Thinking of buying a home?

Yes!

Now that you’ve made the decision to purchase a property, it is time to get organized. There are a few important things to consider before you move forward.

1)    Motivation: Is this your first home purchase? Is it time to stop paying rent and start building some equity? Do you need a larger home to accommodate a growing family? Are you downsizing? Will this be an investment or a primary residence?

2)    Financial Position: Before we start the hunt for your new home you need to take a good look at both your present financial position and your likely future financial position. Take the time to talk to your bank, lending institution or mortgage specialist (I can recommend several great candidates!) and get yourself prequalified. Keep in mind, there is more to a home purchase than a down payment, deposit and monthly mortgage payment. Closing costs are an important piece to the home buying puzzle and should be built into your prequalification.

3)    Time Frame: When do you want to take possession of your new home? Do you need to sell your existing home first? If so, are there any issues with your current mortgage that will affect your ability to buy a new home? These are important considerations when it comes to the Offer Writing stage.

4)    Location and Style: Is the neighbourhood the most important factor to you? Or is it the size and style of home that matters most? Are you looking for a quiet street or somewhere close to the action? Maybe it’s the proximity to certain schools, parks, transit and shopping that is the key issue? For most people their dream home is a combination of all of the above factors and more. Let’s create a “Wish List” together so that we can start to select the perfect property for your needs.

Now that we’ve got the WHY, HOW (much), WHEN, WHAT and the WHERE established, we can let the hunt for your new home begin.

This is my favourite part of being a REALTOR®, the property selection process! Now that the parameters have been set, we will select appropriate properties and get out together and have a look. This can be done at your convenience, either through private showings or public open houses.

We’ve found our dream house! What happens now?

Now that you’ve decided on your new home, it is time for us to write an offer in the form of a Legal Contract of Purchase and Sale. I will walk you through the contract and make sure you are fully comfortable with everything it entails. Once a satisfactory offer has been written, I will present it on your behalf to the sellers. After an offer is negotiated and accepted by both parties it is a legally binding contract. What that means is that we will want to build some protection in to your offer. This protection comes in the form of “Subjects” or “Subject to” clauses. These will allow you, as a buyer, to perform your due diligence and confirm any and all information on the property you are about to buy. Depending on the style of property being purchased, basic subject clauses include, but are not limited to, the following:

Detached Homes:

1)      Subject to buyer being approved for financing

2)      Subject to a satisfactory home inspection

3)      Subject to receiving and approving the title search

4)      Subject to review of the Property Disclosure Statement

5)      Subject to obtaining fire/property insurance as of completion date

Subject conditions must benefit a particular party to the contract (either buyer or seller) and must be removed by a specified date. Upon successful removal of all subject clauses, the contract becomes firm and binding. If subject conditions cannot be removed on or before the date specified in the contract, the parties may mutually agree to either extend the subject removal date or collapse the offer.

Strata Properties:

Offers on “Strata Title Properties” can be more complex by nature than those on detached properties. Although a buyer and their agent may be looking to purchase one strata lot within a building of strata apartments, they rely on receiving specific types of information relating to the strata lot, the building and the strata corporation. Often, this information comes from the listing agent, the property management company (if applicable), and/or the strata corporation itself.

When buying an apartment or townhome, typically the same five common subject clauses are used as with detached homes plus subjects related to the review and approval of documents containing information about the strata corporation and the strata log.

These include the following documents:

1)      Form B

2)      Strata Council Minutes for the last 24 months

3)      Financial Statement

4)      Strata Plan

5)      Engineers Reports

6)      Depreciation Report (if applicable)

When you purchase a Strata Title property, be it a condo, apartment or townhouse, you are not just buying your unit, you are buying into a community of property owners. That community shares maintenance costs and expenses for the Common Property areas, often including the shared facilities, the exterior and roof of the buildings. By reviewing the strata history through these documents we can ensure you are buying into a responsible and proactive community and won't be surprised by any major upcoming levies, expenses or renovations.

As with detached homes, subject conditions on attached homes must benefit a particular party to the contract (either buyer or seller) and must be removed by a specified date. Upon successful removal of all subject clauses, the contract becomes firm and binding. If subject conditions cannot be removed on or before the date specified in the contract, the parties may mutually agree to either extend the subject removal date or collapse the offer.

Subjects are removed! Now what?

You’re almost home!

Once the subjects have been removed it is time for the buyer to produce a deposit cheque. It is at this point that we will need to get a good lawyer or notary involved so the funds can be exchanged for clear title in what is called The Conveyancing Process. This is the official transfer of monies for property and safe registration of title in the Land Title Office.

Closing Costs

These can sometimes come as a surprise to buyers and that is why I mentioned them right at the beginning. There are last-minute costs, such as taxes, legal fees, appraisal fees, moving expenses, and home insurance to pay before you are finally in your new home. The time to budget for those “end” expenses is now. You must be prepared to pay most, and perhaps all, of the following closing costs.

Property Transfer Tax – 1% on first $200,000, 2% on remainder The British Columbia Provincial Government imposes a property transfer tax, which must be paid before any home can be legally transferred to a new owner. Some buyers may be exempt from this tax. First Time Home Buyers are exempt from this tax if their property is purchased for $475.000 or less. Some conditions apply, ask me and I’ll walk you through it!

Appraisal Fee – When the lending institution requires an appraisal of the home before approving your loan, it may be your responsibility to pay the appraiser’s fee.

Survey Fee – The lending institution may also require that a survey certificate be presented to them. The purpose of the survey is to formally establish the boundaries of the property and to ensure that all buildings are within those boundaries.

Fire & Liability Insurance – The mortgage lender will insist that you purchase an insurance policy which guarantees that, in the event of fire, the lender will receive the balance owing on the mortgage loan before you receive any insurance proceeds.

Property Tax Adjustment– If the current owners have already paid the full year’s property taxes to the municipality, you will have to reimburse them for your share of the year’s taxes.

Legal Fees – The transfer of home ownership from the seller to the buyer must be recorded in the Land Title and Survey Authority Office in order to protect the new owner’s interests.

Possession Date usually falls 1-2 days after the Completion Date. That’s when you receive the keys and you can finally say…

Home, sweet home!

Sounds complicated and confusing? Just remember that I will be right there with you, guiding you along every step of the journey and answering any questions you might have. My job is to make this as stress free and rewarding as possible for you. Let me do the work for you.

It’s what I do.