Understanding the Contract of Purchase and Sale – Residential

Buying Through the Uncertainty Among the first-time home buyers, 67% felt uncertain or had concerns during their home-buying journeys. Their concerns ranged from living with high monthly carrying costs to interest rate increases, as 63% are already overpaying for a home worried about their future finances and mortgage payments. This fear may explain why more than half of these first-time buyers opted for co-ownership: purchasing a home with their parents, siblings, or even their friends instead of their partner or spouse. Most FTHBs believe that they have received the best mortgage for their needs. 56% chose a fixed mortgage, leading to 72% saying they are comfortable with their mortgage debt. 79% believe that homeownership is a good long-term financial investment, and 71% are confident that the value of their home will appreciate in the next year. Gifts and Incentives: A good 41% of FTHBs have received monetary gifts or inheritance towards their down payments, averaging $74,570; however, 80% of those who received a gift stated that they would have proceeded to purchase a home even without one. This means that purchasing a home would have still been within their means, whereas only 65% have paid the maximum of their budget. Other incentives that have helped first-time buyers include utilizing savings from a tax-free home savings account (FHSA) and savings outside of a registered retirement savings plan (RRSP). A Home Buyer’s Plan (HBP) is an FTHB program that enables a withdrawal of up to $60,000 from an RRSP to purchase a home, requiring repayment of that amount over 15 years. The federal government has also recently released a new GST relief program for FTHBs to receive a full GST rebate on new homes valued at up to $1 million and a phased reduction between $1 million and $1.5 million, which means FTHBs can save up to $50,000 on taxes. Unexpected Costs: Even though a majority of first-time home buyers discussed potential unexpected homebuyer costs with their mortgage professional before purchasing, 44% still incurred these unexpected costs. From lawyer or notary fees to home inspection and immediate repairs, these costs may have been anticipated and factored into the budget if they had known what to expect. 56% of FTHBs utilize social media, including YouTube, Facebook, and Instagram, to receive information regarding mortgage options. This is where it is crucial to do your homework to research and fact-check the information you are receiving! Much of the news and circulating information can be stretched, misrepresented, or not offer the whole truth.