Everyone has their own reason for buying a house in London, Ontario. Perhaps you’re squeezed out of the shrinking rental market and need the security of a place of your own. Maybe you realize you can’t buy in other Ontario communities, because the homes are just too expensive. You could already be an area resident, but want a bigger home for a growing family, or a smaller one as you near retirement.
Whatever your reasons, buying a house in London, Ontario is a big step and we want you to breeze through the process with as few problems as possible. The Ultimate Guide to Buying a House in London, Ontario can help you do just that.
When to Buy a House in London, Ontario
Potential buyers often think if they wait a better deal might be right around the corner, but that’s not a realistic or practical way to make a major purchase decision. After all, no one can predict the future and even the “experts” get it wrong.
While the state of the housing market, interest rates, and the community can affect your purchase, buying is more about you. You need to be emotionally and financially prepared, stable, and willing to spend considerable time and energy on your home.
Whether you’re an experienced homeowner or a first-time buyer, the steps of buying a home are very similar. However, first-time home buyers typically need more preparation and guidance to find what they can afford within their budget.
Unless you can pay for the entire home in cash, you’ll need substantial savings. Current homeowners usually have available funds once they sell their existing home. However, first-time home buyers must save a “down payment” to secure a property and qualify for a mortgage.
A conventional mortgage requires 20 percent down, but high-ratio mortgages also exist which require as little as 5 percent. However, high-ratio mortgages include additional fees for private mortgage insurance. Additionally, when you put less down on your home you’ll have a bigger mortgage and higher payments, but if you’re in a good financial position this usually isn’t a problem.
Remember, you don’t want to empty your bank account when you buy a home. You’ll need additional money for fees and an emergency fund if something unexpected happens. Experts recommend a minimum of two month’s living expenses, but preferably more.
Finally, buying a house in London, Ontario is a commitment since you’re investing a great deal of money. Building equity on a home takes time too, so you probably shouldn’t consider buying unless you intend to stay put for at least a few years. Otherwise, you’ll eat up any profits in fees when you sell.
Owning a home also requires ongoing maintenance. When you rent, the landlord tends to the hot water tank, fixes the roof, and replaces appliances. When you own a home, you pay these costs and shovel the walks and clean the gutters. Any homeowner will tell you, it takes plenty of work to care for a home properly.
Having said all this, owning a home also offers incredible freedom. You can decorate and landscape to suit your tastes and make it uniquely yours. It can provide security, build wealth, and eliminate rent payments.
Historically, most people buy in London, Ontario in May and June. Homeowners tend to list when their properties show well and they know more buyers take advantage of the longer days and warmer weather.
However, buying during these busy months means more competition. This is especially true in London, with fewer listings than in previous years. Buyers need to up their game to secure a sale and can do this by using a top-notch real estate agent.
While you don’t need a real estate agent to buy a home, it offers serious advantages in a competitive market. A good local agent knows what sold recently and the prices and often hears about properties before they’re listed. If you’re flexible, they may be privy to homes going up for sale in fall or winter with less competition that could save you thousands of dollars too.
London, Ontario is a popular place to buy. Money Sense ranked it ninth in the top Canadian cities to buy real estate, and rightfully so. With an average national home price of $564,031 and homes in the GTA averaging $731,878, London’s overall average of $366,096 offers considerable savings. To navigate a hot market, you need to beat out the competition and that’s tough to do without preparation and expert help.
A professional real estate agent works for you and finds properties that suit your needs. They’ll line up viewings as soon as possible so you see homes before others snap them up. They can determine a fair bid and submit an offer immediately if you see a property you want.
Since they have plenty of experience, they can also suggest ways to improve your chances of success. When your agent matches your offer to the seller’s expectations, you can often beat out the competition.
A good real estate agent has strong negotiation skills and industry expertise. They can suggest small changes such as increasing your deposit or setting terms to make it more attractive to the seller to help you clinch the sale. In a tough buyer’s market, it doesn’t make sense to go it alone. The seller pays the real estate commission, not you.
Cost of Buying a House in London, Ontario
We mentioned the average price of a home in the London and St. Thomas area was $366,096 in May. That’s an increase of 6.4% over 2017 and good news for you if the trend continues and you want to sell.
Like all communities, housing prices vary between neighbourhoods. London North had the highest median price of $451,556 and St. Thomas had the lowest at $288,723. London South and East fall in between. With such a huge range of price points you may be able to find a home for far less than London’s overall average.
We mentioned you’ll have other secondary expenses when buying a house in London, Ontario. Typically, your lawyer’s fees will be your greatest expense. Fees vary based on the complexity of your purchase, whether you buy a single-family dwelling or a condominium, and the lawyer you choose, but a safe budget is between $1,000 and $2,000.
Land Transfer Tax is another expense you need to budget for, but if you’re a first time home buyer you could receive a rebate of up to $2,000. Otherwise, use this land transfer tax calculator to determine the amount.
You may also pay home inspection fees, GST and HST, a utility registration fee if you’ve never used local service providers, property tax, and interest. Of course, you’ll pay to move and you may need to buy tools, furniture, appliances, or pay for upgrades for your home too.
Brainstorm and prepare a realistic budget for your “must-haves” so you’re not left short. If you have no idea where to start, we provide a checklist to determine what’s most important to you later in this guide.
Securing Financing for Your New Home
It is absolutely imperative you’re prepared when trying to buy in the London, Ontario market. Pre-approval shows a seller you’re a serious, motivated buyer ready to move. All too often, buyers see a property they like and want to buy, but they do not have mortgage pre-approval. Someone else comes along who’s prepared and snaps their dream home out from under them. Don’t be that buyer.
You need to closely examine your financial status to determine whether you can afford to buy and whether a lender will loan you money first. This is why most experts recommend reviewing your finances with a good mortgage broker or your bank before you look at homes.
Many people go to their bank first, but they only sell their products and they may not be the best products for you. A mortgage broker accesses many products on your behalf and does not charge a fee. They can explain each mortgage type, such as adjustable and fixed-rate, your repayment options, and your risks so you fully understand your options. The lowest rate isn’t always the best choice if doesn’t suit your lifestyle or risk tolerance.
A broker will also help you accumulate the documents you’ll need to satisfy the lenders, check your credit report, and suggest solutions if they find any issues. You may still qualify for a mortgage even if you have less than perfect credit and your broker can also suggest ways to improve your credit score. Most lenders require proof you have funds to pay the additional fees involved in the purchase process too; about 1.5% of the purchase price.
Related: How To Increase Credit Score Quickly With Seasoned Tradelines
Once everything’s in order, they’ll crunch the numbers and pre-approve you for the maximum you can borrow based on your financial data. Typically, pre-approval locks in the interest rate for 120-days, but there’s no commitment to buy and you do not have to spend the entire amount even if you do. You can ask for pre-approval more than once if interest rates drop too.
Choosing a London, Ontario Neighbourhood
We already discussed that the average price point in each London, Ontario neighbourhood differs, but so does the character and amenities.
North London has many historic brick homes with high ceilings, fireplaces, and hardwood floors. You’ll also find new family homes and contemporary condos for singles and young professionals.
View Houses For Sale In North London
The tree-lined streets and easy access to the Thames River Parkway make it a popular choice for nature and sports enthusiasts. The many amenities and community pride make it a very desirable area and properties hold their value well. You’ll find universities, schools, shopping, dining, and medical care nearby.
South London is a cultural and artistic neighbourhood featuring Wortley Village and Thames Park, the local hubs for festivals, concerts, and community events. It is one of the oldest areas of London, Ontario and offers a mix of single-family homes, duplexes, condos, and apartments.
View Houses For Sale In South London
This trendy area attracts artists, musicians, and free spirits, but it also offers plenty of outdoor activities for families and sports enthusiasts. Moderately-priced, but with endless character, this neighbourhood is a favorite of first-time buyers and retirees looking to downsize.
Byron rests on the largest urban park in London and features many private single-family homes and condos with sprawling yards ideal for pets and children, and light traffic. Even though woodlands and orchards surround this area, it doesn’t lack amenities. It has plenty of schools, bus connections, easy access to the Thames Valley Golf Club and the London core. It’s affordable, charming and ideal for singles and families.
The Uplands district is a masterfully-planned suburb with a mix of single-family homes and townhouses. Spacious, fenced yards, roomy interiors, and plenty of parking make this area an attractive choice for families.
View Houses For Sale In Upland's District
You’ll find many homes nestled into quiet cul-du-sacs or on well-lit, streets with set-back sidewalks. The Uplands Trail surrounds the community with paved walks and access to Masonville Place and RioCan Shopping centre.
Fox Field is a modern subdivision with single-family homes and townhomes and newly-built condominiums. Many feature open floor plans and high-end finishes.
View Houses For Sale In Fox Field
You’ll find several remarkable green spaces nearby: Fox Field District Park along the Snake River with beautiful walking trails and the Medway Valley Heritage Forest with floodplain forests, swamps, marshes and steep wooded slopes. You’re also a stone’s throw away from Hyde Park shopping center with large retailers such as Lowe’s, Wal-Mart, and Old Navy.
Consider Surrounding Cities
If you prefer a smaller community, but don’t want to sacrifice conveniences, consider one of the cities surrounding London, Ontario. Each has a unique character, but all offer vibrant communities and attractive homes.
Dorchester offers laid-back country living and an amazing choice of properties including quaint cottages, historic properties, and expansive, luxurious ranches.
View Houses For Sale In Dorchester
Fortunately, the area has not experienced the building boom of London, but that makes it more attractive to some buyers. It’s tight-knit, friendly, and welcoming. Even though it is a small community, it has everything you need including grocery stores, drug stores, gas stations, and banking.
Kilworth features large luxury homes with high-end finishes, gourmet kitchens, stainless steel appliances, and large lots. It is very rural and suited to retirees or families with mature children, since there are limited amenities nearby. However, a short 7 minute drive to Byron offers everything you need, or get a bit of exercise and cycle in less than half an hour.
View Houses For Sale In Kilworth
Komoka lies 20 minutes west of London, but it is worlds apart in ambiance and charm. This former railway town offers a simpler, quieter life and a healthy, safe environment for families. Many homes are very affordable and the community has several new developments catering to families which offer value and room to grow.
You’ll also find the newly-built Komoka Wellness Centre with two NHL-sized ice rinks, a fitness centre, and a gym.
View Houses For Sale In Komoka
Just a half an hour’s drive north of London you’ll find the friendly community of Lucan Biddulph Township. With easy access to Lake Huron and the 402, it offers country living in reach of major centers and recreational areas.
This township has a real country feel, with a main street complete with all the essential amenities. The nearby Lucan Memorial Center with an ice rink and large gym offers activities for all ages. Home prices are very affordable and suit first-time home buyers, retirees, and growing families.
Ilderton is a mere 9-minute drive from London’s Fanshawe Park Road. It’s ideal for young families, first time homeowners, and empty nesters since amenities are right on your doorstep. The area’s surrounded by nature and offers both modern and traditional brick homes.
View Houses For Sale In Ilderton
Well-known for its Fall Fair, curling club, and nearby conservation area, it offers a wide price range, an assortment of homes, and unbeatable convenience.
Buying a Home Checklist
Use our checklist to help guide you through the many decisions when buying a house in London, Ontario or any of the surrounding communities.
Determine what you must have and what you're willing to sacrifice
Rate the following areas from 0 to 5, with 0 indicating it isn’t important and 5 a must-have. Home buyers rarely find a home that has it all.
Home Type: Single dwelling___ duplex___ condo___ townhouse___ acreage___ Rural ____ Urban _____
Large Kitchen _____
Family Room _____
Number of Bedrooms _____
Number of Bathrooms: _____
Fireplace _____
Master Bathroom _____
Walk In Closet _____
Finished Basement _____
Garage ___
Storage Room _____
Schools Nearby _____
Public Transportation Nearby _____
Shopping Nearby _____
Parks Nearby _____
Sports & Recreational Facilities Nearby _____
Close to downtown core _____
Close to work ______
Quiet Street _____
Large Lot _____
Landscaped ______
Fenced ______
Match Your Needs To Potential Neighbourhoods
Matching your needs to potential neighbourhoods can help a real estate agent understand precisely what’s important to you. They may know other areas that offer similar homes at a better price point.
- Does the neighbourhood offer homes within your price range?
- Does the neighbourhood offer the amenities you need?
- Do the home styles appeal to you?
Find a Real Estate Agent
- Are they recommended by someone you trust?
- Do they focus on the home type and price range of the home you want to buy in the London and surrounding market?
- Can they provide you with testimonials from clients, especially ones who bought homes similar to what you’re looking for?
- Do they clearly explain how they’ll look for properties, keep you informed, advise you and represent you during the buying process?
Get Mortgage Pre-Approval
- Broker or bank?
- Can someone recommend a person they worked with?
- Review finances, credit report, collect documents, and rectify problems
- Choose mortgage type, repayment terms, and discuss down payment
- Check eligibility for first-time home buyer RRSP withdrawal
Home Inspection
- Can the real estate agent recommend a qualified home inspection service or arrange an inspection?
- How much does it cost and what’s included?
- What are the options when problems exist on the report?
Secondary Expenses
Do you have sufficient money set aside to pay the following fees?
- Legal fees
- Tax, utility, and interest closing adjustments
- Home inspection
- Land transfer or property purchase tax
- Hookup charges for utilities and cable
- Homeowner’s insurance
- Mortgage insurance
- Moving expenses
First Time Home Buyer? Listen to These 3 Tips.
Or check out this extensive infographic!
Infographic Design By Susan & Troy Susan & Troy: Sedona Real Estate Agents
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Team Forster is part of a fully accredited real estate brokerage regulated by the Real Estate Council of Ontario (RECO). We adhere to the Real Estate and Business Brokers Act, 2002, government guidelines and statutes, and a strict code of ethics.
We know the London, St. Thomas, and surrounding communities and their real estate markets. Let Team Forster guide you through the buying process so you can find a home you cherish. Our team of real estate professionals live and work in the area and we know real estate.
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