Buying a home is one of the most important decisions you’ll ever make. So it’s always best to get all the help you can. Here are some steps to consider.
Decide how much you can afford
Before you decide to buy, you should already have saved enough money for at least the down payment. If you are going to finance the home purchase with a mortgage, you should also get a mortgage pre-approval before you start shopping. Many realtors will ask if you’ve been approved. A lender will look at your finances and figure the amount of mortgage you can afford. Then the lender will give you a written confirmation, or certificate, for a fixed interest rate. This confirmation will be good for a specific period of time. A pre-approved mortgage is not a guarantee of being approved for the mortgage loan. Even if you haven’t found the home you want to buy, having a pre-approved mortgage amount will help keep a good price range in mind.
Bring these with you the first time you meet with a lender:
The cost of buying a home = one time costs (down payment, legal fees, inspection fees and taxes) + monthly costs (mortgage, utilities, maintenance, insurance and property taxes). When you buy a home in British Columbia, generally speaking you have to pay a Property Transfer Tax. The Property Transfer Tax is charged at a rate of 1% for the first $200,000 and 2% for the portion of the fair market value that is greater than $200,000. For example, if the fair market value of the property is $1-million, the Property Transfer Tax payable is $18,000. There are certain exemptions to the Property Transfer Tax. For example, if you are a first time home buyer, the Property Transfer Tax may be reduced or eliminated depending on the value of the property.
Additionally, GST (Goods and Services Tax) is payable on the purchase price of newly constructed or substantially renovated residential homes. Substantially renovated is defined in the legislation as the removal or replacement of most of the house construction components except for the foundation, external walls, interior supporting walls, floor, roof and staircase. The GST rate is 5% of the purchase price, subject to any applicable rebates. Used residential housing is not subject to GST.
Decide what you want to buy
First, decide where you want to live (urban, suburban, rural) and then decide which neighbourhood suits you best and what type of home (detached, attached or apartment) you want. It's best to explore the different areas of Metro Vancouver, such as Vancouver, Richmond, Burnaby, New Westminster, Delta, Surrey, White Rock, Coquitlam, North Vancouver, and West Vancouver.
After you have decided on the area and neighbourhood, you can write down additional criteria to enable a realtor to do searches for you. For example, your criteria may include the number of bedrooms, the number of bathrooms, the type of property (detached, townhouse, or condo/apartment), the age of the building, etc.
Search for listings
As a realtor, I have access to an incredible search tool called the Multiple Listings Service® (MLS® for short) which contains information on property listings. can send you listings that fit your criteria and together, you can draw up a short list and visit a handful of homes to make an informed and wise decision.
Offer and Acceptance of offer
Once you have found the home you would like, a written offer to purchase must be prepared. An offer is usually recorded on a standard form entitled Contract of Purchase and Sale, which is jointly developed by the British Columbia Real Estate Association and the Canadian Bar Association BC Branch. When you prepare an offer, it should contain a number of standard details, plus any conditions which are important to you. Be fully aware that once you sign this document and the seller also signs it, a legally binding contract has been formed.
An offer should include:
If the seller signs your offer without making any changes, a legally binding contract has been formed. The seller may also reject your offer. The seller is under no obligation to accept your offer or to make a counter-offer. Alternatively, the seller can make changes to one or more items on your original offer. The seller is considered to have rejected your offer and to be making a new offer back to you. This new offer is usually referred to as a “counter-offer.” When you receive a counter-offer, you then have the same three options as the seller had: accept, reject or make a further counter-offer. The process of counter-offers may continue until an agreement is reached.
Completing the purchase
The Contract of Purchase and Sale, which you signed, will state the completion day for the transaction. This is called the completion date. It is important that the completion date does not fall on the weekend or a holiday. On that day, legal ownership will transfer from the old owner to you in exchange for the purchase price of the home. You will be able to move in on the possession date stated on your contract. The completion and possession dates are not necessarily on the same date.