The Ultimate Guide to Buying Your First House in Toronto

Embarking on the process to buy a house in Toronto is a huge milestone. It’s no doubt the culmination of a lot of hard work, saving, and plenty of daydreams that has led you to the moment where you are ready to start house hunting. A lot of emotions are involved with this process, and it’s completely normal to feel a little anxious but also be buzzing with excitement.

As a Toronto Realtor who specializes in working with first time home buyers, I’ve had the opportunity to guide many clients through the purchase of their first house.

Whether this is your first time buying a property, or you’ve owned a condo and this is your first house purchase, you might be feeling overwhelmed by all there is to know about the market and the home buying process. That is why I’ve created this guide, so that I can break it all down into simplified steps.

Let’s get started!

How to Buy a House in Toronto

Getting Started

The beginning of the house-buying process often feels like the most daunting part as it can be difficult to discern what your first steps should be and who you should talk to.

Luckily, we can simplify this for you by breaking it down into 3 relatively easy steps, which once complete, will give you a strong foundation and a guided path forward from there.

Step 1: Choose Your Agent

A buyer’s agent is your trusted guide and advisor. They are responsible for learning your goals and understanding your situation in order to help you find a home that suits your needs and wants. More than that, they look out for your best interest while viewing homes and during offer process to ensure you are fully informed about the house you’re interested in, and ultimately so that you obtain the best deal and favourable terms. They handle the lion’s share of the paperwork and walk you through the process, all while answering your questions and making sure you feel confident in your decisions.

Tip: Work with a buyer’s agent who brings more than just market knowledge. A strong buyer’s agent can connect you with trusted mortgage professionals, lawyers, and other key vendors, helping you build a reliable home buying team from day one.

Need more help on what to look for in a great Buyer’s Agent? Jump right into the following post:

Step 2: Get Pre-Approved

In Toronto’s competitive housing market, a strong mortgage pre approval does more than set your budget. It helps you plan your payments and puts you in a position to submit a more competitive offer when the situation calls for it.

Step 3: Prepare Your Deposit

Everybody knows that you need a down payment to buy a house, and depending on the cost of the home, that down payment will likely be in the range of 10 – 20% (or more) of your purchase price.

However, many buyers are less aware of having to provide a deposit.

Tip: Planning to put less than 20% down? In that case, your lender will require mortgage default insurance.

The deposit is the upfront portion of your down payment that’s payable shortly after offer acceptance, often within 24 hours. It’s delivered to the listing brokerage and held in trust until closing. Toronto deposits are typically a minimum of 5% of the purchase price, and having that money liquid and easily accessible will allow you to move quickly when the right home comes along.

Questions First-Time House Buyers Should Ask

Many first-time home buyers have a ton of questions circling in their heads, and others feel lost about what questions they should be asking. When it’s your first time buying a house, it’s hard to know what you don’t know!

There are a variety of questions you should ask each of the professionals you work with along the way, but since we are just getting started, let’s focus on some key questions to ask your real estate agent:

What is the real estate market like right now for the type of house and neighbourhood I want to buy in?
What are all the costs involved when buying a house?
How long does it take to buy a house?

Each question you ask, and ultimately receive expert guidance on, will further clarify the process for you and help you feel confident in moving forward. And remember … there are no bad questions! Ask what you need to ask. Realtors who specialize with first-time home buyers are prepared and eager to answer all your questions, and they expect lots of them.

Want to take a deeper dive into anything discussed above? Here are some videos and posts to explore:

The Financial Side of Buying a House

In the previous section I talked about why it’s important to consult with a mortgage professional to obtain your pre-approval ahead of time, as amongst other things, you must understand your maximum purchase price before you start house hunting.

However, to truly understand what your maximum purchase price might be, you also need to know how much of your available funds will be allocated toward your down payment and other closing costs.

Understanding Your Down Payment

When you purchase a house, the purchase price is made up of two parts: your down payment and your mortgage.

Your down payment is the amount of cash you have available to put toward the purchase of your home, and there are specific rules around the minimum amount required. Depending on the price of the house, the minimum down payment will range between 5% and 20%.

It’s also important to understand that if you’re putting down less than 20%, regardless of the purchase price, you’ll be required to obtain mortgage default insurance to protect the lender. This is known as a high ratio mortgage.

Finally, a portion of your down payment will be due within 24 hours of your offer being accepted. That portion is called your deposit. In Toronto, the deposit is typically a minimum of 5% of the purchase price, and I go into more detail about how this works in this post:

Costs Associated with Buying a House

There are several costs involved in buying a house beyond the purchase price. Understanding them before you start shopping will help you determine what you can realistically spend on the house itself, what needs to be set aside for closing and related expenses, and ultimately how to avoid unexpected financial stress.

Here’s a summary of the key cost categories to be aware of:

Land Transfer Tax – A tax paid on closing that is calculated as a percentage of the purchase price. In Toronto, buyers pay both a provincial and municipal land transfer tax, but luckily first time buyers may qualify for a Land Transfer Tax discount (which is called a rebate). Calculate potential taxes here.
Legal fees – These cover the work your real estate lawyer does to complete your purchase, such as reviewing documents, conducting title searches, and registering the transaction.
Home inspection – Although optional, a home inspection can provide valuable insight into the condition of the home and help you avoid unexpected problems after closing.
Title insurance – A one-time fee that protects you (and your lender!) from any title-related problems that could arise.
Appraisal fee – Some lenders or mortgage professionals will cover this fee, but if you need a mortgage on the house you’re buying, you may need a home appraisal to confirm its value.
Mortgage Default Insurance – If you purchase a home with less than 20% down payment, you’ll need to pay for this insurance to protect your lender’s risk. The cost of mortgage default insurance can be wrapped into your mortgage, but the PST on it is due in a lump sum on closing.
Closing Adjustments – These are reimbursements to the seller for expenses they have already prepaid that extend past your closing date, such as property taxes or rental fees for items like a hot water tank.
Moving Costs – Remember to budget for packing supplies, hiring movers, renting a truck if needed, and purchasing any furniture or new home decor you’ll want after you move in.

Appraisal vs. Pre-Approval

In the list of aforementioned house buying costs, I mentioned that you might need to pay for an appraisal on the home. This warrants a call-out in its own section as it’s an important part of the home buying process that isn’t talked about enough.

When you buy a house, and need a mortgage, your lender is accessing risk by looking at two pieces of the puzzle – the home buyers (you), and the home itself. Not only does the lender need to ensure that you are qualified and able to make the mortgage payments, but they also need to ensure that the house you purchased is worth what you paid for it. If the appraisal comes in low, the mortgage that the lender will be willing to provide you might be lower than you thought you’d receive (and less than you need).

This is one of the reasons why it’s so important that you do not over-pay for a property, and you can learn more about this in my post about appraisals.

Some Good News for First Time Buyers: Reading through the above “costs” section may have felt over-whelming. Now would be a good time to review the programs and perks available for first time home buyers.

Make sure you completely understand the financials involved with the purchase of your house, by exploring these topics further:

The House Hunting Stage

Let’s move on from the financials and onto something more exciting – shopping for your house!

Your Realtor will set up a search in the MLS and start sending listings that match your criteria, and this is when things begin to feel real. Now it’s time to tour homes in person, see what stands out, and decide whether you can truly picture your life there.

That said, it’s important to keep a level head and pack away those rose-coloured glasses when possible. Touring houses can be emotional, but your Realtor will bring an objective perspective. They’ll point out the features that align with your wants and needs, while also highlighting potential concerns and areas that need maintenance, so you can make a well-informed decision.

In freehold homes especially, pay close attention to the major systems and structure. The basement, roof, foundation, plumbing, and electrical all matter. The basement often reveals the most, as this is the level where the house mechanicals reside, signs of moisture might be present, and restrictive ceiling heights can limit the usability.

While viewing houses with a critical eye is important, a home inspection can provide a much deeper understanding of the property’s condition. In the next section, we’ll break down how inspections work and what you should expect.

Seller Inspections vs. Buyer Inspections

When you find a house you’d like to purchase, it is ideal to either conduct your own home inspection on the property, or at the very least to view a home inspection report that has been provided by the sellers.

Seller Inspections

Homes listed for sale, particularly those that have stated offer dates (more on that later), will often have what’s called a “pre-list home inspection report” that they will provide to all interested buyers. This is a report that was generated by a home inspector that the seller hired and is shared with buyers to give them a better understanding of the house.

In some cases, this might give you the confidence to submit an offer on the house without including a condition permitting you to conduct your own inspection. However, in other cases, it might not be enough to accomplish this, and you might still want to do your own inspection.

Buyer Inspections

The best-case scenario is that you are going to be able to hire your own home inspector to inspect a house you’re interested in, before firming up on a purchase. This is typically accomplished by submitting an offer with a home inspection condition, which will allow you to conduct that inspection after the seller has accepted your offer.

Home inspections are an amazing tool to give you a better understanding of the house, but there are limitations to them. I break this down in the following video:

Home Buyer Tip: There are many questions you’ll want to ask various professionals during the home buying process. Review this post to learn about what questions to ask your home inspector.

Areas of Concern In Older Toronto Homes

Toronto is a beautiful and lively city with a rich history and a lot of older homes. I’m talking 100+ year old homes. However, that doesn’t have to be a bad thing, as it’s the older homes that tend to house most of the character and charm. With that said, there are a few common areas of concern that you should watch out for in these older homes.

Knob and Tube Wiring

Knob and tube wiring was commonly installed in homes built roughly between the 1880s and 1940s, and while it was standard at the time, it’s now considered outdated. It doesn’t include a grounding wire and wasn’t designed to handle the electrical demands of modern living, which can raise safety and insurance concerns. If you’re considering a house that was built during this timeframe it’s important to determine whether knob and tube wiring is still present.

Asbestos

Asbestos was widely used in building materials from the early 1900s through the 1980s, especially in insulation, flooring, and pipe wrap. While it’s generally not harmful if left undisturbed, damage or renovation can release fibers into the air that pose health risks. If you’re looking at an older house, it’s important to be aware of where asbestos might be present and factor the potential cost of testing and safe removal into your purchase decision. Linked here is a full post on this topic for more detail.

Termite Activity

Termites were first recorded in Toronto around 1938, are found throughout the city, and can quietly cause structural damage to a home’s wood framing and foundation. They feed on wood from the inside out, and signs of their existence include mud tubes, hollow-sounding wood, or discarded wings.

Untreated infestations can lead to costly repairs, so if you have reason to believe there might be termite activity in a house you are interested in, it would be worth considering including a termite inspection condition in your offer.

Seller Listing Strategies

When you start shopping for a home, you’ll quickly realize that sellers use a couple different listing and pricing strategies when they put their house on the market. While there are a variety of approaches sellers can take, the two most common ones are worth highlighting to give you your bearings and remove confusion.

List Price = Asking Price

This strategy is easy to understand. The seller will list their house for an amount that is their actual asking price (a price they would accept), and they will invite buyers to submit offers at any time.

List Price = Marketing Price

This is where it gets confusing. The seller will list their house at a low price and invite buyers to submit offers on a specific date and time – the offer date. The amount the house is listed at is typically an amount they will not accept and is essentially a marketing price aimed at attracting lots of buyers to their listing. The seller’s goal is to generate a lot of showings and a lot of offers on their offer date. As the offer process is often blind (competing buyers don’t know the content of other buyer’s offers), this can lead to a potential bidding war and an attractive sale price for the seller. This strategy also allows the seller to avoid setting a ceiling on their price upfront and instead let the market (the pool of buyers) decide what they are willing to pay for their house.

Interested in learning more about something reviewed in this section? Here are some posts to explore:

Making an Offer on a House

You’ve toured several homes, maybe visited a few open houses, and now you’ve found a house you love and would like to purchase. This is where things become strategic, and where the guidance of a strong buyer’s agent becomes especially important.

Offer Structure

Once accepted, an offer becomes a legally binding agreement between you and the seller, and it involves far more than just the price you’re willing to pay. The main sections of the offer include:

Purchase Price – The amount you’re offering for the house.
Deposit – The portion of your down payment due shortly after acceptance, typically within 24 hours. This demonstrates your commitment to the transaction.
Closing Date – The date you plan to take ownership and receive the keys.
Inclusions and Exclusions – Items that will remain with the home or be removed, such as appliances, light fixtures, or window coverings.
Conditions – Specific due diligence that must be satisfied after acceptance, such as financing or a home inspection.
Clauses – Additional terms that clarify or modify the agreement, such as requests for specific repairs, access to the property, or documentation to be provided by the seller.
Irrevocable Time – The deadline by which the seller must respond if they want to accept your offer.

Understanding Offer Conditions

Conditions are specific terms that must be satisfied after your offer is accepted for the deal to move forward. They provide you with the opportunity to do your due diligence before you become fully committed to the purchase. There are many different possible conditions, but the two most common ones for house buyers are financing (confirming that you will receive your mortgage) and home inspection (having a professional assess the condition of the property).

Including conditions can give you peace of mind and a clear path to walk away if something significant comes up during your due diligence, however keep in mind that they are not “outs” for unrelated reasons or cold feet. Watch this video for a deeper breakdown:

Crafting A Winning Offer

A well-crafted offer on a house takes strategy, especially in a competitive market like Toronto where multiple offers are common. The goal is to present a professionally organized offer with terms that appeal to the seller while still protecting your interests and staying within your budget. The following tips are some of the most effective ways to strengthen your offer and improve your chances of getting it accepted.

Offer a competitive price based on recent comparable sales rather than just list price.
Align with the seller’s preferred closing date when possible.
Prepare your deposit ahead of time and send a photo of the bank draft with your offer.
Submit a clean and firm offer when appropriate, especially if your financing and inspection due diligence are already done.
In some cases, a personal letter to the seller can add emotional appeal.

Before You Offer: At a certain stage in the process, backing out of a house purchase is no longer an option without consequences. Make sure you understand the rules and legal implications in Ontario before moving forward with an offer.

Want to get a closer look at the topics covered in this section? Here are a couple videos and posts to elaborate:

Understanding the Closing Process

Once your offer has been accepted and you’ve satisfied any included conditions (if applicable), you will have a firm purchase agreement in place and you are now in the “Contract to Close” portion of the process.

Steps To Complete Before Closing

There are several important steps that take place between receiving an accepted offer and your closing day. It can feel like this is where the real work begins, but you won’t be navigating it alone. Your Realtor will guide you throughout the process, and your mortgage professional and lawyer will also play leading roles during this stage. Here is a general overview of what happens before closing.

Your mortgage professional will coordinate with your lender and lawyer and they ensure your mortgage funds are ready to be advanced in time for closing day.
Your real estate lawyer will handle the legal transfer of the property, they will review the title, they prepare and register all required documents, and they ensure funds are properly transferred on closing day.
You’ll coordinate practical details such as setting up utilities for your new house, arranging home insurance, booking movers, gathering packing supplies, and preparing for your move.
You’ll have the opportunity to visit your new house before closing. These are called “Buyer Visits” and I talk more about them in the next section.

Your lawyer’s role includes creating a “statement of adjustments” which is a detailed breakdown that ensures both you and the seller pay your fair share of property-related costs such as property taxes and pre-paid utilities. They are called closing adjustments.

Property Visits Before Closing

An important part of the pre-closing stage is your access to the property through what are commonly referred to as buyer visits. Your right to these visits, along with the number permitted, is outlined in a clause included in your offer and now forms part of your agreement.

These visits are a great opportunity to take measurements for furniture, plan paint colours and décor, and even bring in contractors to obtain quotes for any work you’re considering after taking possession.

It is also prudent to save one visit for what’s known as the final walkthrough, which usually takes place within 48 hours of closing. The purpose of this visit is to confirm that the property is in the same condition as when you purchased it. During the walkthrough, you’ll test appliances, run faucets and drains, check major systems, and ensure that all agreed upon inclusions and exclusions have been properly addressed.

The Big Day: Closing

Closing day is the day the property officially transfers into your name, and you become the legal owner of the house. It’s a very exciting milestone! Most of the heavy lifting has already been done, and on closing day itself, your main responsibility is simply to be available in case your lawyer needs to reach you.

Behind the scenes, your lawyer is coordinating the legal and financial transfer of the property. They confirm there are no outstanding liens or title issues, receive mortgage funds from your lender (if applicable), transfer all funds to the seller’s lawyer, and register both your ownership and mortgage with the land registry office.

Once everything is completed and funds have been confirmed, you’ll receive instructions for key pickup, which typically happens later in the afternoon. While the timing can vary, once registration is complete, the home is officially yours!

Do you have more questions about any of the specific items covered here? Check out some of our other videos and blogs for an even closer look:

Ready to Buy Your First Home?

Buying your first house in Toronto is a big step, and while the process can feel complex at times, it’s also an incredibly rewarding journey. Whether you’re just starting to explore the idea or you’re already pre-approved and ready to begin your search, having the right Realtor by your side can make all the difference.

With a service driven approach and an emphasis on clear, practical guidance, our team is proud to be a trusted and ultimate resource for first time house buyers in Toronto.

Looking for help buying your first house? Get in touch with us today by filling out the form on this page, calling us at 416-909-9235, or emailing info@yaelandco.com.