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Detailed Guide to Buying a Home - LUXE Real Estate Team - Pemberton Holmes Cloverdale - Victoria

Do you have any questions on the process of buying a home in British Columbia?  Don’t know where to start?  This Detailed Guide to Buying a Home will illustrate the steps needed to take (in order) to purchase a home in British Columbia.   Please enjoy.  If you have any questions, we’d be happy to help.  

What’s Your Credit Rating?

Considering that the average person usually borrows a large amount of money from a lender when purchasing a house, your credit rating has a lot to do with buying.  When was the last time you checked your rating?   If you haven’t a clue, you can contact the appropriate bureaus such as Equifax or TransUnion Canada if you’d like to find out.  If you don’t have any credit, now is the time to start building.  A lot of lenders say that that no credit is just as bad or almost worse than bad credit.

Find a Great Realtor

Our job is to inform, advise, direct, and protect our clients.  Clearly I’m biased but believe me when I say this: a Realtor is an incredibly valuable asset to have during the process of buying or selling a home.  When you’re making one of the largest financial decisions of your life, why not hire someone who lives and breathes real estate? We’ll be able to determine where you’re at in the process.  What routes to take.  What resources to use.  We’ll discuss budgeting plans, inform you of any major changes in the industry, you name it.  Having a chronological outline of the process and what to expect during your transaction is extremely beneficial to have from the get-go. Just like when you hire an agent to sell your home, you should hire an agent to help you purchase a home.  It’s really that simple.

Seeking Financing

The often skipped step: seeking financing approval before shopping for your next home.  Getting pre-approved means you are aware of the price range you can be browsing in.  Mortgage interest rates are usually guaranteed for 60-90 days – which varies depending on the lender – and gives you a bit of time to shop around with your rate locked down. Booking showings usually seems to come first in the Buyer’s mind.   If you do not have an approval letter from a lender that determines financial qualifications, then you should not be booking any private showings.  Period.   If you want to take a look, visit open houses in the area to get an idea of the particular market, but booking private showings should be left for qualified and serious buyers.

Brainstorm Before Browsing

Write a list of wants vs. needs and make sure to brainstorm for the future.  What fits your needs now may not be what suits your needs in the upcoming years.  The home you choose today will have a huge impact on your lifestyle.  Have these discussions ahead of time and plan for the future.   Are you a young couple? Perhaps buying a home you can grow in to would be the better option if you plan on staying for a while. Are you finding that you’d like to be in walking distance to amenities, or the opposite?  Find out what really drives you nuts in your current home and what you absolutely need in the next house.   What are the deal breakers? What isn’t absolutely necessary?

Start Searching For Your New Home

After you’ve engaged with a Realtor to act as your buyer’s agent, established financing and discussed your needs , now is the time to search for what’s available.  Of course you can always browse Realtor.ca and various platforms, but your Realtor is ultimately the greatest source for helping you search.   We have immediate access to properties when they are listed, without the time-delay you see on Realtor.ca or elsewhere.  We also have insider information and sometimes get leads on properties before they are even listed.

Schedule Showings on Properties

Showings! Here comes the fun part, or at least in my opinion. Without really needing any detailed explanation, if you find a property that looks like it could be the one, this is where we’ll be booking a showing.  If enough notice is given early on in the day we’ll usually be able to view the property the same day.  However, if the clients are shift workers, elderly, and especially if it’s tenanted we will need almost always need overnight notice.  Don’t be disappointed if the property you want to see “right now!” will have to wait to be viewed the next day.  

Writing an Offer

You’ve narrowed down the search and found the perfect home to write on!  This is exciting stuff.  After thoroughly discussing your desires and deal breakers, not to mention the price you are offering, it’s time to sit down and sculpt the offer.  Before you rush off to submit it to the listing agent, make sure you understand that your offer is a legally binding contract. In addition to the obvious – such as price and amount of time the offer is open for – your offer will state which items you’d like to include or exclude, desired completion date, and any conditions.  Keep in mind that the seller will be in control, and your offer might be countered; be prepared to negotiate.   In today’s market with many houses having multiple offers, it really helps to have a few strategies to navigate through a sticky situation. If your offer is accepted, congratulations!  You’re now one step closer to owning the home.

Offer is Accepted or Countered

If your offer is accepted that means you’ve now entered in to a binding contract to purchase the home —  Congratulations!  If there are any conditions included in the offer (which there should be!) you will have to work in good faith and a timely manner to remove them; in today’s fast-paced and high demand market the timeframe granted to remove subjects is usually 7-10 days.   The standard subjects of course are Financing, Building Inspection, Property Title, Insurance, and so forth, but can obviously be very specific to certain details regarding of the property. If your offer is countered, don’t worry — at least they want to work with you!  Be mindful and listen to the advise of your Realtor if negotiating the price.  Often times, the seller simply counters with an adjustment to the completion dates or included items.  This is where you really have to look at the big picture.  Maybe the crappy old cedar hot tub isn’t worth fighting over when the offer and house is nearly perfect; you may risk the other party declining the deal altogether.  Sometimes it’s hard to keep your emotions from getting in the way, but trust me…just stay calm and look at the big picture.

Scheduling Inspections & Reviewing Documents

At the very least, have an idea of who you will be hiring as your lawyer, building inspector, etc prior to submitting an offer.  With the market moving so quickly and with such high demand a lot of professional services – lawyers, inspectors, etc – are so backed up that they might not be able to schedule you in last minute.  Don’t wait until there’s only 3 days left to remove subjects before calling your building inspector or meeting with a lender. Regardless whether you are purchasing a single family home or a condo you should always hire a licensed and reputable inspector to conduct a thorough building inspection prior to purchasing. If you are purchasing a strata unit it would be very wise to have your lawyer review the documentation prior to purchasing the home.  This can be added as a condition to your offer.  As most lawyers usually charge between $350-$500 an hour – and the average strata package could take a couple of hours to review – it isn’t expected of you to hire a lawyer unless the offer is accepted.  That could get quite costly if you are paying countless lawyers to review documents on a unit you won’t be purchasing.  They will thoroughly examine the minutes, depreciation report, strata plans, etc and discuss the results with you.

Removing Subjects & Conditions

One of the previous steps mentioned establishing contact with your chosen legal representative, building inspector, etc prior to submitting an offer.  Removing subjects is a time sensitive period where your offer is contingent on you fulfilling certain obligations.  Don’t enter in to a contract if you already have cold feet.  You are legally obliged to remove your subjects in good faith; you may even have to prove your efforts were unsuccessful.  This of course depends on how the clauses were written. The most common subjects we see on almost all contracts would be financing, reviewing strata documents, building inspections, title, insurance, and reviewing the property disclosure statement. Using financing as an example:  Subject to financing does not mean subject to you starting the search to determine if you are qualified.  This clause is regarding your bank actually approving the specific house in question. They will determine whether or not to lend you the money and it may not be the full amount you qualified for — they’ll likely send an appraiser.

Paying Initial Deposit

It’s usually more common to pay the deposit after subject removal but this of course is completely depending on the situation, as vague as that sounds.  Depending on if you’re in a multiple offer or “bidding” situation – where you’re trying to entice the seller with a more attractive offer – you may actually pay a portion of the deposit upon acceptance and the remainder upon removal of subjects.   Either way, when you pay a deposit it is placed into a  trust account of the real estate brokerage of your Realtor.  It’s normal to see deposits of around 1-5% of the agreed selling price of the home, but in the end it is up to the buyer if they want to offer more.

Adjustments and Possession

Once the deal goes firm and all conditions are removed, the house will technically be sold.  Depending on the contract you might have a few days, weeks, or months before the change of status to when you actually complete the deal and take possession.  During this closing period your lawyer and lender will be working together to complete the sale, so you get the keys to your new home and the seller gets their money.  Your lawyer will be responsible for all the paperwork, which ranges from the transferring of title, to property taxes, and so forth.   There’s a lot of people to co-ordinate in this process; the buyer, their agent, their lawyer, and their lender.  You’ll also have to co-ordinate with the selling party and their representatives.

Arranging Utilities & Services

Make sure to arrange your utilities in advance so you have electricity when you move in!  Often forgotten about until the last second, you’ll have to remember to arrange for your cable and internet, gas, hydro, etc so your house will be turn-key ready when you move in.  There may be additional costs from your provider for setting up your new home with utilities, so keep this in mind.   Don’t forget all of your additional services such as your car insurance, cellular phone provider, and so forth. Are you going to be moving yourself instead of hiring movers?  Want a tip from someone who has moved a lot?  Since possession normally falls at 12PM the day after closing, why not rent a U-Haul for the afternoon with the intention of keeping the truck overnight.  Sometimes it is even cheaper than renting from 8AM with a deadline to return the truck back at noon.  If you can rent the truck from the mid-afternoon onward (and the U-Haul facility closes at 5:30) they will generally grant you the use of the truck until 8AM the next morning.  This means you can pack and unload with complete ease.  Sure, you’ll likely finish at 1AM, but you’ll be happy that you have the extra time with minimal stress.