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The basics of buying a home

Establish your needs and wants

Begin your search for a new home by making a careful assessment of the kind of a home you need and want. Do this in writing. Take a moment, right now, to be as specific as you can about your particular requirements. How many bedrooms do you need? How many bathrooms? Do you need a yard or a garage?

Determine how much home you can afford

Decide how much you can afford to invest monthly for your house payment. Most lenders want you to spend no more than 32% of income for mortgage, or have more than 42% total debt (car payments, credit cards, mortgage etc.) Some lenders will add heating costs and property taxes into these ratios.

Get pre-qualified or pre-approved by a lender

You can save yourself a lot of time and heartache by meeting with a lender before you start your search for a home. A lender can let you know what specific mortgage would be best for you. They can also help you understand what it takes to qualify for a mortgage by taking a look at your credit history, and can usually give you the amount of the mortgage you qualify for...at this point you may not want to pay out each month what you qualify for...ask the lender to give you a mortgage amount and payment based on the the amount YOU feel comfortable with. Have them cover how you can save interest by increasing the frequency of your payments.

Find a good Realtor to help you

You can learn a lot about an agent by just letting them talk to you about how they help buyers.

Ask your buyer's agent these questions:

  • Are you knowledgeable about the area and price range we are interested in?
  • Do you have the time to work with me?
  • How will you let me know when new listings come on the market?
  • What professional designations do you have?
  • How many home buyers have you helped?

Find a home that fulfills your requirements analysis

Five tips for successful home hunting

  1. Keep an organized record of all your research. Ask your buyer's agent for an "MLS print-out" of all home you visit so you can keep them organized in a binder. Write your comments, likes, and dislikes on the MLS detail sheet for each property. Discard those that aren't good enough.
  2. Make sure that your realtor is aware of your time schedule and expectations. Do you like to look at one or two homes in a session? Four? Eight? Discuss this with your agent.
  3. Tell your realtor about any homes you see that interest you and that you'd like to know more about. This includes homes you've explored in the area yourself, or those advertised in the newspaper. Note: When you call the selling Realtor for information you may get unwanted attention and calls unless you always deal through your buyer's agent.
  4. If you want to spend time driving around by yourself looking at homes, ask your agent for a 'drive-by' list. Your realtor can make appointments later to show you the interior of those that appeal to you.
  5. Express you likes and dislikes to your realtor after you look at a house. This way, your Realtor can help you better.

Make an offer to buy a home

Your buyer's agent can help you write an offer to buy the house you want. Always insist on a home inspection, title search, and market analysis of comparable homes in the neighbourhood. Your Realtor can provide you with a historical list of selling prices for all properties, on and off the market.

It's important to note here that if your Realtor is inexperienced at negotiations and structuring offers it could cost you thousands of dollars. Education, training, and experience count when writing an offer. Luke Kolk has helped hundreds of local homeowners since 1991.

Be aware of the costs involved when buying a home

  • B.C. 1% purchase tax. First time home owners may be exempt.
  • Legal costs range from $600 to $1000 depending on the lawyer you choose. Shop around for the best price.
  • Appraisal fees. Banks will normally pass this on to you but you can ask them to include the cost as part of the mortgage agreement. Fees are around $200.
  • Home inspection is well worth the investment. This is mandatory for safety's sake. The cost is around $250.
  • Don't forget moving costs. This can range from zero to thousands depending on how much work you want to take on.
  • There are extra costs involved if CMHC is involved in the mortgage, if you have less than 25% down.
  • Home and contents insurance is recommended for all homes, even strata properties.
  • Fire insurance is mandatory and required lenders.

Please call or email us at Info@IslandHomeSales.com for more information on buying a home or recreational property.