12 Tips for Buying a House in Ottawa
Written By Liam Swords
12 Tips for Buying a House in Ottawa
If you’re looking to buy a home in Ottawa, you might be a little confused about where to start. It’s a competitive market after all, and let’s face it, buying a house is never easy.
In this article I will share my best tips for buying a house in Ottawa. I’ll also break down the steps of how to buy a house in Ottawa.
Get 20+ years of home-buying secrets I’ve used with over 500 clients, so you can get your dream home for the price you want
Access For Free12 Tips for Buying a House in Ottawa
This advice is something I share with all of my clients, whether they are buying their first home or if they’re an experienced buyer.
Regardless if you’re moving to Barrhaven, Kanata, Nepean or elsewhere in the city, these are my favourite tips for buying a house in Ottawa.
1. Identify Your Needs vs. Wants
Before you even begin thinking about buying a home, it’s a good idea to take some time and reflect with yourself and your partner (if you’re buying together with a special someone) on what you need in a home, and what might be cool to have, but not absolutely necessary.
Needs
Maybe both you and your partner have a car, in which case it might be a must that your new home has two parking spaces. Or maybe you can’t bear the thought of having just one bathroom to share with the whole family, so a minimum of two bathrooms is a must-have.
Wants
Now take a minute to think about this. If you’re not planning to have kids in the near future, maybe that second bathroom isn’t all that necessary, but just nice to have.
And other things too – maybe you want a fireplace, a study room, an attic, a basement, an open kitchen, and an en suite bathroom. Ask yourself, before you begin planning your buy, how many of your checklist items are wants and not needs.
Because you’re not always going to get everything, especially with today’s housing prices. It’s often said in real estate that an 80% solution means perfection. If a potential home has 80% of your wants (and all of your needs, of course), then it’s a golden opportunity, and it might be a great idea to decide to buy!
2. Consider Your Timeline
“So when can I move in?” is often the first question we hear from excited Ottawa first-time home buyers when they finish viewing a perfect-looking home.
And, fortunately, if you’re relocating to Ottawa, there’s usually a simple answer to that. The typical closing date for Ottawa home sales is 60 days, so as a rule of thumb, you can expect to be able to move in approximately two months after the agreement of purchase and sale, and you’ve made a down payment.
If you’re buying a new home in Ottawa, the time to buy will likely be much longer since new construction homes are usually sold well in advance.
Down payments are typically required within 24 hours of a home purchase offer being accepted and must be paid in liquid funds. That is, cash, check, or electronic bank transfer. So you’ll need to have these funds available and ready to go before making an offer on a house. Though it can vary a bit depending on the sale price, the typical down payment for a home in Ottawa is about $10,000.
The next payment timeline you’ll need to keep in mind is the land transfer tax, which is due within 30 days of closing. The land transfer tax is an important factor to consider when considering the cost of buying a home, as it’s typically between 1% and 2.5% of the total price of your home and must be paid upfront in liquid assets.
3. Understand Ottawa’s Real Estate Market
Now that you’ve made a list of your wants and needs and know when you can realistically plan a move, it’s time to take a glance at what’s available on the Ottawa property market.
It’s no secret that real estate prices can be high (as with the general cost of living in Ottawa), so doing some searches and making sure you can afford a home within your criteria will help you prepare yourself for the next steps. The average home in Ottawa sells for 98% of the list price, so there is some room for negotiation, but not too much.
At this point, it might be a good idea to enlist the help of an Ottawa real estate agent. A knowledgeable agent can set up a portal for you that will search your criteria among listings on multiple sites and give you tips to narrow down your search and find the golden opportunity.
There are about 4,000 realtors in Ottawa, and the best agents will have personal connections with many of them. So a good agent can not only help you find homes online, but might also be able to show you some excellent houses for sale that aren’t publicly listed, or “pocket listings” as we call them in the industry.
4. Get Pre-Approved
When purchasing a home or buying a condo in Ottawa, you can’t expect a seller to accept your offer without getting pre-approved.
Almost all home sellers will require pre-approval from a bank or mortgage broker, especially if you’re buying your first home. Getting pre-approval is fairly fast and straightforward.
A bank or mortgage broker will examine your credit score, history, and assets and provide you with the maximum dollar amount you’re eligible to borrow for a mortgage.
Many even provide this online at no extra cost. As long as the amount you’re pre-approved for is the same or higher than the value of your home, it usually means you’re able to buy it.
5. Cast Your Net Wide
Once you begin the process of calling sellers and viewing properties, our number one tip is to adopt an abundance mentality. As we mentioned – you’re not going to get everything you want.
So rather than putting all your eggs in one basket, once you see one perfect listing and fall in love, schedule a number of viewings for properties that match your criteria and keep your options open.
We always recommend that you schedule viewings as close together in their calendar as possible, not only to make things easier in your schedule, but also to make it easier for your mind to remember what you liked and disliked about each viewing and avoid confirmation bias. A good real estate agent can help you set up an optimal viewing schedule.
6. Don’t Be Afraid to Knock on Doors!
As we mentioned, many of the best houses for sale in Ottawa aren’t listed publicly. While a good Ottawa real estate agent will have connections and can usually pull a few strings to find some of these “pocket listings,” not even the best agent will know everything.
The only way to find those golden offers that not even the best agents know about is to go through good old-fashioned word of mouth. Don’t be afraid to take a walk through your ideal neighbourhood and ask around. You can go door to door, or ask locals at a neighborhood bar, diner, grocery store, or community center.
Neighbours will know when neighbours are selling, and if you introduce yourself as a friendly home buyer looking to move into the neighborhood, they’ll probably be happy to help. Don’t be shy – Ottawa is known to be a city of good neighbours, after all, and if you’ll soon be living in Ottawa, it’s best to meet your future neighbours!
7. Walk the Neighbourhood
Walking the area is a crucial step when buying a house in Ottawa.
There have been many times I’ve helped someone buy a home who has skipped this step, but they ended up having a nuisance such as high traffic from school busses since they moved right near a school.
Small things like this can be forecasted if you walk and drive the local area a few times before purchasing.
This simple act provides invaluable insights into what life would be like living there. Here are some reasons why it’s essential:
You get to see the types of homes, street conditions, and overall aesthetic, helping you determine if the community fits your lifestyle.
Observe the proximity of essential amenities like grocery stores, schools, parks, and public transportation, which is particularly important in walkable Ottawa neighbourhoods.
8. Send a Family Letter
While not always required, we also recommend that home buyers in Ottawa prepare a family letter, as it can make a significant difference when buying a home. This is essentially your cover letter, except instead of explaining to an employer why you’re a good fit for a job opportunity, you’re explaining to the seller why you are a good fit to buy their house.
Tell them who you are, what you do for work, and why you want to live in this home and neighborhood. This small step can elicit an emotional response from the seller, and especially if it’s your first home in Ottawa, this can really make a difference.
9. Learn How To Negotiate
Most homes don’t sell for their list price and usually there is some wiggle room for the seller to come down on their price. In fact, I save my average client over $21,000 on their home purchase when I negotiate with the seller.
If you want a masterclass on how to buy your dream home for the price you want, you can download my Home Buying Secrets here.
Here are a few tips I go over in the guide.
- Collect Intel – You need information to give yourself leverage in a negotiation. Find out why they are selling, the closing date, title history, and similar houses that sold recently. Once you have this information, you can use it to your advantage.
- Anchor Your Offer – Write the offer how you want to see it. You’re not expecting the seller to take this offer. Load up the offer with reasonable conditions and terms, at a much lower price, then you’ll come up. However, don’t go too low.
- Use One-Liners – One liners are key phrases that re-frame the negotiation in your favour. You can use these at crucial times. For example, you could say “We can buy any home, you can only sell this home”. I frequently use one-liners throughout each negotiation.
Get 20+ years of home-buying secrets I’ve used with over 500 clients, so you can get your dream home for the price you want
Access For FreeOttawa First Time Homebuyer Tips
Now if you’re buying your first home in Ottawa, I have a few additional tips for you.
10. Take Advantage of Incentive Programs
As a first-time home buyer in Ottawa, you can benefit from several programs that make buying a home more affordable.
- The Ontario Land Transfer Tax Refund can give you back up to $4,000 on the provincial land transfer tax for homes under $368,000.
- The Home Buyers’ Plan (HBP) lets you withdraw up to $35,000 from your RRSP tax-free to use for your down payment.
These incentives can really help reduce your upfront costs and make owning a home in Ottawa more achievable.
11. Get Professional Guidance
It’s no secret that a real estate agent would recommend using an agent to buy a home. However, especially as a first-time home buyer, there are so many components to buying a home that can be very overwhelming, and they can help you avoid crucial mistakes that will save you lots of time and money.
12. Take Your Time
Buying a house is a big decision, so don’t rush into it. Take the time to research different neighbourhoods, think about your lifestyle and future plans, and really evaluate each property. Rushing can lead to missing important details or settling for a home that isn’t quite right.
The last thing you want is to be 6 months into owning your home and looking to sell because you rushed the process and missed something you would’ve otherwise seen.
Steps to Buying a Home in Ottawa
In addition to the tips above, I’ve guided countless clients through the home-buying process. and here are the steps you’ll want to follow when buying a home.
1. Save for a Down Payment
Getting a mortgage loan is usually necessary. With mortgages, you’ll need to make a down payment, which is typically a percentage of the home’s price. You’ll need to determine how much house you can afford. In Ottawa, most homes require a down payment of less than 20%, but keep in mind that anything below 20% means you’ll have to pay for mortgage default insurance.
For homes priced over $1 million, you’ll typically need to put down at least 20% of the purchase price as a down payment. For example, if you’re purchasing a home for $1 million, you’d need a down payment of at least $200,000.
If you opt for an insured mortgage, you can make a down payment of less than 20%. Insured mortgages require you to pay for mortgage default insurance from a mortgage insurer, and they’re only available for homes under $1 million. With this type of loan, you can get away with a down payment as low as 5%. Just keep in mind that you’ll have to pay an additional one-time fee for the mortgage default insurance premium, which can range from 2.8% to 4.0% of your total mortgage amount.
With an insured mortgage, also known as a high-ratio mortgage, the minimum down payment is 5% for homes under $500,000. For homes between $500,000 and $1 million, the minimum down payment is 5% of the portion below $500,000 and 10% of the portion above $500,000.
2. Improve Your Credit Score
Your credit score plays a critical role in securing a mortgage with favorable terms. I’ve seen deals fall through at the last minute due to credit issues, so it’s essential to ensure your score is as high as possible.
Pay your bills on time, keep your credit utilization low, and avoid applying for new credit unless necessary. A score above 700 will open doors to better mortgage rates, which can save you thousands over the life of your loan.
3. Get a Mortgage Pre-Approval
As mentioned, getting pre-approved for a mortgage is non-negotiable in Ottawa’s fast-moving market. This step shows sellers you’re serious about purchasing and gives you a clear budget to work with. I’ve had clients lose out on homes because they weren’t pre-approved when a competing offer was.
Don’t make the same mistake. Take the time to gather your financial documents and submit an application to a lender. The pre-approval letter you receive will be your ticket to making a strong offer.
4. Consider a Real Estate Agent
An experienced real estate agent is invaluable, especially in Ottawa where pocket listings and off-market deals are common. We have networks and insights that can give you access to properties before they hit the MLS.
This can be particularly beneficial in popular neighborhoods like the Glebe or Westboro, where homes often sell quickly. I’ve helped clients find their dream homes by leveraging these connections and providing them with early access to listings.
5. Start House Hunting
Once you have your budget set and a real estate agent by your side, it’s time to start looking at homes. Know your must-haves versus nice-to-haves. In my experience, location and a good foundation are key. I’ve seen clients regret passing on a great location for superficial features that could easily be changed.
Consider factors like commute times, local amenities, and future development plans. Ottawa’s neighborhoods vary significantly, so it’s important to find one that aligns with your lifestyle.
6. Make an Offer
In Ottawa, especially in popular neighborhoods, you often need to move fast. I’ve seen properties sell within hours of listing. Be prepared to make decisions quickly, but don’t skip due diligence.
Your real estate agent will help you determine a fair offer price based on comparable sales and draft the offer, including any conditions like financing or home inspection. In a competitive market, it’s crucial to put your best offer forward.
7. Get a Home Inspection
Never skip this step. I once had a client insist on waiving the inspection to win a bidding war. They later discovered major foundation issues that cost tens of thousands to repair.
A home inspection can identify potential problems and provide leverage for further negotiations if issues are found. It’s a small upfront cost compared to the peace of mind and financial protection it offers.
This can be a condition in the offer
8. Negotiate the Deal
The next step is negotiating the deal. I went over some tips earlier that you can use in your own negotiations. Sometimes, the best deal isn’t just about price. I’ve won bidding wars for clients by offering flexible closing dates or not asking for minor repairs.
Be open to creative solutions that can give you an edge. Your real estate agent will be invaluable during this process, helping you navigate negotiations to reach a fair agreement.
9. Close the Deal
The final stretch can be stressful. Stay organized and responsive. I’ve seen delays caused by simple oversights like forgetting to transfer funds on time. Trust your team and stay focused on the finish line.
Your lawyer will handle the legal aspects, ensuring everything is in order for a smooth closing. Be prepared for closing costs, which typically range from 1.5% to 4% of the purchase price.
Get 20+ years of home-buying secrets I’ve used with over 500 clients, so you can get your dream home for the price you want
Access For FreeWhat to Know Before Buying a Home in Ottawa
If you’re buying a house, Ottawa can be a great city to live in, but there are a few things you should know beforehand.
- Developments: Ottawa’s real estate landscape is evolving with major projects like the LRT expansion and the Senators’ potential move to LeBreton Flats. The LRT is enhancing accessibility and spurring transit-oriented development, potentially increasing property values near stations. The Senators’ agreement to purchase land in LeBreton Flats for a new arena could transform downtown, creating a mixed-use neighborhood with new homes, parks, and restaurants.
- Ottawa’s Land Transfer Tax: Unlike some cities, Ottawa has both provincial and municipal land transfer taxes, which can result in higher overall costs for homebuyers compared to regions with only provincial tax. First-time homebuyers may be eligible for a rebate to help offset these costs.
- Government Employment: As the national capital, Ottawa’s real estate market is significantly influenced by federal government employment. Periods of government expansion often lead to increased housing demand, while hiring freezes or reductions can have the opposite effect. The government’s hiring practices and potential office relocations can impact demand for housing in specific areas of the city.
Rules to Buy a Home in Ottawa
If you’re buying a home in Ottawa, rules can dictate how you go about it. Here are some key things to consider.
- Down payment requirements:
- 5% for homes under $500,000
- 5% on first $500,000 + 10% on remainder for homes $500,000 to $999,999
- 20% minimum for homes $1 million and above
- Pass the mortgage stress test at the higher of your contract rate plus 2% or 5.25%
- Meet debt service ratio limits: typically 39% GDS and 44% TDS for insured mortgages
- Obtain mortgage default insurance if down payment is less than 20%
- Budget for closing costs, typically 3-4% of the home’s purchase price
Final Thoughts on Buying Your First Home in Ottawa
If you’re looking at buying a house in Ottawa but still feeling a bit confused or overwhelmed by the process, maybe it’s a sign that you should speak to one of the best real estate agents in Ottawa.
Liam Swords has been selling homes and working with Ottawa house buyers for over 20 years and can come up with a home buyer’s plan based uniquely on your needs. And satisfaction is guaranteed! If for any reason you’re not satisfied with the home we’ve found for you within the first year, we’ll help you sell it at no cost.
If you want to see how we can help, contact us or give us a call today, and we’ll set up a consultation right away to get you into your dream home in Ottawa as soon as possible!
Liam Swords is an accomplished real estate agent in Ottawa, having sold over 1,000 homes. As the team leader of Liam Swords Team, he combines extensive market knowledge with a commitment to client satisfaction.
