Buying a Home in Toronto: Step-by-Step Process Explained
Your complete roadmap to purchasing a home in Toronto, from pre-approval to closing day in 2026.
Buying a home in Toronto is one of the most significant financial decisions you'll make. With average home prices exceeding $1.1 million in 2026, understanding each step of the process—from securing financing to navigating bidding wars—is essential for success in this competitive market.
This guide walks you through the 7 essential steps every Toronto home buyer must take, including timelines, costs, and expert tips to avoid common pitfalls.
The 7-Step Home Buying Process
- 1.Get Pre-Approved for a mortgage (1-3 days)
- 2.Research Neighborhoods and define your criteria (1-4 weeks)
- 3.View Properties and attend open houses (2-8 weeks)
- 4.Make an Offer with conditions (1-3 days negotiation)
- 5.Complete Home Inspection and finalize financing (7-14 days)
- 6.Hire a Real Estate Lawyer and review documents (30-60 days before closing)
- 7.Close the Deal and receive your keys (closing day)
Total Timeline: 60-90 days from pre-approval to closing (varies by market conditions)
1Get Pre-Approved for a Mortgage
Why it matters: A pre-approval letter shows sellers you're a serious buyer and determines your maximum purchase price. In Toronto's competitive market, most sellers won't accept offers without proof of financing.
The mortgage stress test: As of 2026, you must qualify at the higher of your contracted rate + 2% OR 5.25%. This means if your actual rate is 5.5%, you'll be tested at 7.5%.
Documents You'll Need:
- ✓ Employment verification: 2 recent pay stubs, T4s, employment letter
- ✓ Income documentation: 2 years of tax returns (especially if self-employed)
- ✓ Down payment proof: 90-day bank statements showing savings source
- ✓ Credit check authorization: Lender will pull your credit report (680+ recommended)
- ✓ Debt obligations: Car loans, credit cards, student loans statements
- ✓ Government-issued ID: Driver's license or passport
Pro Tip: Work with a mortgage broker who shops rates from 30+ lenders instead of going directly to your bank. You could save 0.2-0.5% on your rate.
How Much Can You Afford? (2026 Toronto)
- • $100,000 household income: Max purchase ~$500,000 (20% down)
- • $150,000 household income: Max purchase ~$750,000 (20% down)
- • $200,000 household income: Max purchase ~$1,000,000 (20% down)
- • $250,000 household income: Max purchase ~$1,250,000 (20% down)
Assumes 5.5% interest rate, 25-year amortization, no other debts. Calculate your exact amount at RateHub's calculator.
2Research Neighborhoods & Define Your Criteria
Toronto's 140+ neighborhoods offer vastly different lifestyles, prices, and investment potential. Your choice impacts commute times, school access, future appreciation, and quality of life.
Key factors to consider: proximity to work/transit, school rankings (if you have kids), walkability, crime rates, future development plans, and average days-on-market for resale liquidity.
Top Family-Friendly Areas
- • Leaside: Top schools (Fraser 9.2+), parks, $1.8M avg
- • High Park-Swansea: Green space, tight-knit, $1.6M avg
- • North York Centre: Condos, transit, schools, $750K avg
- • East York-Danforth: Value play, improving, $1.2M avg
Sources: TRREB, Fraser Institute
Best Value Suburbs (GTA)
- • Ajax/Pickering: GO Train access, $900K avg houses
- • Oshawa: Affordable entry, $700K avg houses
- • Brampton: Growing, diverse, $1.1M avg houses
- • Vaughan: New developments, highway access, $1.5M avg
Commute Trade-off: Expect 45-90 min to downtown Toronto via transit/car.
Research Tools: Use HouseIndex's MLS browser, Walk Score for walkability, and Toronto Police crime stats for safety data.
3View Properties & Attend Open Houses
Plan to view 10-20 properties before making an offer. This gives you a realistic sense of what your budget buys in different neighborhoods and helps you identify red flags (foundation cracks, outdated systems, layout issues).
What to Look for During Viewings:
✓ Structure & Systems
- • Foundation cracks or water damage
- • Roof age (20-25 year lifespan)
- • HVAC system age and condition
- • Electrical panel (100A minimum)
- • Plumbing (copper/PEX good, galvanized bad)
✓ Livability & Layout
- • Natural light and room flow
- • Storage space (closets, garage)
- • Noise levels (street, neighbors)
- • Parking availability and type
- • Lot orientation (north/south/east/west)
Pro Tip: Visit properties at different times (morning, evening, weekend) to assess traffic, noise, and neighborhood activity. Check City of Toronto's planning database for upcoming developments that could impact your investment.
4Make an Offer (With Conditions)
Toronto's market reality: In competitive neighborhoods, 60-70% of homes sell above asking price, often with 10+ competing offers. You need a strategic approach to win without overpaying.
Standard Offer Conditions (Safeguards):
- Financing Condition: Gives you 5-7 days to secure final mortgage approval. (Often waived in bidding wars—risky!)
- Home Inspection Condition: Protects you from hidden defects. Budget $500-800 for inspector. (Also often waived—proceed with caution)
- Status Certificate Review (Condos): Your lawyer reviews condo corporation finances, bylaws, reserve fund. (10-day condition typical)
- Sale of Buyer's Property: Only if you must sell your current home first. (Makes your offer less competitive)
How to Win a Bidding War Without Overpaying:
- • Know the comparable sales: Research recent sales of similar homes in the area (your agent can pull this)
- • Set your absolute maximum: Write it down before bidding to avoid emotional decisions
- • Use odd numbers: Offer $1,001,500 instead of $1,000,000 to edge out round-number bids
- • Include a personal letter: Humanize yourself—some sellers care about who buys their home
- • Be flexible on closing date: Accommodate the seller's timeline if you can
- • Increase your deposit: Standard is $10K-25K, but $50K+ shows serious commitment
5Complete Home Inspection & Finalize Financing
If you included an inspection condition, hire a licensed home inspector within 24-48 hours of offer acceptance. Attend the inspection—it's a 2-3 hour educational opportunity to understand your new home's condition.
What Inspectors Check:
- ✓ Roof, attic, insulation
- ✓ Foundation, basement, structure
- ✓ HVAC, plumbing, electrical
- ✓ Windows, doors, exterior
- ✓ Appliances (if included)
Cost: $500-800 for houses, $400-600 for condos
What They DON'T Check:
- ✗ Sewer line condition (get separate camera inspection)
- ✗ Asbestos/mold testing (requires specialist)
- ✗ WETT inspection for wood-burning systems
- ✗ Pool/hot tub functionality (winter closures)
- ✗ Buried oil tanks (older rural properties)
Budget $200-500 extra for specialized inspections if needed
After inspection: If major issues arise (e.g., $15,000 roof replacement needed), you can either:(1) renegotiate the price, (2) ask seller to fix it, or (3) walk away if condition was included.
Finalize your mortgage: Submit the fully executed purchase agreement to your lender. They'll order an appraisal ($300-400) to confirm the property's value supports your loan amount. If appraisal comes in low, you may need to increase your down payment or renegotiate.
6Hire a Real Estate Lawyer & Review Documents
In Ontario, you MUST use a lawyer to complete a real estate transaction. Hire one within days of offer acceptance—they typically charge $1,500-2,500 for standard residential transactions.
What Your Lawyer Does:
- ✓ Reviews and explains all legal documents (Agreement of Purchase and Sale, title deed)
- ✓ Conducts title search to ensure seller legally owns the property with no liens or encumbrances
- ✓ Calculates Land Transfer Tax (Ontario + Toronto if applicable—see breakdown below)
- ✓ Registers your ownership with the provincial land registry
- ✓ Handles transfer of funds from lender to seller on closing day
- ✓ Provides title insurance ($250-400) to protect against title defects
Land Transfer Tax Calculator (Toronto)
Toronto buyers pay double land transfer tax (Ontario + Municipal). Here's what you'll owe:
- • $500,000 home: $6,475 Ontario + $6,475 Toronto = $12,950 total
- • $1,000,000 home: $16,475 Ontario + $16,475 Toronto = $32,950 total
- • $1,500,000 home: $27,475 Ontario + $27,475 Toronto = $54,950 total
🎉 First-time buyers save up to $8,475 ($4,000 Ontario + $4,475 Toronto rebate)!
Calculate exact amount: WOWA LTT Calculator
7Close the Deal & Receive Your Keys
Closing day is when ownership legally transfers to you. This happens at your lawyer's office (you won't meet the seller). Your lawyer will call you once funds are transferred and title is registered—usually between 2-5 PM.
Your Closing Day Checklist:
- ✓ Wire your down payment + closing costs to lawyer (1-2 days before closing)
- ✓ Obtain home insurance policy and provide proof to lender (required before closing)
- ✓ Do a final walk-through (24 hours before closing) to ensure property condition matches agreement
- ✓ Set up utilities transfer (hydro, gas, water, internet) for closing day
- ✓ Keep your phone handy for lawyer's call confirming closing
- ✓ Pick up keys from your agent or seller (arranged in advance)
Total Closing Costs Breakdown (Toronto):
Budget 1.5-4% of purchase price for closing costs beyond your down payment:
- • Land Transfer Tax: $13,000-55,000 (depending on price)
- • Legal Fees: $1,500-2,500
- • Home Inspection: $500-800
- • Appraisal Fee: $300-400
- • Title Insurance: $250-400
- • Moving Costs: $500-2,000
- • Utility Connections: $200-500
Example: $1,000,000 home = $33,000-40,000 in closing costs (on top of $200,000 down payment)
Congratulations, you're now a homeowner! Keep all closing documents in a safe place—you'll need them for tax purposes, insurance claims, and future resale. Consider setting up a home maintenance fund ($200-300/month) for unexpected repairs.
Common First-Time Buyer Mistakes to Avoid
- ✗Maxing out your pre-approval: Just because you're approved for $1.2M doesn't mean you should spend it all. Leave room for life, savings, and unexpected costs.
- ✗Skipping the inspection to win: Waiving inspection is gambling with your life savings. If you must compete, at least do a pre-inspection before offering.
- ✗Buying based on staged photos: Always view in person. Wide-angle photos make rooms look 20-30% larger than reality.
- ✗Ignoring closing costs: Many first-timers focus only on down payment and forget about $30,000-50,000 in additional closing costs.
- ✗Emotional decisions: Don't fall in love with a house during the first viewing. Sleep on it, view it again, and compare it to other options.