Steps in Buying Your First Home
With Vancouver's housing market sky rocketing with high prices, and outrageous bidding wars, it's important to know what's going on in such a face paced environment. Are you getting prepared to join the craze and look for your new/next home? Here's a couple steps to consider in the home buying process.
1. Get Pre-Approved by a mortgage broker
- Understand how much you can afford.
"Why are you shopping for a 600K property when your budget is 500K?"
- Know your estimated monthly costs.
"Did you include strata fees, property tax, heating, insurance, and closing costs into your calculations and budget"?
- Secure your interest rate for 120 days
"Did you know interest rates are already on the rise? If you're trying to budget your monthly payments, rates can easily rise 0.5% in a month"
2. Find a home, make an offer
- Choose a realtor that fits your needs
"If you're looking in the tri-city area, why are you choosing a realtor that only knows the West Vancouver region?"
- With a bidding market, an experienced realtor will help you understand what the estimated sale price will be. Sellers are listing properties lower than market value so that buyers can will try and outbid each other.
"Example: I've recently helped a client where the listing was for $399K, but BC assessment showed $450K. Comparable properties sold for $470-480K. A clear example that listing prices do not accurately reflect the current housing market."
- Making an offer. Most offers do not have 'subject to financing' in todays market. 'subject to financing' is a grace period for buyers to secure financing before they put down a deposit and secure the property. This is why it's even more important to get pre-approved prior to making an offer.
3. Full Mortgage Approval
- Choose the best lender that fits your needs. Every bank/lender is different, and caters to their clients accordingly.
"Are you looking for the lowest interest rate? Do you want pre-payment options? Do you want portability if you plan to move homes in the next few years?"
- Choose the terms that fits your needs
" 25 or 30 year amortization? Monthly, or accelerated bi-weekly payments? Fixed or variable interest rates?"
- Usually you can get an approval from the bank within 2-3 business days.
4. Home Inspection
- Optional but recommended. A home inspection is like a dentist. At home, you take care of your teeth, and have a pearly white smile. However, the dentist is professionally trained to find any upcoming issues like cavities, or gum disease. A home inspector is trained to spot any issues like mould, leakage, or structural damage.
5. Signing with your lawyer or notary
- This is one of the final steps! Your notary or lawyer is there to confirm that all the files and payments are organized and ready to go. They will have you finalize documentation, and help adjust any monetary value relevant to the transaction.
6. Congratulations, your a new home owner!!
- There's 3 key moments that everything happens
Completion: When the sale is completed, and all monetary value gets sent from the bank, buyer, seller, and lawyers.
Adjustment: When adjustments to monthly/yearly payments such as taxes, utilities, and other charges are paid and charged.
Possession: When you get the keys to your new home!