So, you are a first time home buyer? This is likely the biggest financial investment you have ever made. It is both a massive step forward in your financial security and an equally massive responsibility with a lot to learn. Don’t be daunted though, we’re here to help you every step of the way and this guide will offer all of the core steps you will need to take towards purchasing your first house, townhouse, or condominium in Vancouver.
Build your list of dream features
This is the fun part. Start thinking about all of the features you want your ideal home to have. How many bedrooms do you need? What kind of outdoor space do you want? Will you be specific about what type of aesthetics you want? Will you require modern counter-tops, appliances, and floors or are you OK with something more traditional or rustic? What neighbourhood do you want to live in and what views or local amenities will it include? Does sun exposure matter? If you garden you may have a preference of a south facing backyard. You should also start sorting these features out into wants versus needs – what must you absolutely have and what could you do without. It is also important start thinking about what your ideal house should not have. Knowing your includes and excludes will help you and your agent understand your needs.
Get pre-qualified for a mortgage
The single most critical step in the selling process will be finding out how much capital your bank (or a third party lender) is willing to allow you to borrow. When pre-qualifying for a mortgage, the lender will look at your yearly income, any outstanding debts, credit history, and what you can offer as a down payment on the property. Note that if you are only putting 5% down on your property, you may need to pay additional CMHC insurance on it. Pre-qualifying will ensure that you know the size of mortgage you can acquire, before you start looking at homes so you can focus your search within a specific price range. Being proactive about this step in the process simplifies the search process, reduces uncertainty and stress, and eliminates the risk of taking on a property that is beyond your means.
Select your agent and legal team
Buying a house, townhouse, or condo in Vancouver is going to be the biggest purchase you’ll ever make – but we’re here to help you every step of the way. You will also need to select a mortgage broker (representative of the lender) to discuss financing options and a lawyer to handle legal details of your transaction. We’ve got many of good options for you that can help with the facilitation of your home deal. Feel free to interview multiple candidates and look to your network for references.
Get on the hunt
After you have squared away your pre-requisites and financing, you are officially ready to start your home hunt. Between the custom online listings your realtor sends you and the ones you find on MLS or other property search databases, you can begin to narrow down your search within your criteria. One you have shortlisted options from these online previews it is time to go out to look at homes. You may begin with a very refined list of includes and excludes for your ideal home’s features and end up completely tossing some or all of them! More often than not we’ve seen buyers actually view a home in person and find that it just “feels” like the right fit.
Make an offer
When you think you have found your dream home, ask yourself the following: does it satisfy most your wants/needs, is it in your price range, and does it feel right? If you answered yes to all of these then you are probably ready to make an offer. You may lose some sleep, but this process is an exciting moment in your life. We begin by drafting the Contract of Purchase and Sale (CPS). This legally binding document contains everything from the price you are prepared to pay, to the inclusions you want (chandelier, TV brackets,etc), to your ideal closing date (the date you take possession), and other conditions that need to be met in order to complete the deal. Once you’ve submitted your offer one of three things can happen: the seller can choose to accept it, reject it, or present a counter offer. If there is a negotiation process, you may need to compromise on a few smaller things but we will have your back the whole way to ensure that your needs are met and exceeded. We recommend to our clients to view property that are 10%-15% under their budget to allow for wiggle room if the seller counters or in the event of a bidding war.
Completing the deal
Only in rare cases or exceptionally hot markets (like Vancouver has seen in recent years!) will a deal contain zero conditions and be “firm” upon acceptance. Conditions are requirements specified by the buyer or seller within the CPS that must be met for the sale to go through. As a first time home buyer you will likely write in a “subject to financing” condition to allow for confirmation on the mortgage before you commit fully to the deal. Other conditions include inspections And of course, you’ll need to submit a deposit–an amount up to 5% of the purchase price, which is held in trust until close. Once the conditions have been met, the agreement is firm, and now it’s just a matter of waiting for your closing date. Congratulations on your new home!
