Whether you're purchasing your first home or your next investment property, it's important to fully understand the process from start to finish. Below are the steps I take with my clients to help you make your next purchase.
Step One- Discussing your needs for buying a new home.
The first step we take is sitting down and discussing the reasons behind purchasing a new home, and what it might look like. This allows my clients to fully envision the specificis of the home that they want to buy, and it provides me with the essential criteria to find that ideal home. Below are questions you will need to ask yourself regarding the purchase of your new home.
For my full list of questions email firstname.lastname@example.org
- What are your motivations for moving into a new home?
- What type of home would best fit your needs?
- How many bedrooms will you need?
- How many bathrooms will you need?
- What form of transportation do you use?
- What is an acceptable amount of time commuting to and from work?
- Are there specific community amenities that are important to you?
- What are your long-term goals for home ownership?
- Have you spoken with a mortgage specialist to find out how much you are qualified to borrow for your new home?
- In your mind, what are the most important features you would like to see in your new home?
Step Two- Discussing the common costs you will encounter
Are you aware of the common costs borne to the buyer that take place within a transaction? I ensure that all my clients are fully aware of these costs beforehand in order to prevent any unexpected surprises. Here are a list of some of the more typical expenses you can expect when purchasing your new home.
Property transfer tax- 1% on the first $200,000.00, 2% up to $2,000,000.00 and 3% on the remainder of the balance of the home.
Goods and Services tax (GST)- For any new residential properties or those that have substantially renovated, purchasers must pay an additional 5% for GST. There are rebates available and more information can be found using the tax calculator at http://bcrea.bc.ca/government-relations/tax-calculators
Mortgage Default Insurance- If you are purchasing a home and are not putting down the minimum required amount for a conventional mortgage, you will be required to pay an insurance premium that will range anywhere from 0.6% - 4.5% of the mortgage amount.
Here are the minimum down payments required to avoid having to pay Mortgage Default Insurance:
For homes with a purchase price less than or equal to $500,000.00 →5%
For homes priced more than $500,000.00 and less than $1,000,000.00 →5% on the first $500,000.00 and 10% on the remaining balance.
For homes with a purchase price of $1,000,000.00 or more →20%
Legal fees, Insurance fees and Mortgage broker fees- These fees vary on a case to case basis; however, it is important to be aware of them. For more information on these specific fees I would recommend you speak with your lawyer, Insurance specialist and Mortgage broker.
Property tax- If you are purchasing a home, and the previous owner has already paid the property tax for the full year, the buyer will reimburse the seller for his share of the years’ taxes.
Home Inspection- When purchasing a home, it is HIGHLY recommended that a home inspection is conducted, and whenever suitable it should be a condition included in an offer made on a property. They will usually cost anywhere from $300-$500 dollars.
Moving costs- Costs will vary between companies and are also dependant on the amount and distance you will be moving between homes. Expect this to cost to range anywhere between four hundred to several thousand dollars. Call your local movers to obain an estimate.
Step Three- Making an appointment with your Mortgage specialist.
If you, like most of us, plan on arranging a mortgage to help finance your home purchase, it's in your best interest to make an appointment with your mortgage specialist before going to see properties. The mortgage specialist will be able to tell you based off your income and monthly expenses, how much you qualify to borrow. They will also explain the different mortgage options available to you. Once you have completed this, and we know what our budget looks like, it is time to go find your new home!
Step Four- Viewing properties and writing offers
Now that we know exactly what we are looking for and how much we can afford, it is time for us to go and look at properties. Since I now know exactly what you are looking for in your new home, I will set up appointments and inform you of any open houses for properties you may be interested in purchasing. Next, we will go and visit those properties. Once we find the perfect home for you, I will help guide you through the process of writing an offer step by step. This includes full explanations of the contract of purchase and sale, the subjects we would like to include in our offer, and what pricing strategy would be best suited for our offer.
Step five – Move in!
So our offer was accepted, what now? The deposit is withdrawn within 24 hours unless otherwise stated in the contract. Following that, we will have a certain amount of days (which will be outlined in your contract of purchase and sale) to remove any subjects (conditions) that we have required to move forward with the purchase of the home. Once complete, we enlist the services of a lawyer who will assist in the transfer of title from the seller to the buyer on the completion date.
This is just a small summary of the process of purchasing a home and what to expect. If you have any specific questions/concerns contact me today.