buying! 
BUYING A HOUSE
When is it the right time to get into the market, trade up or down?As long as immigration to B.C. increases and B.C. retains is moderate climate and natural beauty B.C. will remain on everyone's “Move to” list, housing prices will remain healthy and most of the time the market will be active. Proceed with caution! Can you afford to enter the market?
The best time to trade up is when prices are down because the difference between the home you are selling and the one you are buying is less.
The ideal way to downsize is sell you large property, rent until the next price decrease or until you find the ideal home at the right price, however there are many pitfalls here discuss with an experienced, full time professional REALTOR®.
Do you need an REALTOR® to buy a house?
No, but you're much better off with one. There are so many pitfalls that the general public is unaware of you really do need a seasoned professional to assist you. Many people work during the day and do not have enough time to look for a house; nor are they always familiar with the neighborhood they want to live in. If you're not sure what kind of house you want or the community you want to live in, an agent can lead to the right direction, save you countless hours of fruitless looking, save you money and keep you from ending up in court. REALTORS® have liability insurance should something go wrong you have financial protection in most cases.
What should I look for in an REALTOR®?
Experience, knowledge and reputation. You want your questions answered. Find an agent that you are comfortable with, works full time as a REALTOR®, knows the business and is willing to work hard to find you the home you want, check references and stay loyal. Agents that sell thousands of properties are not always the best agents many don't have time for you or you end up working with as assistant.
What's right for me?
It depends on what it is important for you, affordability or lifestyle. Do you want a relatively hassle free lifestyle in an apartment with a pool, health club, spa etc. or would you prefer a yard to care for? Apartments offer ease of maintenance. Houses and town homes offer more privacy, but you have to maintain them. Apartments offer more security. Houses have more room for families. If you want to live in town, apartments are more affordable than houses. Your choice should be based on your personal priorities, affordability and lifestyle.
BUYING TIP : If commuting time is important to you—get up early for a few days and drive to work from the area you're considering moving to.
Ten things to consider when buying a home:
· Can I/we afford it?
· Is my/our household income enough to make the purchase?
· Is there job security for my spouse or me?
· Will mortgage/loan rates go up?
· Do I/we have the down payment?
· Is the property in a location I/we like?
· What amenities does it have to offer?
· Are there schools, bus routes, shopping and community centers close by?
· What size house do I/we need?
· Do you like the floor plan/design of the house? Does it work for me/us?
BUYING TIP: Write down your “Top 10 list” of wants and needs and give them to your agent! Ask your agent about schools, bus and street safety.
When I start looking at home, what should I look for? Here are some essential considerations when looking at a home.
· Does the home's layout appeal to me/us?
· Is the home big enough for my/our family (now and later)?
· Is the yard big enough for my/our needs (is it too big)?
· Is the roof in good condition? (Roofs need replacing & should not deter you from buying)
· Is the property drained properly? (Very expensive to repair perimeter drains)
· Are there any plumbing problems?
· Are there any leaks, (watch for water damage marks)?
· How has the house settled, are the floors level?
· Does the house have all the features I/we want?
· Be aware of “leaky condo syndrome.” It can also applies to single family homes!
How many homes should I look at?
View no more than 6 homes in one day! Take notes! You should find the right home after viewing
1-24 homes. Remember it may be the 1 st or the 24 th , by doing the required research and your task
will be easier and you will be much happier with your buying decision.
What are the property taxes?
Ask your agent. All tax information posted on the local board's MLS® system refers to gross taxes.
Should I have the home inspected by a professional inspector?
Definitely ! When spending tens or hundreds of thousands of dollars you want to make sure you are not getting any “surprises”. “A lot of things can lurk behind walls that you can't see says Don MacKay Manager of Amex. “A trained inspector can find problems that are very difficult to spot. Insist the inspector provide a written report including photos. Hire only a qualified inspector that provides references, (call at least three) and that has CAHPI certification.
Should I hire a lawyer or notary?
Conveyance of property is extremely important you should hire a lawyer or notary pubic to do it. If your conveyance is not done properly it can cost you your new property.
What about property insurance?
Talk to your insurance agent and make sure you have the coverage you need (i.e. fire, flood, earthquake etc.). You don't want your home to be uninsured for one day. Inventory your home with a video recorder when you move in. Some homes do not qualify for insurance and can't be mortgaged thru conventional means, make sure obtaining insurance is one of the conditions of your contract of purchase and sale and you can obtain insurance prior to removing subjects.
BUYING A CONDO
How many condos should I look at?
As with any home you need to know the best value in the area, do your research. This can only be done by seeing many of the suitable homes in your area of interest.
Should I bring anything with me when I'm viewing?
Your Agent should supply you with a check list also a note pad, a tape measure, flash light (agent will have one). If you have any concerns about size or furniture fit, measure rooms, sketch floor layout so you aren't fooled by appearances.
How do I compare different buildings?
Compare location to location and amenities to amenities. If you're looking at Kits condos, compare them to other Kits condos. Don't compare them to other area condos. What amenities are offered? Are they the amenities you want? If you're buying closer to the city expect smaller square footage to get location. Amenities such as pools, spas etc. cost extra, higher maintenance fees do you need them and will you use them?
How do I know I got a good buy?
If you have done your research with your REALTOR® and you got what you wanted, you know you got a “good buy”!
What do I actually own when I buy a condo?
You own the walls and all they enclose within you condo. You also own a proportionate share of the common areas, (hallways, garage, storage areas etc.) and the land the building sits on. This varies from building to building make sure your review all the documents to removing subjects on your purchase.
What is strata title?
Strata title is ownership of a single unit of a multi-unit complex. All owners of individual units have a shared interest in the common property. The property is managed through a strata council, elected or appointed by the owners. The strata council is responsible for the administration of the complex.
Are there extra costs involved?
Expect to pay monthly maintenance fees, which go towards the daily upkeep of the grounds and building, sometimes gas, heat and hot water is included. When comparing maintenance fees make sure you compare equally, some fees include heat, lights etc. and appear high but are not actually. Major repairs are usually done by “special assessments” on the owners to cover the costs. Except in co-op's property taxes are not usually included in maintenance fees.
What is a contingency fund?
It is a portion of the monthly maintenance fee (minimum 10% require by law in B.C.) that goes into a long-term fund (contingency) that deals with items that are not part of regular scheduled monthly maintenance such as roofs, painting and unforeseen emergency repairs.
Why should I read the minutes of the strata council meetings?
The minutes should detail what problems exist or have existed and if there is enough money in the contingency fund to pay for any repairs or maintenance that may be required. If there is not enough money available you can expect to an assessment of the proportionate amount.
BUYING TIP :
Never ever buy a condo (other than new) until you have read the minutes of at least the past 12 - 24 months strata council meetings and any other documents associated with the strata unit. New Condos: Make sure you read and understand the developer's disclosure statement
THE PURCHASE
I like it! How do I make an offer?
You 1st offer should not be an insult to the seller. Review what similar homes in the area have sold for. The offer should be within a range of value that will give you a response. “The tendency to make a really low offer is very enticing,” admits Don MacKay, Manager of Amex Broadway West Realty. But be warned, “This can backfire because the seller may be so upset at how little the buyer liked their home they may suddenly refuse to sell it to them.” Remember the house you are buying is someone's home. A too low offer may be taken personally. Please! Don't get overly emotional, this is a business transaction. If the market is very active, or this is a special home, your 1st offer may be your one and only chance to own it. Discuss all offer details with your REALTOR® before making any offer.
How can I be sure I'm getting the place at fair market value?
You know you are paying fair market value because you've looked at other similar homes in the area compared their recent selling price to your purchase price and discussed this with your REALTOR®. Make sure you have reviewed recent sales and make the comparisons. Don't get hung up on the one home that sold for a lot less, sometimes sellers are desperate, most times they can wait. In hot markets MANY HOME SELL FOR MUCH MORE THEN ASKING PRICE, seek you REALTOR'S advice.
Can I protect myself against unforeseen repairs?
New Home buyers can protect themselves against loosing their investment through Third Party Home Warranties. These are now offered by various companies and are required by law on all new construction, (except for owner built & occupied) as a protection package for buyers of new homes. This protection covers against the developer going bankrupt or faulty construction. A qualified inspector should inspect all properties. Sellers are required to disclose all information they have about the property, (The Property Disclosure Statement.) This should not be relied on, BUYER BEWARE !
Can I change my mind?
Yes, you can withdraw your offer any time prior to its acceptance by the seller. This must be communicated to the seller preferably in writing noting time of day & date. However if there is any doubt that you are going to proceed, a “subject to” clause in the contract would provide you some protection and an opportunity to “escape”. However such clauses should only be used if you have genuine concerns about the property. Some “subject to” clauses are subject to financing, subject to inspection etc. Seek your REALTORS ® advice .
When can I move in?
Most moves are made within 30-90 days of buying, but some have been extended to many months and in a few cases years This is always worked out by mutual agreement between the seller and buyer. Sometime you can save a considerable amount of money by allowing the seller to pick the moving date.
MORTGAE D EBT & DOWN PAYMENTS
How much can I afford?
The amount you can afford is based on the amount of debt you can pay off. The amount of debt you can take on is based on much consideration, your credit worthiness is most important. Your percentage of debt to income has limits. Some properties can be 100-115% financed. Every purchase requires different situations. You should call on a full service mortgage broker, (no cost to you) and discuss financing options before looking for a home. Even if pre-qualified your mortgage still has to approve by the lender. Don't remove financing subjects until you have a commitment letter from your lender. There is usually room for negotiation, talk to you lender about your qualifications.
How much down payment do I need?
You need 15-25% down for a conventional (Not CMHC insured) mortgage. If you can't afford that, Canada Mortgage & Housing does offer insured mortgages up to 100% of the home appraised value. Which means you can buy a home with as little as 0% down. For some qualified buyer it is possible to buy with 0% down, however there are extra charges. There are restrictions, consult your Mortgage Broker or REALTOR®.
If I can afford it, should I put more into the down payment?
The more you put down, the more you save later. Consider the taxes you are paying on the interest/income on your savings/investments. Rather than paying the government, put some of that money into your mortgage. This will lessen your interest income and save some taxes.
Why do I need a deposit?
Money talks! If you are serious about buying a property you will be asked to pay a deposit to show you are bargaining in good faith. Often the amount of the deposit (usually 5-10% of purchase price) is the deciding factor if there is a competing offer.
Is there government assistance available?
There are few government giveaways. In B.C. there is some property transfer tax relief for qualified buyers of certain homes. CMHC-approved 0% down payment. The criteria used by CMHC are Principal+Interest+Property Taxes+Heating+50% of condominium fees can't be more than 35% of your gross family income. Your total debt ratio can't be more than 35% of gross family income.
Also there is the use of RRSP funds allowed up to $40,000 for qualifying couples.
Where can I get financing?
There are many sources of financing—credit unions, banks, trust companies, insurance companies, mortgage brokers and private investors. A Mortgage Broker acts on your behalf to get the best mortgage rate. The Mortgage Broker's fee for residential mortgages is usually paid by the lender. Your Broker or REALTOR® will explain the financing details with you.
Long term, short term, fixed or variable rate mortgage?
Long term and short term are time frames of the mortgage contract. Short terms are usually for 6 months to 1 year. Long terms run from 1 - 25 years. This is not the time period over which the mortgage must be repaid. The time over which a mortgage must be paid is the amortization period, usually 15-25 years. A shorter amortization period can save you many $1,000's over the term of the mortgage. Fixed and variable rate refer to the permanence of the interest rate. A fixed rate is just that, fixed over the term. Variable rates usually change every month based on the rate set by the lender usually based on the bank prime rate. Long-term mortgages make for better night's sleep.
Do I have to pay monthly?
Not necessarily, you may pay bi-weekly or weekly, the faster you pay off your mortgage the more you save. Make sure the payment is deducted and applied at the time of payment if the payment period is less than monthly.
Is it worth it to pay off the mortgage early?
Yes! The sooner you pay off the principal on your mortgage, the more money in your pocket over time. Most mortgages have a prepayment clause that allows you to pay up to 5 -20% of the original balance each year without penalty. Payments do come from after tax dollars.
Should I pay off my mortgage before I start investing in a RRSP?
It depends on you individual situation. Consult your financial planner. Many financial advisors suggest you put you money in a RRSP and pay down the mortgage with your tax saving.
When should I consider refinancing?
You should consider refinancing when there is a difference of 2% or more between the interest rate you are currently paying and the current market rates. Even if rates fall below what you are paying it doesn't mean you save money. Penalties and charges may cost you more than you save. Make sure you determine all costs before refinancing; your REALTOR® can prepare an amortization schedule for you explaining the cost/saving.
Do I need mortgage insurance?
Most lenders require it. You should have it, but buying mortgage insurance from an outside agency is usually much less expensive then buying your lenders in house package. Ask you insurance agent.
REFINACING TIP: Consider refinancing when rates fall 2% below your current rate and you intend to stay in your home for more than 2 years. Never renew your mortgage without comparing market rates to your lenders offer to renew.
The sale. What happens?
Buyer and seller sign the contract of purchase of sale. Buyer pays a deposit in trust to the agent.
Agent puts deposit in trust account and files a sales report with agent.
All subjects to, including inspection(s) , clauses in the contract are met and removed in writing
A letter (with all necessary information) is sent to the sellers and buyers lawyer/notary; copies to buyer and seller.
Lawyer/Notary attends to clearing all title, securing mortgage funds, and preparing closing statement. Buyers and sellers are usually required to sign a Trust Release Form ahead of time—this insures all funds are available on time.
Lawyer/Notary contacts buyer and seller to arrange appointment for signing documents. This is usually done 5-10 business days prior to completion date. You are told how much cash, (usually a certified cheques) will need for completion.
Seller and buyer sign documents. Check you statement of adjustment carefully and if there is
anything you don't understand, ask for an explanation before you sign.
On completion day, L awyer/Notary registers change of title at Land Titles Office and disperses
funds to seller.
Seller receives funds and instructs agent to release keys to the buyer.
Buyer takes possession on date and time specified in contract.
Once the excitement of getting your offer accepted and subjects removed is over there is period where nothing happens and you have to wait until completion time.
HELPFUL MOVING HINTS
Utilities and Services
-Hydro/Gas
-Water
-Garbage (special pick up)
-Phone
-Appliance service
-Cablevision
-Fuel
-Water treatment
-Pool service
Lawn & garden services
Professional services
-Doctor
-Dentist
-Lawyer
-Broker
-Veterinarian
Business accounts
-Banks
-Finance companies
-Credit card companies
-Diaper service
-Charge accounts
-Department stores
-Insurance agents
-Real Estate agency
-Service stations
-Laundry/Dry cleaner
-Druggist
-Cleaning services
Government and Public offices -
Federal
-Post Office
-Veteran's Affairs
-Revenue Canada
-Family allowance
-Old age security
- Canada Pension Plan
-Unemployment insurance
-Maternity benefits
Provincial
-Health and hospital Insurance
-Motor Vehicle registration
-Driver license
Other
-Company pension plan
-Union pension office
-Newspapers
-Magazines
-Mail order houses
-Book and record clubs
-Baby Sitter
-Personal Friends
