So, you have decided home ownership is the right thing for you. Now it is time to get organized and position yourself so that you have a great experience buying. Whether you are a first-time home buyer or an experienced Buyer it is a good idea to understand the process.
1. Choose a Realtor that is perfect for you.
Buying a home is a huge investment. You want to ensure you pick a Realtor you trust. This Agent needs to be knowledgeable about the Kamloops market. Do they know all the neighborhoods, what each area has to offer, and the positive and negative attributes? Are they familiar with local transportation, schools, and ongoing local events that may impact your purchase? What type of sales experience do they have? Are they a full time Realtor or is selling real estate a part time job? It is really important that you ensure you are aligned with the right professional who will represent you.
2. Consider your budget.
Buying a home can be very costly. It is important to know how much it will cost you to not only buy a home but also to maintain it. There are a lot of different things to consider when purchasing a home. Some things to consider are:
- Do you have a secure job where you live or do you foresee a transfer to another city in the future?
- Current debts that you have? (i.e., car loans, credit card debt)
- Are you planning to grow your family in the more near future?
- Are there any lifestyle changes you plan to make that would impact the type of home you buy?
All of these things are important to consider as are the fixed costs of buying a home so that you have the information you need in order to make a sound decision. Some of the costs to be aware of are:
- Home inspection(s): this is not limited to just a home inspection. Does the property have a septic system or a well water/private water system?
- Mortgage related fees: Often when obtaining financing there will be appraisal fees in order for the Bank or lender to confirm the value of the home you are purchasing. If a Buyer is paying under 20% there are also mortgage insurance fees.
- Deposit for your purchase: This forms part of the purchase agreement and can range based on the purchase price of the home you are buying. This deposit forms part of your down payment for the home.
- Down Payment: In Canada the minimum down payment a Buyer can submit and obtain approval for financing ranges based on the purchase price. If a home is priced below $500,000 the down payment must be at a minimum of 5% of the purchase price. Homes over $500,000 and under $1million dollars the down payment amount is 5% on the first $500,000 of value and 10% on anything above that. If a Buyer is paying for a home with less than 20% the mortgage is considered high ratio. This then triggers mortgage loan insurance such as Canada Mortgage and Housing Corporation (CMHC), Genworth, or Canada Guarantee.
- Property Transfer Tax: This is something that most first-time home buyers are exempt from paying if the home is under $500,000 in value. If a Buyer has owned property, not only in BC but elsewhere they do not get the PTT exemption. Your mortgage broker can confirm your PTT obligations during the pre-approval process.
- Home Insurance: Most banks and lenders will require home insurance on the property and proof of your policy before completion.
- Legal fees: A real estate lawyer or notary is required to process the final completion on a property. A Buyer must use a legal team who is licensed to deal with real estate in British Columbia. If a Buyer is not going to be able to be present for the completion of a transaction (i.e., they live in Ontario but purchasing in BC), that Buyer will have a BC lawyer prepare all the documents and an Ontario lawyer or notary will notarize the documents with that Buyer.
- Title Insurance: A mortgage company typically will require title insurance for a home while it is also a good idea as a Buyer of a property to obtain your own title insurance. It is a one-time fee and it protects from losses related to the property title or ownership.
- City Taxes: The property taxes for a home are billed annually. Depending on the completion date for a home, the amount of property taxes due will vary.
- Moving Costs: Factor in how much it will cost to move. Do you need to hire a moving company? How much will supplies and/or fuel cost and how do you plan to move?
- Maintenance and cost to heat or cool your new home: It is a good idea to get the utility costs for any home you plan to purchase. Maintenance and the ongoing costs to heat and cool a home are extra costs to explore before committing to purchase a property. The type of home heating system can vary and costs to run them can also vary significantly. For example, a new natural gas furnace in a house will be much more efficient than a baseboard electric heating system.
- City Utilities: The city of Kamloops charges water, sewer, and garbage separately from property taxes. Water is metered so higher usage results in higher utility bills. The same goes for Sun Rivers and properties on Kamloops Indian Band land. While Corix in Sun Rivers bundles all of those charges in with the electricity and gas fees. The City of Kamloops sends a quarterly bill for those charges. Some owners choose to pay monthly to ease the burden of a quarterly payment. For more information regarding the City of Kamloops billing go here.
3. Get pre-approved with a mortgage broker
Not all mortgage brokers are created equal! Make sure you are aligned with a professional who lives and breathes mortgage lending. It is important to have a very knowledgeable mortgage broker on your side. Brokers can both be aligned with a major bank or a brokerage firm. If you choose to get your preapproval with your bank it is very important to speak to a mortgage broker, not a bank employee who works 9-5. Brokers are typically accessible on weekends and when needed outside of regular business hours. This is very important when you are looking to put in an offer on a home since the real estate market doesn’t necessarily wait for the next business day. We have a list of awesome mortgage brokers in the Kamloops area who are both with banks and independent firms. Contact us anytime to find out more.
4. House Hunting Time!
You have completed and explored all the previous steps as well as secured your pre-approval. Congratulations, now the fun begins, and you get to look at homes! This is when it is very important that you have decided who you want to have work as your representative. Your Realtor will help you with scheduling appointments to view homes, give you ongoing advice, and very importantly set you up with a dedicated home search site that will send you homes that meet your criteria and needs. Typically, a homeowner will require day before notice for a showing, so the more time you give your Agent to book showings for you the more successful you will be at seeing all the homes you want to view. If a home is tenanted there will be a minimum of 24 hours notice needed.
Buyers usually start looking at homes with a huge list of must-haves. Things like the number of bedrooms and bathrooms are pretty important when considering a home. What type of home are you looking for? Condo, townhouse, or detached? Sometimes you won’t know exactly what the most important features are in a home until you see them in person; however, there are likely some “no compromise” items that you must have.
5. How to Schedule Showings.
Simple! Contact your Realtor and let them know what homes you want to see and when. Your Agent will then schedule a tour of homes or arrange to show you the one place you want to look at. Agents have many tools that they can use in order to arrange showings for Buyers. We use a very handy Buyer Showing App that a lot of our buyers enjoy as it will give them basic info about each home they are seeing, the time and date of the showing along with letting them know if the showing is confirmed. Do you live out of town? Virtual showings are a good way to get a feel for a property before seeing it in person. Not all homes have virtual tours, so a live or videoed virtual tour is a great way to get familiar with a home.
6. Time to Make An Offer On A Home.
You have found a home that you love and you can see yourself living in it… so is time to make an offer! At this time your Realtor will give you advice about what a good starting price would be and what the value of the home is in the present market. Your agent will structure the offer in a way that is appealing to the seller while satisfying everything you need as a Buyer. Your Agent will explain the offer process and what to expect during the subject removal time assuming your offer is accepted. Sellers rarely accept the first offer presented and a Buyer should expect to receive a counteroffer.
7. Subjects and Conditions of Your Offer.
Nearly all offers will include conditions also known as subjects. Typically, Buyers will include subjects such as: finalizing financing, approving a home inspection, reviewing the seller’s documents (disclosure statement, title, and charges as well as strata documents if applicable). Often a Buyer should expect this process to take 10 business days to get through all of their subjects or conditions. It is important to have conditions on a purchase in order to ensure that the property being purchased is what it is expected to be. No one likes surprises so as a Buyer you have to do everything you can to learn about your new home and any upcoming repairs so you can make a sound investment decision. A home inspection normally runs three to four hours on most average sized homes.
8. Preparing for Closing and Completion
After all conditions or subjects are removed from the purchase agreement it is a waiting game for possession. The completion and possession dates are negotiated in offer a Buyer makes to the Seller. After a Buyer removes subjects, they will need to select a lawyer or notary who is licensed in BC to complete their final paperwork. The real estate firm will forward all purchase agreements and documents to the Buyer’s chosen legal team. A Buyer should expect to meet their legal team about a week to a few days before closing. There are a number of things to do between subject removal and completion:
- Secure an insurance policy.
- Order any internet and cable services hook ups for your possession date.
- Confirm any movers, storage or moving trucks for the moving day.
- Get all your money in order for closing. Do you have to cash in an RRSP or funds held up in a term deposit? Ensure those funds are in your account before the closing date.
- Double check with your mortgage broker that all mortgage documents are in order for closing.
- Create a checklist of all the physical mail you receive at your current residence. This way you can contact those companies and change your mailing address closer to your possession date.
- utilities, change of address and transfers.
- Change your address with Canada Post. You can also pay for mail forwarding.
- Change your address with Canada Revenue Agency, your bank, any investment firms, and for any credit cards you hold.
- Confirm the hook-up date and time for your internet, phone, and cable services.
- Update your address with your employer, friends, and family.
- Refer to the checklist you created in step 8 and update all of those who appear on your list. Examples would be magazine subscriptions, Costco membership, etc.
It has finally come; you get to move into your new home. Before the frenzy of unpacking happens take a moment to walk through your home and ensure all the things you negotiated in the contract are there. As your agent we would do this as a service for you but it is always good to take a second look. Have you been provided with any receipts from the Sellers for work they completed since you removed subjects. Sometimes Sellers have to make repairs or replace something. A good example is a Seller was required to replace a hot water tank before closing. It is important to ensure that all agreements have been satisfied.
Here are a couple tips for packing and moving:
Pack the items you will need right away when you get possession of your home. Sometimes using a clear bin helps to ensure those items don’t get lost in the mix.
Before unhooking any of your electronics, take a photo of the way they are connected. This will help when you need to set them back up.
Packing plates vertically helps to avoid breaks, wrap your delicate items in clothing or bubble wrap – clean socks are a great tool to use for safeguarding your glasses!
Moving can be very overwhelming and it seems like the list nearly never ends! We are here to help you keep organized. We keep all of our clients informed each step of the way. It is very easy to reach us with any questions or concerns at any point of your purchase, even after you have moved in!
To begin your Buyer’s journey contact us to chat or to set up your own personalize search.