Buying a Home
To receive a catalogue of RECENT SALES or ACTIVE LISTINGS for any of the neighbourhoods on Vancouver Island email email@example.com
To receive an INSTANT EMAIL NOTIFICATION every time a new listing comes to market for any of the neighbourhoods on Vancouver Island simply email firstname.lastname@example.org
First Time Buyer’s Guide
Benefits of home ownership on Vancouver Island?
Pride of Ownership
Pride of ownership is the number one reason why Canadians desire their own home. There is no landlord looking over your shoulder. You are able to make improvements knowing that any appreciation that results, will be to your benefit. Home ownership gives you and your family a sense of stability and security. It’s making an investment in your future.
In Canada, especially in the last few years, homes have appreciated considerably and in doing so have added substantially to owners net worth. Unlike stocks and bonds, you get to live in your investment. Also, in Canada your principal residence is exempt from capital gains taxes.
Mortgage Reduction Builds Equity
Each month, part of your monthly payment is applied to the principal balance of your loan, which builds your equity. You can borrow against a home’s equity for a variety of reasons such as home improvement, sending your kids to university or college, or starting a new business. Why pay-off your landlord’s property when you can own your own?
Homeowners accumulate wealth for the future while enjoying the benefits of a shelter that they have can use, improve and sell. Their home is a safe haven for investment.
Are You Ready to Buy a Home?
First – do you have the financial resources? You should have five percent of the purchase price of a home for the down payment, but ideally even more. Are there other priorities in your life e.g. starting a new business, which require your savings? If not, buying a home should be on your radar.
Second – do you expect to stay in your new home for some time? Moving can be expensive and you will want to build some equity before having to relocate. Your job and home life should be stable.
What Can You Afford?
If you haven’t already gone through the mortgage pre-qualification process, you will need to meet with a lender or mortgage broker. They will establish how much of a mortgage you will qualify for. Mortgage rates vary considerably and it is paramount that you shop around for the best rate, terms and options.
My affordability calculator will help you determine what monthly payment and the maximum mortgage you can manage. Note: if you are buying a condo, the amount of your monthly assessment has a direct impact on how much you can afford to spend on your mortgage.
First time home buyers may want to take advantage of the federal government’s Home Buyers’ Plan. Under this plan, you may use up to $20,000 of your RRSP towards the purchase of a home. The money is tax-free as long as you pay it back in the next 15 years. Ask your RE/MAX Sales Associate for details.
Questions To Ask When Assessing Home Features
Do you need several bedrooms, more than one bathroom, space for a home office, a two-car garage?
Do you want air conditioning, storage or hobby space, a fireplace, a swimming pool? Do you have family members with special needs?
Do you plan to have children? Downtown or suburbs? Proximity to recreation or work.
Do you need a substantial backyard? Pets?
Is there adequate storage space?
Will any remodeling be required to make the home move-in ready for you?
What service providers (cable, Internet, telephone, Satelite) are available in the area, and is the house completely wired for each? Can you hear me now – how good is the cell phone reception?
How much are the yearly property taxes?
How much do utilities run each month? Does the house use gas or electric for the furnace, water heater, and appliances?
How old are the major appliances, and which are included with the house?
Have there been any major repairs to the house, and if so, when were they completed? For example, how old is the roof? Has water ever damaged the basement or foundation?
Ever had problems with insects, such as termites and spiders, or rodents?
Older homes need to be carefully examined – Windows may need caulking or new sashes, bathroom tiles may need grouting, home may need rewiring (planning on a hot tub or sauna?), a new hot water heater, or a new furnace.
Location, Location, Location
How far will you be commuting and what is the traffic like? Factor in cost of fuel.
Where will your children attend school and how will they commute?
Are there recreational facilities and parks close by?
Are you close to family and friends?
Is safety or high crime an issue?
Is the property close to an obstacle or negative influence? (i.e. an apartment building, shopping centre, school, radio tower, power lines, LRT or railroad track, highway, airport or commercial project).
Access to schools, work, recreation, shopping centres, public transportation, cultural attractions, libraries, churches and hospitals
Adjacent undeveloped land – what is proposed for this or other green space?
Heavy traffic can be noise nuisance and hazard for children
Distance from the unit to amenities, parking, walkways, roads, public transit
Does the neighborhood reflect positively on the value of the condo and your lifestyle choice?
Does this neighborhood, for any reason, have a poor reputation?
Is the future economic climate for the area good? Are businesses moving in? Is there government investment?
Are people moving in or out of the neighborhood? What is their age, income level, family size?
Are there plans for this neighborhood that you may be unaware of (i.e. a future highway, a commercial development or a new housing development) that will provide competition on resale?
Noise and Privacy
Proximity to highways, driveways, parking lots, playgrounds, trains.
Proximity to elevators, garbage disposal, fire exits, heating and air conditioners.
How well is the building soundproofed.
Visit at different times/weekends to check noise levels and activity.
Source URL: http://www.remax-western.ca/first-time-buyers-guide
New vs. Resale
Should you buy a brand new home that you can customize, or shoose one that’s move-in ready? Both have their advantages:
Personalized choices. You may be able to upgrade or choose certain items such as siding, flooring, cabinets, plumbing and electrical fixtures.
Up-to-date with the latest codes/standards. The latest building codes, electrical and energy-efficiency standards will be applied.
Maintenance costs. Lower maintenance costs because everything is new and many items are covered by a warranty.
Builder warranty. A homebuilder’s warranty is usually available in all provinces (except Nunavut and the Northwest Territories). This can be important if a major system such as plumbing or heating breaks down. This warranty does not apply if you build the home yourself. Neighbourhood amenities like schools, shopping malls and other services may not be complete for years.
Taxes. Such as the Goods and Services Tax (GST) will apply. However, you may qualify for a rebate of part of the GST or HST on homes that cost less than $450,000. For more information about the GST New Housing Rebate program, visit the Canada Revenue Agency website at, http://www.cra-arc.gc.ca. 
Extra costs. You may have to pay extra if you want to add a fireplace, plant trees and sod, or pave your driveway. Make sure you know exactly what’s included in the price of your home.
Easy access to services. Probably established in a neighbourhood with schools, shopping malls and other services.
Extras included. Landscaping is usually done and fencing installed. Previously owned homes may have extras like fireplaces, finished basements or swimming pools.
No GST/HST. You don’t have to pay the GST/HST unless the house has been renovated substantially, and then the taxes are applied as if it were a new house.
Possible redecorating and renovations. You may need to redecorate, renovate or do major repairs such as replacing the roof, windows and doors.
Make An Offer
When you find the perfect home, buy it.
After touring homes, you will probably instinctively know which one or two homes you would like to buy. Ask to see them again. You will see them with different eyes and notice elements that were overlooked the first go-around.
At this point, your RE/MAX agent should call the listing agent to find out more about the sellers’ motivation and to double-check that an offer hasn’t come in, making sure these homes are still available to purchase.
Your RE/MAX agent will help you through the offer process. Be very specific in your offer about any improvements or repairs you want the seller to make before closing or about any appliances or other items you expect to be included.
Counteroffer. The seller may accept your initial offer, no questions asked, but often he or she will make a counteroffer, accepting some terms but making changes or raising the price. This process goes back and forth until you either agree or the deal collapses.
Contingencies. Acceptance of the sales contract can be made contingent on (that is, dependent on) certain circumstances. As a first-time homebuyer, you should probably stipulate that the house passes any inspections you want performed and that financing is approved.
Money Saving Tips
Shop for a mortgage. That ½ percentage point may not seem like much but it will save you thousands over the life of a mortgage. Get quotes from a variety of banks or enlist a mortgage broker (the bank, not you, pays his or her fee). You can always go to your own bank to see if they will match the rate.
Shop for a lawyer. Fees may vary greatly and you can often save a lot by using someone who specializes in real estate law, as they compete for this business. Costs are often less due to economies of scale, but ensure you get a full cost quote.
Get a home inspection. Not only for piece of mind but there is nothing worse than discovering cost prohibitive problems after you have moved in. If your home inspector identifies deficiencies, you may be able to renegotiate the purchase price to cover required repairs.
Decline mortgage insurance. You are farther ahead to increase your own term insurance for the amount of the mortgage. The premiums are often less and the payout greater.
Buy a home that produces revenue. If you can rent out your basement or a self contained suite it will help you pay the mortgage or offset your home expenses. Your RE/MAX sales associate can offer advise when it comes to zoning requirements and public transportation access.
Shop and get quotes on all of your major expenses including moving costs, renovations, home insurance etc. Ask lots of questions and get referrals. Your RE/MAX sales associate is a great resource.
Don’t buy your furniture on time payment plans. Make do until you can afford it. Shop garage sales or used furniture outlets.
Make a budget and stick to it. There are a number of costs that you need to take into account as we have illustrated. Put the money aside.
Remember, all of the above will save you money but the most important consideration is to buy a home you can afford to live in.
Source URL: http://www.remax-western.ca/new-vs-resale
How to Make an Offer
When you have found a home you are interested in buying, your RE/MAX Sales Associate will walk you through the process of drafting an offer to purchase. Your sales associate will communicate the offer to the seller or the seller’s real estate agent for you. Some properties are in demand and you will not be the only interested party making an offer. Your RE/MAX Sales Associate will assist you in generating an offer that is reasonable and protects your interests using specified terms and conditions.
An offer can be drafted with or without conditions; an offer without conditions is known as a firm offer and one with conditions is known as a conditional offer. A conditional offer represents the party with the placement of certain conditions on the purchase. Some of these conditions could be “subject to financing approval”, “subject to the strata council allowing pets”, “subject to the buyer’s house selling”, “subject to an approved home inspection”, among many others.
The seller may accept your initial offer, reject your offer or present a counter-offer. The counter-offer may differ from your original offer in respect to price, conditions, the closing date or any other items. Offers can be countered back and forth between the parties until one of you accepts or rejects, ending the negotiations.
There are many components of an offer that you should be aware of and understand. Your RE/MAX Sales Associate will answer your questions and explain the entire process to you so that you are comfortable with the steps involved.
An offer includes certain “terms”, which specify the total price offered and how the financing will be arranged, such as if you will arrange your own with a financial institution or mortgage broker or if you wish to take over the seller’s mortgage (assumability).
Inclusions and Exclusions
These are specifications within the offer that detail the items to be included or excluded from the purchase of the property. Typical inclusions are appliances, window coverings, fixtures and decorative pieces.
A deposit is provided from the buyer to the seller as a token of the buyer’s assurance and intention to buy the property involved. The deposit is applied against the purchase price of the home once the sale has closed. Your RE/MAX Sales Associate can assist you in proposing a certain and appropriate amount for the deposit.
Items that are usually put in place to protect a party’s interests upon selling or buying the property and refer to things that must occur or be in place before the sale closes.
This is usually the date that the legal ownership of the property transfers from the seller to the buyer and, unless otherwise noted, when the funds for the purchase are concluded.
When the buyer takes possession as specified in contract oif purchase sale.
This is the amount that the buyer is offering to pay for the property. The price is usually dependent on market conditions and may differ from the seller’s current asking price.
Purchasing a home involves a lot of paperwork, most of which are contractual documents that will legally bind you to the numerous terms and conditions. For this reason it is important to have a good lawyer or notary public acting for you. Someone to protect your rights and interests.
Finding a Lawyer/Notary Public
If you don’t have a lawyer or notary public, you can look for a referral from friends, family or business acquaintances. Look for someone with real estate experience and discuss their fee scales. Your RE/MAX Sales Associate can help you locate a reliable professional, whom you feel comfortable working with.
Lawyer’s/Notary Public’s Function
You will need a lawyer or notary public to process your purchase and ensure the terms are met:
1. the correct property is purchased
2. transfered title to your name
3. ensureed title is free and clear of prior owners encumbrances
4. your mortgage is registered properly on title
The legal process varies from province to province within Canada. Specifically, you will need to consult with your chosen legal professional and he/she will explain the process and the steps that need to be completed before you get the keys to your new home.
Your lawyer/notary public will prepare a “Statement of Adjustments” outlining all the financial aspects of your sale.
Legal Fees and Disbursements
The difference between legal fees and disbursements is analogous to the parts and labour you pay when fixing your car. Your RE/MAX Sales Associate can help you locate a reliable professional, whom you feel comfortable working with.
A home inspection is an objective visual examination of a home’s structure and systems.
Why get a home inspection?
There are a number of reasons why RE/MAX recommends a home inspection including:
To ensure you are not surprised by major defects
So you can be advised about the various elements of the home including – heating and cooling systems, structure, electrical and plumbing
To learn about how the mechanical systems work and need to be maintained
Most homeowners are not expert in the numerous components of house construction
A third party can be objective as there is no emotional attachment
Who should you hire?
Home inspectors are often referred by family or friends. Your RE/MAX agent can also provide you with a list of inspectors. Look for one that is trained and certified by a national organization such as Canadian Association of Home Inspectors (CAHI) or National Institute of Building Inspectors (NIBI) and who has errors and omissions insurance. Do not hire someone who will do any suggested work due to the conflict of interest.
When should you call?
Order the inspection after your offer has been accepted. The contact will stipulate the length of time you have to complete the inspection.
What is involved?
The home inspection will determine the structural and mechanical soundness of the home. Your home inspector can identify existing and potential problem areas, suggest possible solutions and provide estimates for the cost of the work required. You will receive a report outlining the inspection findings. You should accompany the home inspector during the inspection or arrange to meet them at the home so they can walk you through the report. If as a result of the inspection, you have further concerns, have a specialist in that area conduct a more extensive examination.
What does it cost?
Costs vary depending on a number of factors including:
Size and location of the home, features, age, and services required. Additional services may include radon, septic and well testing. Your RE/MAX agent can assist you in obtaining a quote from a potential inspector before you enlist his/her services.
Mortgage lending is a highly competitive field. Information on mortgage rates, which can change daily, is available in local newspapers, through mortgage brokers, from individual lenders and of course through conventional financial institutions. When you are shopping for a loan, interest rates tell just part of the story. You will also need to study the various fees lenders charge and many mortgages today are almost custom-tailored to individual needs with many options available.
Ask your Agent
Your RE/MAX real estate professional can recommend lenders to check with prior to beginning any serious house hunting so you will know exactly what you can afford.
Source URL: http://www.remax-western.ca/writing-offer