FIRST-TIME HOME BUYERS • TORONTO CONDOS

Common Questions Answered

Answers to the questions I hear every day from first-time buyers. Down payments, closing costs, condo fees and whether you'll regret it.

The more you know now, the better decisions you’ll make later.

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Process

Q. How long will this actually take?

Resale: two weeks to six months to find something, then 30 to 90 days to close. Most first-time buyers see 10 to 25 properties.

Pre-construction: signing to keys is typically three to five years, with interim occupancy somewhere near the end.

The part people underestimate is the front end. Getting pre-approved, understanding your programs and figuring out what you actually want takes a few weeks — and doing it before you tour saves you from falling for something you can't move on.

Q. Do I need a real estate lawyer?

Yes, and it isn't optional in Ontario — a lawyer has to handle the transfer.

But the useful version of the answer is that a lawyer is the person who reads the status certificate and tells you whether the building is in financial trouble. That's not a formality. It's the step where you find out about the depleted reserve fund or the pending special assessment. Engage them early enough to actually review documents, not the week before closing.

Budget $1,500 to $2,500 including disbursements.

Q. Can I back out after making an offer?

Depends entirely on what conditions are in it.

An offer with a financing condition and a status certificate review condition gives you defined windows to walk away and get your deposit back. An unconditional offer is binding — if you can't close, you can lose your deposit and be sued for the difference if the seller resells for less.

In competitive markets buyers are pushed to drop conditions. Sometimes that's a reasonable risk with a pre-approval in hand and a lawyer who's pre-reviewed the certificate. Often it isn't. It's the single riskiest thing a first-time buyer routinely gets talked into.

Pre-construction is different: Ontario gives you a statutory 10-day cooling-off period after signing, during which you can cancel for any reason and get your deposit back in full.

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Money and Lending

Q. How much can I actually afford?

There are two answers, and the gap between them is where people get into trouble.

What a lender will approve comes from two ratios. Gross Debt Service caps your housing costs — mortgage, property tax, heat, and half your condo fees — at around 39% of gross income. Total Debt Service caps everything including car loans and credit cards at around 44%. Then it's all stress-tested at the greater of your rate plus two points or 5.25%, so at a 3.65% rate you're assessed as though you're paying 5.65%.

What you should actually spend is a different question, and it's the one that matters. My working benchmark is the traditional 32% / 40% standard rather than the modern maximum. On most incomes that lands $60,000 to $180,000 below what a lender would approve.

Getting approved for your maximum is how people end up house poor. The approval tells you what you can borrow, not what you should.

The practical test: after the mortgage, condo fees, property tax, insurance and utilities, can you still save something each month and keep three to six months of full carrying costs in reserve? If not, the number is too high.

Learn what you may qualify for →

Q. Do I need a mortgage pre-approval before we start?

You don't need one before you call me.

But the first thing I will tell you to do is to get a mortgage pre-approval so that we can understand your borrowing capacity. There's nothing particularly fun about falling in love with an $800,000 condo and discovering afterward that your comfortable budget is $650,000.

We figure out the money first. Then we shop.

In competitive bidding situations, knowing what you can afford before the offer can make the difference between getting your dream property and missing out on “the one”.

I will refer you to a trusted mortgage partner if you need help, so there’s one less thing to stress about.

Q. Do I have to buy with 20% down?

No — and this is the most persistent myth in Canadian real estate.

The actual minimums are tiered:

5% on the portion up to $500,000
10% on the portion between $500,000 and $1.5 million
20% at $1.5 million and above, where mortgage insurance isn't available at all

So a $750,000 condo needs $50,000, not $150,000. That surprises almost everyone.

What 20% gets you is avoiding mortgage default insurance. Below that you pay a premium — roughly 2.8% to 4% of the loan depending on how much you put down, plus about 0.20% more for a 30-year amortization. On a $700,000 loan at 5% down that's around $29,000, added to your mortgage rather than paid at closing.

The honest trade-off: waiting years to reach 20% means years of paying rent while prices and rates move independently of your savings. Sometimes that wait is right. Often it isn't. Run both scenarios rather than treating 20% as a rule.

Q. How much are closing costs, really?

This is the category that blindsides first-time buyers, because it's entirely separate from the money they've you’ve saving but it’s entirely predictable.

For a Toronto purchase, your closing budget can include:

Land transfer tax — provincial, plus a second municipal one in Toronto
Legal fees and disbursements — typically $1,500 to $2,500
Title insurance — typically $1,000
Appraisal or inspection costs — often $500 each where applicable
Adjustments — prepaid property tax and condo fees the seller has already paid for
Moving expenses and other practical costs
On pre-construction — development charges, levies, Tarion enrolment and utility hookups, which can run well into five figures unless your agreement caps them

Toronto buyers have both provincial and municipal land transfer tax to consider. Eligible first-time buyers can currently receive rebates of up to $4,000 from Ontario and $4,475 from Toronto, which can substantially reduce the bill.

Q. Should I use a mortgage broker or my bank?

Your bank offers you your bank's products. A mortgage broker shops multiple lenders, which matters more than people think — lenders apply the same federal rules with meaningfully different discretion on income types, credit history and self-employment.

If you're a salaried employee with strong credit, your bank may be competitive. If you're self-employed, on commission, newly employed, or have anything unusual in your file, a broker will almost always do better. Either way, get at least two quotes. The rate difference on a $600,000 mortgage over five years is real money.

Q. Can my parents help?

Yes, absolutely and it's increasingly common for how first purchases happen. But how it's structured matters more than most people realize.

A gift is generally straightforward. Your lender will want a signed gift letter confirming it isn't a loan and doesn't need to be repaid, plus evidence of where the funds came from.

A co-signer or co-buyer who already owns property is the expensive version. Most first-time buyer programs — both land transfer tax rebates, the federal GST rebate, the FHSA — require that everyone on title meets the first-time buyer definition. Adding a parent can reduce or eliminate rebates worth tens of thousands.

There are usually ways to structure family help that don't cost you the programs — a gift rather than co-ownership, or a co-signer arrangement that doesn't put them on title. But the conversation has to happen before anyone transfers money or signs anything.

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Fear and Trust

Q. Should I buy now or wait?

ANSWER

There is no universally perfect time to buy.

A falling market can mean better prices but more uncertainty. A rising market can give you more confidence but more competition. Lower rates can improve affordability while simultaneously bringing more buyers back into the market.

Instead of asking “Is now the perfect time?”, I think the better question is:

“Is now a good time for me?”

If you have stable income, sufficient cash, a realistic budget and expect to own the property for a reasonable period of time, buying may make sense even if we can't predict what prices will do next month.

Should I buy now or wait? →‍ ‍the 4 situations where you definitely shouldn’t buy.

Q. Will I regret buying?

ANSWER

Some people do. In my experience it's almost always one of three things:

They stretched too far and the payments took over their life
They moved within three years and selling costs erased the equity
They didn't ensure they were protected and inherited someone else's problem

All three are avoidable, and I screen for all three before you make an offer. What I can't protect you from is the market — nobody can, and anyone claiming otherwise is selling.

What I notice is that the people who regret buying almost never regret the property. They regret the payment. Which is why I push harder on the reserve question than on anything else.

Q. What if the market drops right after I buy?

It might. If prices fall 10% on a $700,000 condo, that's $70,000 on paper.

That loss is only real if you sell. Over a five-year horizon you're exposed to the price in year five, not next year.

The risk isn't buying at the wrong price. It's buying at a price you can't hold through.

Someone who can comfortably carry the payment through a downturn doesn't lose. Someone who stretched and gets forced to sell in year two does. Which is the variable you control — and the one worth stress-testing before you buy rather than after.

Q. How can we work together?

This is something I’ll explain before you sign anything but in most cases, nothing directly.

On resale, the seller's brokerage typically offers compensation that covers both sides of the transaction. On pre-construction, the builder pays. Either way, you generally aren't writing me a cheque.

Two things worth saying plainly:

There's a real conflict of interest here and you should know about it. I'm paid when you buy. That means I have no financial reason to steer you toward one project over another, but I absolutely have an incentive to want you to buy something but I focus on long-term relationships because I want to help you with your real estate needs over next 20 years if you’ll let me, I won’t jeopardize that trust to make one deal.

Under Ontario's rules, buyer representation agreements set out the compensation in writing before we work together, including what happens in the rare case where a seller's offered compensation falls short of what's agreed. Generally this number is 2.5% and sign off on it — no surprises at closing. I'll walk you through it before you sign anything.

Q. How much do you services cost?

This is something I’ll explain before you sign anything but in most cases, nothing directly.

On resale, the seller's brokerage typically offers compensation that covers both sides of the transaction. On pre-construction, the builder pays. Either way, you generally aren't writing me a cheque.

Two things worth saying plainly:

There's a real conflict of interest here and you should know about it. I'm paid when you buy. That means I have no financial reason to steer you toward one project over another, but I absolutely have an incentive to want you to buy something but I focus on long-term relationships because I want to help you with your real estate needs over next 20 years if you’ll let me, I won’t jeopardize that trust to make one deal.

Under Ontario's rules, buyer representation agreements set out the compensation in writing before we work together, including what happens in the rare case where a seller's offered compensation falls short of what's agreed. Generally this number is 2.5% and sign off on it — no surprises at closing. I'll walk you through it before you sign anything.

Q. Am I being sold to right now?

ANSWER

Of course! This is a real estate agent’s page after all… but I’m all about education.

You can see 3 properties or see 30. I'm not keeping score.
Don't like the property? We walk away.
Think it's overpriced? I'll show you the comparable sales.
Want to wait six months? No problem.
Want to know exactly how I'm paid? I'll explain it before you sign anything.
Want to offer less than I recommend? It's your money. We'll discuss the strategy and execute your decision.

I don't get to decide when you buy. You do.

I would never break your trust me in me and our relationship—I want to help you with your real estate needs for the next 30 years and I wouldn’t jeopardize that for a single sale.

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Property Type

Q. Should I buy a condo, townhome or house?

Depends less on preference than on three things: your budget, your timeline, and how much of your life you want to spend on maintenance.

Condo — the lowest entry price and the least work. Fees cover the building envelope, roof, common areas and often some utilities. The trade-off is that you pay those fees forever, they rise, and you're exposed to special assessments and the quality of your condo board. Best for: first purchases, smaller budgets, central locations, people who travel or don't want to own a snow shovel.

Stacked or freehold townhome — the middle path, and often the sweet spot for first-time buyers who want more space. Freehold means no condo fees but full responsibility for your own roof and mechanicals. Stacked towns usually have a common element fee that's lower than a tower's. In Ottawa in particular, stacked towns sit comfortably under the $1M federal rebate threshold, which puts the full GST rebate in play.

Detached house — the most space, the most control, the most cost. Beyond the purchase price, budget 1–2% of the home's value annually for maintenance. In Toronto specifically, the entry price puts detached out of reach for most first-time buyers without significant help.

The framing I'd use: don't ask which is best. Ask which one lets you buy in a location you'd actually want to live, with a payment that lets you sleep at night. A condo in the right neighbourhood usually beats a house in the wrong one.

Q. Should I buy a condo, townhome or house?

Depends less on preference than on three things: your budget, your timeline, and how much of your life you want to spend on maintenance.

Condo — the lowest entry price and the least work. Fees cover the building envelope, roof, common areas and often some utilities. The trade-off is that you pay those fees forever, they rise, and you're exposed to special assessments and the quality of your condo board. Best for: first purchases, smaller budgets, central locations, people who travel or don't want to own a snow shovel.

Stacked or freehold townhome — the middle path, and often the sweet spot for first-time buyers who want more space. Freehold means no condo fees but full responsibility for your own roof and mechanicals. Stacked towns usually have a common element fee that's lower than a tower's. In Ottawa in particular, stacked towns sit comfortably under the $1M federal rebate threshold, which puts the full GST rebate in play.

Detached house — the most space, the most control, the most cost. Beyond the purchase price, budget 1–2% of the home's value annually for maintenance. In Toronto specifically, the entry price puts detached out of reach for most first-time buyers without significant help.

The framing I'd use: don't ask which is best. Ask which one lets you buy in a location you'd actually want to live, with a payment that lets you sleep at night. A condo in the right neighbourhood usually beats a house in the wrong one.

Q. How do I know if a condo building is actually good?

The lobby isn't how I judge a condo.

We want to understand the building itself: management, maintenance fees, reserve fund, upcoming repairs, legal issues, unit sales, layouts and how easy the property may eventually be to resell and a review of the Status Certificate is the key way to ensure you’re protected.

Beautiful countertops can be changed.

A problematic building is considerably harder to change.

Q. What's the difference between pre-construction and resale?

Resale you see, inspect and move into within a couple of months. What you see is what you get.

Pre-construction you buy from a floor plan, years before it exists. The advantages: lower entry price on some projects, deposit paid in instalments rather than all at once, everything brand new with a Tarion warranty, and full GST rebate eligibility that resale doesn't offer.

The costs are real and under-explained:

Interim occupancy — you move in before you legally own, paying the builder monthly, and none of it builds equity
Development charges — payable at final closing, potentially years later, and uncapped unless your agreement says otherwise
Delay and cancellation risk — protections exist, but your money can be tied up for years
You're buying a floor plan, not a finished unit

Pre-construction suits people with a long horizon and no urgency about moving. It's a poor fit for anyone who needs a home this year.