Buying a home involves more than finding a place you like. You will need to work with professionals, make a legal offer, and complete steps in a homebuying process before you can move in. This page explains who can help you, how the buying process works, what to expect when making an offer, and how to prepare for possession day. Understanding these steps can help you avoid surprises and feel more confident as you buy a home.
Need to know
- Buying a home is a big financial and lifestyle decision. Take time to understand what it involves.
- Homeownership has advantages, but also long-term costs and responsibilities.
- Make sure your budget can handle mortgage payments, utilities, taxes, repairs, and surprise expenses.
- There are many types of homes and ownership. The three most common home ownership types are freehold, condominium and cooperative. Each comes with different costs and legal responsibilities.
- Think about your goals, financial situation, lifestyle and whether buying is the right choice for you.
Homeownership pros and cons
Before buying, it helps to take time to think about the advantages and disadvantages of owning a home. Everyone’s situation is different. Your goals, income, job stability, savings, credit, family needs and lifestyle all matter. You may decide that buying a home is the right choice for you or maybe not the right choice for you.
Advantages
Many people like owning a home because:
- They have more privacy.
- There is no landlord to deal with.
- Homes may increase in value over time, helping build equity.
- Monthly housing costs can be more predictable and stable than renting if you have a fixed-rate mortgage.
- There is pride in ownership, and it can help you have a stronger connection to the community.
Did you know?
Research shows that there are potential advantages that home ownership can bring you including:
- Homeowners often feel more control over housing and their lives.
- Families may have more opportunities to join community activities such as clubs or volunteer organizations, and to spend less time with electronics.
- Owning a home can improve physical and psychological health, as well as benefit children by providing stability.
- Housing stability (often associated with homeownership can lead to increased political participation).
Disadvantages
There are also challenges to consider with owning a home:
- Homeownership is a long-term financial commitment.
- You are responsible for all maintenance and repairs — from small fixes (like a broken toilet) to big, expensive ones (like replacing a roof).
- Moving becomes harder because you must sell the home first. It may also be more difficult to suddenly pick up and leave a location, especially if you have home ties to your community.
- MortgageMortgage Mortgages are loans given to you by a financial institution so you can buy a home. When you take out a mortgage, you agree to pay it back over a set period of time (called a term), usually by making monthly or bi-weekly payments. payments are often higher than rent.
- You need money upfront for a down payment, closing costs, and moving.
- A home’s value does not always go up.
Did you know?
Research shows that there are potential disadvantages with owning a home:
- Building equity is not a sure thing and depends on many factors. For example, you may not be able to purchase in a neighborhood that is likely to see an increase in property values in the near future.
- There is no significant evidence showings homeownership is a good asset building strategy for low-income families.
- Some households sell for less than what they paid for their homes, resulting in a loss rather than gain in equity.
- Advantages are more likely only if a household can save enough extra money to support their family and survive emergencies.
Homeowner responsibilities
Owning a home comes with ongoing responsibilities that take time, energy, and money.
These may include:
- Making all mortgage payments on time. Falling behind can lead to foreclosure.
- Budgeting for home ownership expenses including utilities (water, heat, electricity, internet, etc.), property taxes, and home insurance.
- Keeping up with repairs and maintenance –for example, painting, doing repairs, yard work or cleaning. You may spend your “free” time on home upkeep instead of doing other things, or else having enough money to hire someone to do it for you.
- Keeping up with and following local bylaws when it comes to your property –for example, following property maintenance standards and shoveling snow.
- Being involved in your community and local issues.
Thinking honestly about these responsibilities can help you decide whether you’re ready.
Home and ownership types
Deciding whether to buy a home is only part of the decision-making process, as there are many different home and ownership types, for you to think about. Not all homes or properties are the same, and they also come with different legal responsibilities.
Home types
Single-detached
A single-detached home is a free-standing home which sits on its own lot, has its own title, and has no attached dwellings either above or below it. It also has open space on all sides, and is not attached to any other structures except its own garage or shed. This category includes:
- Bungalows: Homes that are built on a single level, with a basement equal in size to the main floor.
- Bi-levels: These homes are also known as raised bungalows. Once you enter the front door, there will be a short staircase leading up to the main level, and another short staircase leading down to the basement.
- Split-levels: The easiest way to think of these is to imagine a bungalow that has a second level half the size of the main floor.
- Two-storey: These homes contain a basement and two above ground floors.
Semi-detached
A semi-detached home is a dwelling that is one of a pair which share a common wall either back-to-back or side-to-side. Each home is either built on its own lot, or else has its own title, making it two separate homes that happen to share a wall. Often, the floor plans of each side are mirror images, so inside bedrooms or living rooms may be touching
Duplex
A duplex is two units, on the same lot, either upper and lower or side-by-side. This means there is only a single lot or title, but with two separate living areas. Each unit can be owned separately, although sometimes the owner of the property will live in one unit and rent out the other.
Row or Townhouse
A row or townhouse is one of three or more dwellings that join side-to-side by common walls, and often multi-storey. Townhouses can be condominiums, but they can be set up as freehold units.
Link or Carriage
A link or carriage are either condominium or freehold homes, which feature large garages or carports on the ground floor, and living space on the levels above. While there may be a small space between neighboring homes, builders sometimes join basement walls which make link houses appear to be semi-detached homes on small lots.
Hi-rise or low-rise multi-unit buildings (condominiums)
Multi-storey residential buildings containing condominium units. These often feature shared common entrances to the building, and separate doors into the individual units themselves.
Mobile or manufactured
A mobile or manufactured dwelling are factory-built, pre-fabricated, single-detached dwelling that you can transport to your chosen location and placed on a foundation.
Tip
If you wish to know more about a specific home type, or whether it might be right for your situation, we encourage you to talk to a Realtor® or expert who can give you more detailed information.
Home ownership types
When it comes to homeownership, there are also options to consider, and they each bring their own advantages and disadvantages. The following are three of the most common types: freehold, condominium, and cooperative, with common pros and cons to think about for each type.
FreeholdFreehold A type of property ownership where you own the home and the land. With this ownership type, you are fully responsible for the maintenance and repair of the property and generally have the right to property alterations (as long as there are no civil bylaws or local planning rules restricting it).
This is the most common form of home ownership in which you own the home and land. Under this arrangement, you are fully responsible for all maintenance and repair on the property. There are no time limits on your ownership, as it is yours until you decide to sell it to someone else. Additionally, you are free to make any alterations to the property you want as long as they comply with local bylaws and planning restrictions.
Pros:
- You are the sole owner.
- Alterations or changes to the property can be done as you wish (as long as they comply with local bylaws and planning restrictions)
- You do not have to pay rent.
- There is no time limit to how long you can live in that home.
Cons:
- You are responsible for all property upkeep and maintenance.
- There is a responsibility to the local community and neighbours to keep your home and property in good repair.
- Generally, this type of homeownership has the highest cost of entry and is the most expensive.
CondominiumCondominium Legally, a condominium is a type of property ownership. Condominium ownership is unique because it is shared property ownership. When you buy a condominium, you get: Full ownership of the condominium unit (also known as freehold interest) Shared ownership of the common property (also known as tenants in common or co-ownership)
With this type of ownership, you get full ownership of the condominium unit (known as a freehold interest) and shared ownership of the common property. You often share in the cost and maintenance of common areas (for example, roofing repairs, clearing of walkways, lawn maintenance, etc.). Additionally, condominiums often come with a variety of amenities that a freehold dwelling may lack, such as built in gyms, pools, or heated parking. As a condominium owner, you must also follow condominium bylaws and rules.
Pros
- Condos are usually the least expensive form of home ownership.
- There may be fewer maintenance and repair responsibilities.
- Some condominiums have enhanced security, and neighbours are always close by in case of emergency.
- You have a say in the running of the condominium corporation. As an owner, you will have voting privileges and may be elected to the board of directors.
Cons
- You must pay additional condo fees.
- You may have less privacy, and noise could be a problem.
- As decisions are made by the board of directors and a vote by owners, you may end up paying for repairs or upgrades that do not directly benefit you.
- There may be restrictions on pets, as well as what kind of alterations you can make to your unit.
Tip
To learn more about condominiums laws, refer to CPLEA’s Condo Law for Albertans website. It contains legal information for Alberta consumers, condo owners and condo board members.
CooperativeCooperative A type of home ownership where you do not own the property, but shares in the corporation itself. As a shareholder, you have the right to the exclusive use of a single unit in that property, and you will also have a say in management of the property. (co-op)
Under a housing cooperative, you do not own the property, rather you own shares in the corporation itself. As a shareholder, you are entitled to the exclusive use of a single unit in that property, and you will also have a say in how the entire property is managed and run. Cooperatives are not the same as cohousing, where several people live together in one home.
Pros
- Cooperatives may be at market price or subsidized.
- Stability. Generally, cooperative buildings are not sold or flipped, and members will not be asked to leave unless they break the bylaws.
- Many cooperative have members/crews that take care of lawn and property maintenance.
- Some cooperatives have membership focuses, which result in buildings full of people with similar interests and backgrounds.
Cons
- Securing financing can be difficult, as you will not own the unit itself.
- Cooperatives can be more restrictive, and may have membership requirements.
- Most cooperatives forbid subleasing or subletting.
- Cooperatives may not be available in all areas.