of buying. The experienced realtors normally can distinguish between the actually interested buyers and the casual visitors, which can help the seller in spending time only for showing the house to those who really want to buy a home.
- Must not stick to any uncomfortable realtor – Nowadays, the digital marketing is essential for real estate industry too and hence, the hired realtor should be an expert in dealing with online advertisements of the house of his client, so that more buyers can be found. If the realtor is found to be incompetent or insincere in his duties for his client’s interests, the seller should be able to change the realtor, breaking the contract done with him, for which he should be well aware of all the clauses of that contract, to avoid any fine later on.
How Much Money You Need At House Closing
When a person decides to buy a new home, he should be aware of all the costs that he will have to bear, apart from the actual price of his selected house. This knowledge will help him to arrange for meeting this total package of financial burden, including the down payment of the house price and several taxes that are needed to be paid, before closing the deal of purchasing the home.
Different taxes that should be paid before closing home buying deals
- Land transfer tax – When the property is transferred to the name of the new owner, he needs a certain amount of money as land transfer tax. The exact amount of this tax depends on the location of the new house, whether the buyer is purchasing new home for the first time and also on the size of the house in question.
- Home inspection charges – It is better to be ensured about the actual condition of the house to be purchased, which can be done by a Home inspection report, for which a charge of approximately $300 needs to be paid.
- Lawyer’s fees and other legal payments – A competent lawyer needs to be hired, for supervising all the legal sides of the home purchase; including the drafting of the title deed, preparation of the mortgage papers and checking all the legal aspects of the house, before buying it. The lawyer also ensures that the previous owner has paid all the property taxes and the utility bills up to date, so that the new owner need not pay any pending bill. So the lawyer will charge a certain amount of money as his legal fees, in return of all these important services, which should be paid, after the deal is closed. Moreover, the home buyer also needs to pay registration fees of the ownership transfer, along with other legal expenses.
- Fees for property appraisal report – The lender bank of the mortgage amount wants to check whether the amount of money asked by the home buyer is justified or not. Hence, an appraisal report needs to be submitted, the cost of which varies with the location and the size of the house.
- New home insurance – The new home should be immediately covered by a home insurance, which needs to cover the mortgage of the house as well. Hence, the house owner needs to pay the first premium that includes home insurance, mortgage insurance and homeowner’s life insurance, which is relatively higher than ordinary house insurance premium.
- First interest of the mortgage – Upon the completion of all the legal transactions of home purchase and the grant of the required amount of mortgage money; the new home owner may need to pay the first interest of his mortgage, on the first date of the next month.