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Buying a home in Canada & Bank Accounts

Buying a home in Canada & Bank Accounts

Old Mar 29th 2021, 5:28 pm
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Default Re: Buying a home in Canada & Bank Accounts

Originally Posted by dogstar View Post
I have to say that having discovered what the market is like in Ontario it is somewhat disheartening DMajor . We may well have to rent and hope that the market does cool down at some point and whilst waiting is frustrating and no guarantee that it will happen may be the better option. We're really keen on Oakville but may have to re-evaluate and consider an alternative location that is more sensibly priced, if such locations exist.
I understand that your wife will be working in Toronto - was there a reason for selecting Oakville? What do you like about it and where are you looking at there?

Unfortunately prices have gone through the roof even in my city - which is around an hour from Toronto.. mostly due to others being priced out of the market in Toronto, Oakville, Mississauga etc., and moving further around the golden horseshoe.

From my post on another thread..
Originally Posted by Siouxie View Post
House prices in my blue collar worker city have gone through the roof.......

Hamilton was identified among five housing markets across the country — Toronto, Ottawa, Moncton and Halifax — seeing pricing surges and other market conditions that raised their risk assessment, according to CMHC’s quarterly assessment.

The housing market “continued to display a high degree of overall vulnerability” from the previous quarter, according to the report, with a spike in the usual number of “move-over buyers,” or those from nearby regions, the report notes.

Compared to last year, the average four-bedroom detached house has gone up in price by about 27 per cent to $1 million, and a three-bedroom home has gone up 33 per cent to about $844,000
To put that it context - a family member purchased a 3 bedroom detached bungalow in a good area 10 years ago for $197,000 - one of many they had seen in that price range (and cheaper).
Burlington would be my choice if you need to commute - it has direct transit to Toronto; a beach, there are some reasonable Brit pubs, restaurants, parks - rib fests and other festivals, amongst other things - and it's still cheaper than Oakville.. with a town feel rather than a city feel. (or Hamilton, but it's not much cheaper now!). You could also consider Georgetown or one of the other smaller towns a little inland or go to the other side of Toronto - how will your wife commute? Transit or own vehicle?
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Old Mar 29th 2021, 7:00 pm
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Default Re: Buying a home in Canada & Bank Accounts

Originally Posted by dogstar View Post
Hi Folks,

Hope you are all well and staying safe in the present circumstances and I'm hoping someone knowledgeable here can help me with a situation I am trying to understand and navigate.
My wife and I along with my children plan to immigrate to Ontario this year from the UK as it has always been our goal to do so and build a life out there together for our family. My wife is a Canadian citizen and I have obtained PR status whilst my kids possess dual nationality. We want to settle in Ontario as my wife will be working in Toronto and and have decided on Oakville as our preferred location.

The housing market in Ontario is currently nuts and homes are being snapped up very quickly and unfortunately favouring the seller rather than the buyer. We have been monitoring listings and engaged a Realtor formally who will work with us to find and close a sale as and when we find the right home. We have agreed that we will capitalise on technology wherever possible to virtually view homes we are interested in and given the circumstance currently probably a good thing as physical viewings are restricted by some sellers. Whilst this is not optimum we are happy that we can view and "kick the tires" from a distance and our Realtor will serve as our hands and eyes on the ground.

Now the issue I need to get my head around (hopefully with your insights) is how can I get a deposit from the UK into Canada whilst we are here so that we can act quickly if we find a home we want? Reaching out to TD Bank earlier today it seems that whilst I can apply for an account from the UK online I cannot activate it until I visit a branch in person in Canada so that seems like a non-starter.

Sellers expect Bank Drafts to appear quickly when an offer is accepted therefore this compounds things along with the fact the houses are selling very quickly. Whilst theoretically we could make the move and rent for a short period before finding a home I'd rather have one to go to from day one. Appreciate this is not perhaps conventional but that's how we roll;-)

Any advice/insight greatly appreciated!
Some brokerages (more now since Covid) will allow a wire transfer of your deposit. I have done it once with a rental client from the US who wire transferred the deposit. Your Realtor should be able to help you with that and they need to put a clause in the offer describing how the deposit will be paid and how long it would take to arrive as the default is by cheque and within 24 hours of acceptance. You would also need to check limits on transfers with your bank ahead of time so you are ready to go when needed. Time is of the essence in real estate transactions, so if that deposit doesn't arrive on time you are in breach of contract and, in the worst case scenario, the Seller can sell to someone else and sue you for the deposit (you would be unlucky for that to happen but legally it can). Your biggest issue would be that in a bidding war, Sellers expect to see proof of the bank draft, before Covid they would want the actual draft to be delivered with the offer, now they ask for a photograph of the draft. We are seeing more and more people starting to put in several offers at the same time and then simply not delivering the deposit on the properties they don't want if they win the bids on more than one. They, mistakenly, believe that if they don't deliver the deposit then the deal is off, they are actually opening themselves up to be sued for the deposit amount, and potentially any losses the seller experiences in reselling the property.

The listing prices, at the moment mean absolutely nothing so please don't calculate affordability for you based on those. If a sellers agent thinks his house is worth $1.25mi for example it would be listed at anywhere between 999k and 1.199k, it will likely sell in the $1.3mi range. Houses in that price range (which in Oakville is your basic 3-4bedroom, single car garage detached family home) have gone up over 300k in the past 9 months. The first hour of my day is now full of 'you have got to be kidding me' when I see the sale prices from the day before. It is mind blowing.

As you have probably gathered, I sell real estate in Oakville, I have been doing so for the past 11 years and I lived there for 14 years. I have been in an example of practically every house style in Oakville, I have driven down most if not every street and I still don't trust photos and virtual tours. They are great for getting an idea of the ones you want to actually visit but to make a decision to spend over a million dollars, I personally would not. Google street view etc. help, but houses have a feel, some feel really great and others just don't feel like home. The number of times I have taken a client into a house that they have been so excited about after seeing the virtual tour, only for them to decide they hate it the second they walk in the door.

I shall be watching in a month or so, when the houses that have sold for particularly ridiculous prices are due to close to see how many of them don't either due to buyer's remorse or them not being able to get financing because the house doesn't appraise out to what they paid for it. We had a similar situation in 2017 when the market went crazy and then adjusted, a lot of people didn't close, those cases are going through the courts now - it is an interesting read.

Further note: this is intentioned as general information only, it is in no way meant to interfere with the arrangement you have with your realtor in Oakville.

Last edited by HGerchikov; Mar 29th 2021 at 8:07 pm.
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Old Mar 29th 2021, 7:44 pm
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Default Re: Buying a home in Canada & Bank Accounts

Thank you for the response Siouxie and I am grateful for all the replies thus far. We decided on Oakville because overall we like what it has to offer our young family and in particular the schools within the area. As we are from London we are used to the City life and would like to be close enough to the hustle whilst not so far as to leave us feeling more remote. We looked at various other locations including Burlington and on balance we think Oakville is the most suitable although the house prices right now don't lend themselves to endorsing that view. My wife will be working in close to University Avenue (Toronto) and will be making use of the GO Trains driving is not ideal due to parking etc but would be preferable in an ideal world. I personally like the fact Oakville is close to the lake and whilst not an essential definitely nice to have.
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Old Mar 29th 2021, 8:01 pm
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Default Re: Buying a home in Canada & Bank Accounts

Originally Posted by dogstar View Post
Thank you for the response Siouxie and I am grateful for all the replies thus far. We decided on Oakville because overall we like what it has to offer our young family and in particular the schools within the area. As we are from London we are used to the City life and would like to be close enough to the hustle whilst not so far as to leave us feeling more remote. We looked at various other locations including Burlington and on balance we think Oakville is the most suitable although the house prices right now don't lend themselves to endorsing that view. My wife will be working in close to University Avenue (Toronto) and will be making use of the GO Trains driving is not ideal due to parking etc but would be preferable in an ideal world. I personally like the fact Oakville is close to the lake and whilst not an essential definitely nice to have.
I worked at University and College. I would have found the commute from Oakville agonizing. First the drive, then the GO train, then the zoo like change at Union, awful. I did commute there from southern Mississauga for a while, I drove rather than endure that (though I did have a parking spot as a perk),. Mainly though, when working in Toronto, I lived in Toronto, first downtown, then in Leslieville, then in the Beach. That was easier and allowed the children a degree of independence that they couldn't have in the suburbs.
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Old Mar 29th 2021, 8:05 pm
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Default Re: Buying a home in Canada & Bank Accounts

Thank you HGerchikov for your reply and I am grateful for the insight you have shared and fortunate that you live in Oakville also. I found out about deposit cheque screenshots the other day and am aware of what sellers expect to see ("show me the money"). I'm coming round to the view of being there in person to check things out as I do believe that is the best way and as you state it's potentially a shed load of money at stake. The points you make definitely resonate with me and I shall share them with my wife and we shall consider the implications as best we can. Can you elaborate on the point you make about financing and lower appraisal value? I thought that once the deposit is paid then the working assumption is that a mortgage will be in place?

Many Thanks





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Old Mar 29th 2021, 8:11 pm
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Default Re: Buying a home in Canada & Bank Accounts

Originally Posted by dbd33 View Post
I worked at University and College. I would have found the commute from Oakville agonizing. First the drive, then the GO train, then the zoo like change at Union, awful. I did commute there from southern Mississauga for a while, I drove rather than endure that (though I did have a parking spot as a perk),. Mainly though, when working in Toronto, I lived in Toronto, first downtown, then in Leslieville, then in the Beach. That was easier and allowed the children a degree of independence that they couldn't have in the suburbs.
University Avenue is where she'll be located, I was of the understanding that Union Station is the last stop?
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Old Mar 29th 2021, 8:16 pm
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Default Re: Buying a home in Canada & Bank Accounts

Originally Posted by dogstar View Post
University Avenue is where she'll be located, I was of the understanding that Union Station is the last stop?

University runs north/south and has a subway line under it. If she's going to work at the south end, or is fit, should could walk from Union. It depends how far up she has to go and how much tolerance for beggars she has.
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Old Mar 29th 2021, 8:16 pm
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Default Re: Buying a home in Canada & Bank Accounts

Originally Posted by dogstar View Post
Thank you HGerchikov for your reply and I am grateful for the insight you have shared and fortunate that you live in Oakville also. I found out about deposit cheque screenshots the other day and am aware of what sellers expect to see ("show me the money"). I'm coming round to the view of being there in person to check things out as I do believe that is the best way and as you state it's potentially a shed load of money at stake. The points you make definitely resonate with me and I shall share them with my wife and we shall consider the implications as best we can. Can you elaborate on the point you make about financing and lower appraisal value? I thought that once the deposit is paid then the working assumption is that a mortgage will be in place?

Many Thanks
Ideally before you go shopping for a home you should have a pre approval in place for a mortgage, that is basically where a mortgage professional has looked at your income and outgoings and tells you that they would be prepared to lend you x amount at an interest rate of y. Many people think that provided they buy a house within that budgeted amount then all will be well. There is a second part though and that is how much is the lender prepared to give for a particular property. They aren't going to lend you 800k (even if you qualify for 950k) on a house that is only worth 750k. If you default on your payments they are going to lose money when they foreclose and sell. That is what the financing condition is for, it gives your lender 5 business days to look at the property and say yes we are good to lend you what you need to buy this particular property. The problem is that, to get a place, people have not been including the finance condition and, in some cases the lenders are valuing at much less than the buyer paid and the buyer has to find the difference - if they don't have it then its a huge problem.

I, personally, think that financing conditions (unless buyer can prove he does not require financing) and inspection conditions should be mandatory in all offers, unfortunately they are not. However it is great for lawyers.

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Old Mar 29th 2021, 8:18 pm
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Default Re: Buying a home in Canada & Bank Accounts

Originally Posted by dbd33 View Post
University runs north/south and has a subway line under it. If she's going to work at the south end, or is fit, should could walk from Union. It depends how far up she has to go and how much tolerance for beggars she has.
Roger that!
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Old Mar 29th 2021, 8:23 pm
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Default Re: Buying a home in Canada & Bank Accounts

Originally Posted by HGerchikov View Post
Ideally before you go shopping for a home you should have a pre approval in place for a mortgage, that is basically where a mortgage professional has looked at your income and outgoings and tells you that they would be prepared to lend you x amount at an interest rate of y. Many people think that provided they buy a house within that budgeted amount then all will be well. There is a second part though and that is how much is the lender prepared to give for a particular property. They aren't going to lend you 800k (even if you qualify for 950k) on a house that is only worth 750k. If you default on your payments they are going to lose money when they foreclose and sell. That is what the financing condition is for, it gives your lender 5 business days to look at the property and say yes we are good to lend you what you need to buy this particular property. The problem is that, to get a place, people have not been including the finance condition and, in some cases the lenders are valuing at much less than the buyer paid and the buyer has to find the difference - if they don't have it then its a huge problem.

I, personally, think that financing conditions (unless buyer can prove he does not require financing) and inspection conditions should be mandatory in all offers, unfortunately they are not. However it is great for lawyers.
One reason I wouldn't get into a deal like this from far away is that the banks will willingly give you debts no honest man can pay. I think it would be very difficult to judge living costs remotely to the accuracy required to say "I could live with a repayment of $3500/month", or whatever amount, without knowing how much the car insurance costs, do I need a subway pass, all of that. The bank cares about the loan to value ratio but not so much if the customer goes bust; you don't want to end up on the Coast City bus.

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Old Mar 29th 2021, 8:26 pm
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Default Re: Buying a home in Canada & Bank Accounts

Originally Posted by dbd33 View Post
University runs north/south and has a subway line under it. If she's going to work at the south end, or is fit, should could walk from Union. It depends how far up she has to go and how much tolerance for beggars she has.
The guy that used to stand outside of 500 University was more likely to notice, and comment, if I had a new outfit than my husband was.
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Old Mar 29th 2021, 8:27 pm
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Default Re: Buying a home in Canada & Bank Accounts

Originally Posted by HGerchikov View Post
The guy that used to stand outside of 500 University was more likely to notice, and comment, if I had a new outfit than my husband was.
Now that's professionalism.
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Old Mar 29th 2021, 8:33 pm
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Originally Posted by dbd33 View Post
One reason I wouldn't get into a deal like this from far away is that the banks will willingly give you debts no honest man can pay. I think it would be very difficult to judge living costs remotely to the accuracy required to say "I could live with a repayment of $3500/month", or whatever amount, without knowing how much the car insurance costs, do I need a subway pass, all of that. The bank cares about the loan to value ratio but not so much if the customer goes bust; you don't want to end up on the Coast City bus.
Thanks for clarifying that for me and that makes sense. Wondering how rigorous the appraisals are currently under covid and I have been led to believe some are just done externally to give the lender assurance. We have been able to obtain an "agreement in principle" so do know how much the lender is prepared to lend and have been also considering the running costs on top of any repayment. Fortunately we have family in Ontario and elsewhere in CA who have been able help us understand along with the fact my Mrs is Canadian.
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Old Mar 29th 2021, 8:41 pm
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Default Re: Buying a home in Canada & Bank Accounts

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Old Mar 29th 2021, 9:18 pm
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Default Re: Buying a home in Canada & Bank Accounts

Originally Posted by dogstar View Post
Thanks for clarifying that for me and that makes sense. Wondering how rigorous the appraisals are currently under covid and I have been led to believe some are just done externally to give the lender assurance. We have been able to obtain an "agreement in principle" so do know how much the lender is prepared to lend and have been also considering the running costs on top of any repayment. Fortunately we have family in Ontario and elsewhere in CA who have been able help us understand along with the fact my Mrs is Canadian.
I think the rigor of the appraisal is dependent on the lender and the status of the buyer. If they are comfortable that they will easily recover their outlay should the property need to be sold, and you are not close to the loan to value ratio that would trigger a CMHC insurance requirement (ie less than 20% down) then they may be happy to do a desk study to determine value. Appraisers are still going out to properties though.
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