Whether you’re a first-time buyer or a more experienced one, there will always be questions related to buying property in Canada that may arise. Choosing to invest in property is a huge step, yet most people don’t spend nearly enough time as they should understanding what it entails.
If you’re looking to buy a home or commercial property for sale in Vancouver, BC, you need to make a serious effort to familiarize yourself with what’s involved. You need to read up on the procedures and seek to understand the various documents you may encounter. You should also know who to turn to for help throughout the process. To prepare for the road ahead, follow this handy guide.
Preparing to buy a home
First, research house prices in Vancouver, Canada and seek professional insights on the local real estate market. Then sit down and go over your finances with a fine-tooth comb. Go through your bank statements, assess your average savings, and determine your debt-to-income ratio to figure out how much you can realistically afford to spend.
Ask yourself how you can best finance your purchase. For some, it may be feasible to buy a property in cash. For most, however, taking out a mortgage will make the most sense.
Hire the right real estate agent
Finding the best real estate for sale in Vancouver, BC is made easier with a real estate professional to guide you every step of the way. Realtors provide vital tools, information and expertise you need to get the best deal possible.
Find a home that fits your lifestyle
Narrow down your search for a home by making a list of the things you desire in a potential home. Narrow down your search by viewing homes that most closely meet your non-negotiables. Be open-minded about things you can easily change, like paint colors or outdated appliances. But don’t settle for homes that have, say, major structural problems or environmental issues.
Also, determine what type of home ownership you should opt for. The 4 most common housing ownership interests are Freehold, Strata Title, Leasehold, and Cooperative. Freehold owners hold exclusive rights to both the home and its grounds. This is the most common type of ownership. Strata Title owners (duplex, apartment building, townhouse) have separate units but share common areas such as halls, parking garages, elevators and the grounds, for which they pay a monthly maintenance fee. Leasehold interests refer to the lengthy ownership (averaging 99 years) of buildings such as townhouses or apartments built on land owned by the city. Leasehold owners of apartment buildings can sell leasehold interests to individual unit “owners.” Cooperative ownership means buyers own a share of the entire building or complex rather than a single unit. Fees are collected for upkeep and repairs, and everything is subject to the rules and regulations set forth by the co-op board.
Choose the right mortgage
The two most basic mortgage types available to buyers are conventional and high-ratio mortgages. A conventional mortgage is a loan that allows buyers to borrow up to 80% of a property’s appraised value or purchase price. A high-ratio mortgage, on the other hand, is a loan that exceeds 80% of the property’s value. The latter must be insured by either the Canada Mortgage and Housing Corporation (CMHC), Genworth Financial Canada, or by any other qualified mortgage insurer.
No two loans are exactly alike: Clauses, terms, and fees will differ from lender to lender. Inquire with different banks and explore your loan options thoroughly.
Your credit score will play an important role in helping you secure a loan with the most favorable mortgage terms. A high credit score can help ensure you enjoy the lowest interest rates. To get a good credit score, do:
- Pay your debts on time
- Stay within your credit limit
- Avoid applying for additional credit
- Don’t take out more loans
Keep closing costs in mind
A home will cost you more than just its sticker price. When figuring out what you’ll need to spend, include these in your budget:
- Your down payment
- Appraisal fees
- Survey fees
- Government taxes (e.g. property transfer tax, property tax, GST, etc.)
- Home inspection fees
- Legal closing fees
- Legal title registration fees
- Strata fees
Making an offer
In a hot market like Vancouver, your offer should be competitive and appeal to the seller, yet should also provide protections for you as a buyer. Conditions to protect your purchase are known as “subjects.” They could cover anything from financing to inspection, insurance, and other items relevant to your offer. Your real estate agent will help you through all of these.
Closing the deal
A BC notary or lawyer will instruct you on the legal process of transferring assets. During closing, you’re required to sign the transfer documents and cover the funds necessary to close the transaction.
If you’re buying property in Vancouver, BC, choose TeamW Realty. With a combined 20 years of experience, we offer the best real estate experience for buyers in the city. Contact us at 604.737.8865 or send us an email at info(at)teamwrealty(dotted)ca.