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First Time Home Buyers (Toronto, Canada) - Where to Start?
SwashbucklerXX
Swashbucklin' CanuckRegistered User regular
Swashbucklin' CanuckRegistered User regular
So attempting to wait out the stupid real estate market in Toronto isn't working. Damn thing just won't go down. With my husband getting close to 40, we're going to need to buy our first home (probably a condo or townhouse) soon, and I'm not sure where to start. We need to find out what's realistic for our incomes and about any first-time homebuyer programs that are worth looking into. Do we start at the bank? At a realtor? Anybody been through first-time homebuying in Toronto and have any advice? I'm really out of my depth here and need to know what kind of professional to consult who isn't going to shaft us.
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I would first do some math. Tally up your take home income, and ALL your expenses. I emphasize the all part, as when I was doing my math, I missed quite a few things that I never considered, and they all added up. A good way to do it is to review your bank statements for a year and make a list of them. To make it simple, you can average them all into a set of monthly numbers. Try to figure out what your expected utility costs in a new place would be, if possible, or just use your current values, and pad them a little bit. You will also need to estimate what new annual expenses will arise from owning property, such as taxes and insurance. Then add in an "allowance" for each of you, or however you like to deal with personal spending money. Also, consider setting aside an amount that you would be comfortable with for saving for future household expenses. (Hot water tank blows out, stove need replacing, furnace died, etc.) Now, take your current rent for a month, if any, and add that in to the funds you'd have left in a month, and that should give you what you could afford for a monthly payment.
Keep in mind, with any kind of mortgage, you can have different payment schedules other than once a month, but I found it easier to start with that number, then work out what it'd be like switching to something like bi-weekly payments.
Unfortunately, as I had just moved all my paperwork to the house today, I don't have it on hand to demonstrate how I have my costs and income laid out, but I can try to get my lists later and post them.
After I had my list worked out of what I could afford per month, I made an appointment with my bank and got a mortage pre-approval. You could also make appointments with mortgage brokers, as they can often get you a better interest rate than what you may be able to negotiate personally with a bank. The savings on getting a few points lower increases with the price of your housing. Getting the pre-approval then gave me the amount that a financial institution would mortgage me up to, not including a down payment, and the interest rate I could get, so I knew what the maximum price range I "could" look at was. I say "could", because after running my numbers, what I was actually able to comfortably manage, financially speaking, for a house was well below what the bank would gladly lend me. Of course, I could have gone for something in a higher price range, but it would have required making greater sacrifices, and living a bit too close to the financial edge for my tastes. You will have to decided for yourselves what you are willing to live with, and without!
So, I began looking at the price of homes within that mortgage amount for sale in neighborhoods that I was willing to live in, and then plugged those prices into an online mortgage payment calculator, along with my interest rate, and got numbers for my monthly mortgage payment. I played around with lists of numbers for expenses and savings numerous times, and finally narrowed down what my maximum housing price was.
I got a realtor that I was comfortable with, and began the process of looking at houses for sale. I spent about 5 months of serious looking before a home came up for sale that I liked enough to settle on. Before that, I had spent about 2 years of on and off looking while I saved up a down payment. I made an offer that was lower than the asking price, since the market here right now is what is called a "buyers market", and I could afford to take the chance on it. In a sellers market, you may not be able to do that, since competition for buying new homes is much higher. Anyways, there were counter-offers made back & forth, and a conditional agreement was reached. I got the home inspection done, checked out what insurance would run, made sure the title was free and clear, researched the types of mortgages offered, choose the one I liked the best for me and got the full approval on it from the bank, hired a notary (or you can use your lawyer if you have one) for handling the transer of ownership, then I signed off on it all, and took possession of my house.
Make sure to check how the HST works in your province when it comes to the type of housing you are looking at. Any realtor you deal with should be able to inform you better than I can at the moment. I know that where I live, there was no HST on my house, as it was a resale home; not a new construction, and no renovations done within the past couple of years.
That's all I can think of at the moment. I'll try my best to answer any other questions you have, or to point in the right direction to where you can find them.
You are not throwing away money by renting!*
* depends on many factors; terms and conditions may apply
Here is some information. Keep in mind that I am not an expert so feel free to point out mistakes I've made in the first post and I'll try to change them as soon as possible. If you think I've left something out, let me know and I'll add it in!
Can I afford to buy a house?
Maybe. Here's how to look at it:
Step 0
Do you really want to buy a house? I mean REALLY? Here are some major downfalls you may or may not have considered:
- You can't just move to a new place if you get a better job or if your boyfriend/girlfriend wants to move. You can't move if you find out your neighbors are dicks. You can't move if they build a highway, water treatment plant, and Scientology center next to your neighborhood. You've paid out the butt to move into this house, and it won't be worth it unless you stay for at LEAST 5 years probably, just because of closing costs.
- You have to pay for everything that breaks or fix it yourself.
- You have to mow the lawn or pay for someone to do it.
- Utilities cost more
- Everything costs more
Step 1
Make a budget. Take a look at your credit card statement - you might be surprised that you spend $100 on coffee every month. Don't forget to include debt payments you'll need to start making in the future (like student loans). Now take a look at how much you're saving each month. Great! Hope that number is not negative.
Include a list of all your assets and debts. If you don't have any savings, you're not buying a house. Minimum down payments are over, 20% down payments are in. If you have less than that, you'll have to pay PMI (Private Mortgage Insurance) which costs a lot and is money you'll be throwing away every month that you wouldn't have to if you had a nice down payment.
Step 2
Check out some online calculators to see what you can afford. One rule of thumb is 2.5x your yearly income. Another rule of thumb says your mortgage payments should be less than 28% of your monthly income, another rule of thumb says your TOTAL debt payments (car, loans, mortgage) should be less than 36% of your monthly income, etc. etc. If you want some calculators to play around with, try here, here, and here. Pick the lowest estimate you end up with.
SlapActionJackson posted:
for the 28% rule, you should include Principal, Interest, Taxes, and Insurance (PITI) whether or not all of those things are included in the amount you send to the bank
Some factors to take into account:
- Mortgage insurance is tax deductible. This means a lot more to people who already itemize their deductions, but it might be much less for someone who is in a low tax bracket and who always takes the standard deductions. YMMV:
FidgetyRat posted:
Mortage Insurance is tax deductible, but it has some pretty low income requirements.
"families with adjusted gross incomes below $100,000 were able to deduct 100 percent of their mortgage insurance premiums while families with incomes up to $109,000 were eligible for a partial deduction." (And by partial, it drops pretty dramatically between 100 and 109k).
I believe this is currently in effect until 2010 (which likely will be extended again, but could very well be terminated by the gov't).
- PMI is sometimes included, sometimes not.
- Property tax is a HUGE chunk of what you'll be paying monthly. Check your state and city websites to see what the taxes are like, and also ask around because sometimes there are bonus property taxes in a neighborhood just because.
- If you're buying a house in a housing association, you'll have to pay a fee. How big is that?
- Utilities will go up, sometimes way up. I live in San Diego, so haha suck it, but if you're in Detroit a house will cost a shitton more to heat during the winter than an apartment. Take that into consideration.
Here's a rent vs. buy calculator if you want to see if renting is better or worse for you if you know about how much your house will cost: http://www.nytimes.com/2007/04/10/b...NT_GRAPHIC.html
Step 3
What? You're still considering buying a house? Well just to be sure, start saving the difference into a savings account for a few months and see how it goes. If your apartment is $500 and your mortgage+tax would be $900, start putting that $400 into a separate account and see how good it hurts.
If you really really REALLY still want to buy a house, read this guide:http://michaelbluejay.com/house/ The About page for homebuying is also very helpful: http://homebuying.about.com/. I've also heard the Complete Idiot's Guide to Buying a House is good, but I haven't read it. Here are the major steps you'll need to take once you've decided on buying a house:
1. Get preapproved at a bank for the maximum of your home price range. You can check out a few other banks too to see if their fees are comparable, but you really only need one preapproval.
2. Start looking at houses, probably with a real estate agent (buyer's agent).
3. Find a house you like (this is important)!
4. Put in an offer, negotiate, counteroffer, etc. They accept, yay! You write a check called "earnest money" and put it in escrow, so if you get cold feet now for no good reason, that money is not yours anymore. If you buy the house it goes towards closing costs, and if they back out you get your money back.
5. Pick your favorite mortgage and get approved for reals this time. Once you're approved, you can lock in an interest rate.
Have Some Flowers! posted:
While you can lock in an interest rate at any time after you're approved, most of the time you will want to wait until you actually have a property under contract. The importance here is having a closing date in mind when you go to lock the rate.
When you lock in an interest rate, it is done for a certain amount of days and there's a cost associated with the length of the lock. Extending the lock is costly as well.
Unless you can say for sure that you are buying a house by a certain date -no matter what- (which is a bad way to buy), it's probably better to lock the rate once you're under contract. Getting the best rate is important, but not as important as getting the right house at the right price and performing due dilligence with inspections.
Do know that once you're locked in, there are still ways to lower your rate. Some lenders offer a "Float Down" option, typically a one-time offer to lower the rate. Double check the terms, but typically these are good for the borrower.
If rates happen to drop after your lock, your mortgage broker can also switch to a different wholesale lender. They typically won't do this unless the change is drastic, because their rates go up if they do this too often. It makes sense - wholesale lenders give better pricing to mortgage brokers that are more consistent.
The biggest advice that I can offer here is to make sure you get your lock in writing. Ask for a Rate Lock Confirmation Letter. Some unscrupulous mortgage brokers will tell you they locked your rate at great terms while they continue to watch the market, hoping it reaches those terms. If the market never does, they'll probably drop this little bomb on you right before closing know that you won't be able to address it in time.
6. Get all inspections and appraisals done (this happens during the approval process).
7. Sign a bunch of papers, write a big check.
8. ???
9. If you thought this step was "profit", you need to reread the first paragraphs a bit more.
And that's basically it! You'll need to get homeowner's insurance and title insurance and also some duct tape. If you're in San Diego, earthquake insurance is separate.
Any other questions?
What about this $8000 tax credit? Won't that make it all worth it even if I work at McDonald's and owe $10000000 on my Mini Cooper?
No. Most prices will just be jacked up $8000, because everybody knows you are taking that into consideration. (Well, it's less than $8000, since you have to be a first time homebuyer to qualify, but it's still artificially keeping prices inflated more than they would be otherwise). It's a nice extra, but that's all it is - an extra. If you don't have any extra money and your home buying plans rest solely on being able to get that $8k check, you don't have enough of a buffer to be buying a house.
I want to buy a foreclosure, what are those all about?
If you're looking to buy one with a regular mortgage, skip to #4 in the below quote:
damnhooligan posted:
I'm not sure it's done the same way all over the US, but there are a couple different routes you can go to buy a foreclosured house here in Colorado.
1) Government foreclosures. Counties hold public auctions in their court houses/official buildings on a regular schedule. Some counties have one auction a week, others less often. Lists of properties up for auction are generally a few days before the auction is held, as to give the owners as much time as possible to cure the foreclosure. This is the first place to find proper foreclosures and deals can be found, but do your research on the value, condition and lien status of the properties. These types of auctions are full of lenders, mortgage companies and other such types hoping to find the very same deals, so come prepared for a bidding war. Bids start with the very minimum the lender holding the mortgage is willing to accept for the property. If no one bids, the property defaults to the lender and they're stuck with it. If you win, the county will expect the funds in full on the day you bid (or very shortly after) as either cash, cashier's check, certified check or electronic transfer. Some fees will be charged, but they're generally only a few thousand at most. Generally in a few weeks, you listed as the grantee of the deed and it's all yours. If you don't have thousands of dollars in your bank account to pay for the property, pay for repairs and pay for the possible eviction of former deadbeat residents, this is probably not the way for you.
2) HUD foreclosures: http://www.hud.gov/homes/ These are available all over the US and are aimed at people who intend to be occupants, not so much investors. All HUD listings give full and comprehensive inspection paperwork so you'll know exactly what you're up against. Prospective occupants have a deadline to place their bids, generally a few weeks after the house is listed. From what I've seen, there's lots of interest in these properties but realtors can take you around the property on generally very little notice.
3) Pre-foreclosures: These properties have had paperwork filed against them by the lender for foreclosure, but has not yet made it to the government auction. People in this situation, who have no intention of staying and don't want to be foreclosed on will put the property up for sale on the regular market with a real estate agent. If the bank approves a "short sale", the owner can sell the property for less than is owed on the house, but will satisfy and release their existing mortgage. Short sales can take for goddamn ever, so if you're looking to move quickly, you might have better luck elsewhere.
4) Bank owned real estate: Well, the bank's stuck with a foreclosed property it doesn't want because some dick didn't pay his mortgage and no one bid on it at the government auction. In an attempt to cut their losses somewhat, banks put these homes for sale on the regular market, sometimes at market values, sometimes more, sometimes less. Much of this depends on the quality and condition of the property. This can be a great way to pick up a home for cheap, provided you aren't opposed to doing a lot of work to fix it up. Mold, structural damage, ruined interiors and general disrepair are common issues with these cheaper properties, but damn are they cheap. Make sure you know exactly what you're getting yourself into with a property like this as they can quickly become money pits.
5) Public auctions held by private companies: You've probably seen commercials, posters and signs for these things. Giant events held at convention center boasting hundreds of homes up for auction, starting as low as $500! Attend an auction, drink some free coffee, bid on the property you want either in person (if you're in the state) or online (if you're out of state) and it's yours after lots and lots of paperwork. Lots of the properties for sale here were for sale at county auctions just months earlier for less. Auction companies like this generally have their own lenders which they'll try to talk you into using. These guys always seemed shady as fuck to me. Between the pushy lenders, overblown appraisals, deceptively low starting bids ($500-$1000 which can magically jump to 50k in one bid) and accusations of using shill bidders, you might be able to find a fantastic property for the right price but I wouldn't count on it.
If you're not sure which way to go or what's best for you, I recommend sitting in on a few county foreclosure auctions, asking a real estate agent to take you around to a few preforeclosures/bank owned properties, keeping your eye on the area you're interested in. Sites like http://www.realtytrac.com collect information on several types of foreclosed properties, but charge a membership fee. Though, if you're resourceful enough, you can find all the information for free yourself.
Warning about disputed stuff on your credit file:
Farking Bastage posted:
During the artificial housing boom/bubble/clusterfuck/whatever, an apparently large number of prospective home buyers used some sort of credit "service" to inflate their scores. What they did to up people's scores was basically dispute everything negative on their file. This would trick the automated underwriting at fannie/freddie into ignoring all the disputed(derogatory) info and sign off on the loan. When Fannie/Freddie went bust, this practice was identified as responsible for a large number of defaulted loans. Therefore any files with disputed items will not pass automated underwriting and go to manual.
Well the problem is, they took it a step further. Often when a tradeline is disputed, it either goes away, or the dispute finishes and there is a note on that tradeline similar to " Dispute Resolved ". Even though there is nothing actually being disputed, that leftover note will tank your loan. Yes, you heard it right. Exercising your rights to dispute through the FDCPA will leave a note on your tradelines and render you unable to buy a house, even if it's just a note and not an actual dispute.
For my situation, I have been through complete and absolute hell trying to get these notes removed. Experian and Equifax have been the easiest to deal with on this. However, Transunion are IMPOSSIBLE to deal with, which leads to my last remaining account note.
The account in question has the damned "dipute resolved" note on it which the underwriter keeps kicking back. I call Transunion repeatedly only to be told that they can't do anything about it, but they'd be happy to open a new dispute for me I call the creditor and they "do not report to credit agencies anymore".
No one will take ownership of it which leaves me pretty much fucked. The really funny thing about this situation is there are no problems with my credit score, the house appraised for more than we are paying, down payment money is documented well, DTI ratios are off the charts good, title stuff is done, WDO and all is good, inspections are all good, but we can't get approved because of a note on one tradeline on my credit file.
Resources
http://michaelbluejay.com/house/ - Guide to buying a house
http://homebuying.about.com/ - Lists of articles about the home buying process
http://www.nytimes.com/2007/04/10/b...NT_GRAPHIC.html - NY Times Rent vs. Buy calculator
http://www.realtor.com - Listings and advice
http://www.redfin.com - Listings and pretty GUI
http://www.zillow.com - Estimate what your house is worth, but don't let this be a replacement for an actual appraisal.
http://www.bankrate.com/calculators...calculator.aspx - One of the more popular mortgage calculators
http://www.hud.gov/homes/ - Listing for HUD foreclosures
http://www.everyonenegotiates.com/n...articlehome.htm - List of negotiation tactics if you want practice or just want to know what you're up against
Why "Renting is throwing away money" is a myth
Don Wrigley posted:
Before you say you're "throwing money away" on rent, think about the money you're "throwing away" when buying a house.
1) Looks like you're spending $5400 on closing costs, money down the drain.
2) PMI for not hvaing 20% equity, lets say $100 a month, down the drain.
3) Property taxes. Lets assume $2000 a year, down the drain.
4) Mortage interest. You're financing a staggering 97% of the house, you're going to end up paying, on a roughly $120K mortgage, $150K in interest payments, down the drain.
5) Maintenance. When you rent, the landlord is responsible if anything breaks...ever pay for a new roof? More money, down the drain.
In other words, the money you spend on rent is money you'll never see again. An overwhelming chunk of the money you spend on a house is money you'll never see again.
This idea that "renting is throwing away money" is a lie perpetrated by the real estate industry. Do some real research into buying a house if that's what you want to do; buying a house because "renting is throwing money away" is a great way of losing money in the short/long term.
Pros and Cons of owning a house
Dead Man's Ham posted:
What Ive liked about owing a house:
1. Rent income - I decided to rent out one of my rooms to a friend for 300 dollars a month and 1/2 utilities which worked out to a little under 4800 dollars for the year. I do not need to do this to afford the house, but by doing so it does make it a significantly more attractive financial option then renting. As an aside - if I do not have a roommate then renting would be a slightly better option for me from a purely financial standpoint. However, if I do lose my job I could rent out both extra bedrooms and total cost to me would only be between 50 - 200 dollars a month so there is so peace of mind there.
2. Workspace - I have a huge garage that I get to tool around in. I enjoy working with my hands and I have total freedom on when/what kind of mess I make.
3. A Yard - this will show up in the cons as well, but there are a lot of things to like about having a yard. I have a plenty of space between me and my neighbors so I can be as loud as I want as late as I want. I have a small garden, and a little deck (still 4x the size of any apartment deck ive had) with a grill on it.
4. Pride - I still get a great feeling of "This is mine!" when I pull into the driveway. I feel like its a real accomplishment of mine to me able to own a house. Looking at the house brings me much more joy then looking at the 30k that was my down payment had brought me when it was scattered though various investments.
5. The ability to change shit up - I havent done a lot with the place as I really liked what the previous owner had done, but I have made some changes. As an example - I have a cat and I needed a place to put its litter. I have an out of the way closet that is perfect for it, but I didn't like having the closet open all the time. I took the door off, brought it downstairs, cut a hole in it, installed a cat door, and put the door back up.
What I dont like about owning a house:
1. Fear of losing it - with the pride of owning comes the fear of losing. No matter how many precautions I take there is always a chance that something will happen that will put me in a situation where Ill have to lose the house. Ive never worried about getting kicked out of an apartment. Ill also include fear of losing its value in this category. Even though I believe I did my due diligence and bought the house for at or below its actual value at a good time in a stable area, shit can always go wrong and I could stand to lose a lot of money. Its not a good feeling.
2. Yard - With its pros comes its cons. Sometimes you feel like mowing the lawn, sometimes you dont. It can suck with its 90+ degrees out, your lawn looks like shit, and its going to rain the next day. Suck it up and get mowing! Also I fucking hate weeding. I did not know this until I had a lawn. Fuck weeding.
3. Neighbors - Their not as bad as when they share a wall with you, but they can still be annoying, and they can affect the value of your home. I don't have any awful neighbors in direct proximity, but there is one house 2 blocks away that feels compelled to burn their yard waste instead of letting the city pick it up, has yard sales every weekend with the same broken shit that no one bought last weekend, and has a new broken down hooptie in their front lawn every month.
Is now a good time to buy?
swenblack posted:
In most major markets, the answer is still 'no.' Every market is different, so you're still going to your own research, but you should consider a couple different factors. First, check out the historical home prices. The Case-Shiller Index is a good place to start. They compile housing data for most major markets and the numbers account for inflation. The February data shows that prices are only down to Sept 2003 levels, and probably will fall another 20%+ in most major markets to be in line with post-WWII historical levels.
Next, check out http://housingtracket.net. This site will show you a whole bunch of raw data from the relative short-term, but they track significantly more markets than the Case-Shiller Index. It will give you a good idea of how big the bubble was in your area and whether it's over yet in your particular market. You should look for a price/income that's at pre-2000 levels. Most people don't realize it, but the bubble actually started with the massive creation of wealth during the internet bubble around the turn of the millennium.
Finally, you need to consider the long term potential in your market. Some houses will more than likely never go up in value. Two good examples are areas that are unlikely to recover economically like towns with big Chrysler plants or townhouses an hour outside of Sacramento. Also factor in macro-economic tremds that will alter home prices. If interest rates go up, prices will likely come down. Also, real income growth will likely cause a rise in home prices.
Cheesemaster200 posted:
Past prices of housing does not dictate future prices of housing based on some curve. Population growth, social trends versus housing, and population movement are all major factors that are completely different than 20 years ago. Trying to estimate where house prices will be next year or 5 years from now based upon a graph of the past prices is just going to be nothing more than a complete guess, especially with this administration and this market.
I can't comment specifically for non-US processes, but generally the best place to begin is with a non-profit who provide first time homebuyer services. These can range from classes to financial counseling, pre-approvals and referrals. It's one of many avenues that one can take, but often non-profits will be able to provide a handful of referrals to everyone from trusted home inspectors to mortgage brokers and community banks who offer products with favorable terms. They also, usually, place an emphasis on what to avoid, which is a big deal in such a complex and often consumer-confusing industry.
Since you seem somewhat lost in where to begin, a first-time homebuyer class would give you decent foundation of the process and general financial information necessary. I'm also uncertain what sort of resources are available up north there.
The sticky foreclosure thread, while focused on, well, foreclosures, provides some information on affordability and general financial-side tips. It's been years since I did any directly purchase-side work, but the basics don't change too much aside from economic conditions.
Aside from that it's a matter of shopping around and getting the best you can get.
I'd also, generally, advise against purchasing foreclosures for two broad reasons: 1) if they couldn't pay a mortgage, they certainly weren't making repairs; 2) it's usually a blind process with little access to information concerning the property. It really does take a very knowledgeable professional to be able to make a good call on abandoned/foreclosed properties. I stick by that like glue.
Also, you need money. You'll have to put at least 5% down as a down payment on whatever you go for.
Also, for a condo you'll have added fees on top of your mortgage.
Once you know what you're pre-approved for you should get a realtor. They can help you find some stuff in your price range. Honestly, it's all a pretty simple process.
Oh yeah, make sure you get a home inspection done. No matter what.
edit: also, as a first time home buyer in Canada you can use your RRSP savings on your down payment with no penalty. You have to pay that back but you have a long time to do so.
Also, get the best damn home inspector that you can find. If you know anyone that bought a house between 2-5 years ago, ask them how their inspector was and how much he missed. If you can find anyone who says their inspector didn't miss anything important, you want that guy.
When calculating what you can afford, don't forget to factor in homeowner's insurance and property taxes.
A few years ago my SO and I went house shopping since we were sick of renting... in the town we wanted to live (close to city, safe, nice, etc.) we found a great house for $400K which was doable from the mortgage POV... but when we added up the rest of the monthly expenses, they almost equaled the mortgage payment! as an example, the taxes were $16K/yr, etc. (this is NJ, the land of fucked up taxes)
We're still in an apartment
Satanismymotor pretty much sums it up best. The first thing to do is to go to the bank, and find out:
a) how much of a mortgage you'd be pre-approved for,
b) how much of a downpayment you'd be expected to make. In Toronto, anything under ~15-20% and you'd probably have to buy mortgage insurance too.
For first-time homebuyers, there is a Home Buyers Program available through the Canada Revenue Agency. This page will explain far better than I ever could, but essentially it comes down to withdrawing from your RRSPs:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/cndtns/menu-eng.html
Then you have to figure out how much a month you can reasonably afford to pay. Chief expenditures for owning a condo apartment/townhouse are:
- mortgage
- home insurance (usually not too much for condos)
- maintenance fees (this could vary wildly)
- utilities (which ones specifically depend on which condo you end up in)
After you've figured out that stuff, then you can look for a realtor if you like. It's important that you find one you trust. Good places to start looking for one are through friends and family who have dealt with one before and have had a good experience. Take the time to meet them first to see what your comfort level is. You will be working with this person for a very important purchase, so don't be afraid to tell somebody "Hey, this may not be the best arrangement for us. Sorry!" I should note here that you should not sign anything (ie. Buyer's Representative Agreement) with a realtor unless you've decided that this is the person you want to work with.
I would second this.
On top of all that solid advice, any financial institution selling a foreclosed property has a duty to ascertain fair market value and sell close to it. You probably wouldn't end up saving a lot of money.
Depending on location and size of property, it's possible to hit $16K in taxes in Toronto. But since we're talking condos/townhouses, I'd say a more realistic range would be around $3K (ballpark).