How to Buy a Home in B.C.


Purchasing real estate is exciting but can be complicated. Whether you are a first time home buyer or already have a home, you're in the right place. 

We've written this guide to explain the process in a simple, straightforward yet comprehensive manner. Our hope is that it will help you prepare to buy, understand the process and know what to expect. 

We prioritize transparency. Feel free to reach out with any questions, and we'll be delighted to provide answers,

PREPARATION

Pre-Approval

You should be pre-approved for a mortgage amount before you view properties. To get pre-approved, our suggestion is to always shop around for a rate, including at your primary financial institution. You can also use the services of a mortgage broker to do the shopping for you.

Mortgage Brokers are paid by the lenders, so it is not an extra cost to you when using one.

Budget

Just because you get pre-approved for a certain amount, that doesn’t mean you should spend every penny on the home. Consider your monthly (or preferred schedule) payment and remember to take into account the costs of purchasing, covered in detail below in the section on costs.

Find a Realtor

Search on Google, check reviews, ask friends for referrals, and vet Realtors through their social media to find out who they are as people. We all work differently, so think about what you want from an agent, and don’t be afraid to interview a bunch. We’re happy to take you for coffee!


SEARCH

Online

It’s super easy to search online for properties, and the best place to start.  There are many public sites that are linked to the MLS, so use what you are comfortable with. 

Some examples of public real estate sites are Realtor.ca, Rew.ca and this site. Click the leaf to take you to the home page to access the listing search bar.

In Person

You will need a Realtor to see properties in person. Unless a home is for sale by owner, you will not be able to contact the homeowner. If you independently schedule home tours through real estate websites, note that each platform operates differently. 

Booking via realtor.ca connects you with the listing agent, who solely represents the seller and can't assist with offers. Utilizing other sites like rew.ca connects you to a Realtor who has paid for this service.

Protecting your Position

When viewing homes in person, always assume you are being listened to and watched by cameras. Avoid revealing your position by refraining from discussing your likes and dislikes about the property.

 It's ok to ask your Realtor, "can we look into a, b or c", but best practise is to bring a notebook or jot down your thoughts on your device.  Wait til you have completely left the property, driveway included, to discuss your concerns, excitement and intentions.

NEGOTIATIONS

Offer

Your offer will be prepared using a Contract of Purchase and Sale (CPS), an extensive legal document developed by the BC Real Estate Association and the Canadian Bar Association, BC Branch. Most everything on the CPS is negotiable, with room for many more items like subjects. 

Typical necessary upfront negotiations include, but are not limited to, the price, possession dates, items included in the sale, and necessary repairs. It's common for a few changes or amendments to be exchanged during negotiations as all the details are finalized.

Subjects (aka Clauses aka Conditions)

Subject to Clauses state you will proceed with the purchase only IF and WHEN certain criteria are met, therefore your offer is “Subject To” your requirements. There are more standard clauses that one can count, and clauses can be written from scratch based on your needs.  

Examples of common subjects are: that you are able to secure financing, the house does not show anything material in the inspection, and that you are able to secure insurance on the property.

Subject Removal

You will have an agreed upon time frame in which to do your due diligence to satisfy your conditions. Once you are satisfied that all your conditions are met, you will remove your subjects and hand over the agreed-upon deposit. 

The sale will now be considered firm and thus legally binding to both parties. 


Deposits

Your deposit is usually due within 24 hours of subject removal. If you have made an offer with subjects, and one or more of them could not be satisfied (e.g., you could not secure financing), you will owe no money. Once you have removed subjects, you've committed to fulfilling the contract, and your deposit is required.

Deposits are generally 5% of the purchase price and are held in a trust account at your Realtor's brokerage until the completion date. No money is ever given to, nor held by, any individual Realtor or team of Realtors.


COMPLETION

Timing

There will be a certain amount of time between your subject removal and you taking possession of the home. Generally, this is the time you require to pack, prepare to move, and for your notary or lawyer to complete the transfer. 

Both parties will have agreed to these dates in the CPS, and although there is no standard timeframe as it’s completely negotiable and depends on the needs of both parties, 2 months is generally a normal timeframe.

Possession & Adjustments

Your completion date typically one day before your possession date, which also serves as your “adjustments” date. Adjustments involve determining the percentage of property taxes you will assume for the year, city utilities, and managing tenant security deposits, among other things. 

Your notary or lawyer, whom you've hired to complete your purchase, will handle these details.

Keys

You will have a negotiated a specific time (usually 12noon) on your possession date to receive the keys to your new property. Your Realtor will manage the process of providing you with the keys and any other negotiated items outlined in the CPS at that designated time.

COSTS

Property Transfer Tax

The P.T.T. is a tax on home buyers and the rates are as follows (based on the purchase price): 1% on the first $200,000, then 2% up to and including $2,000,000, then 3% greater than $2,000,000

If you are a first time home buyer, or are purchasing a new build, you could qualify for an exemption. To find out if you qualify, visit the BC Gov Page.

G.S.T.

If you're buying a brand new home or one that has undergone substantial renovations, G.S.T. will be charged. If you perceive any ambiguity in a potential purchase, we recommend seeking advice from a lawyer specializing in such matters.

Insurance

Your lender will require you to purchase home insurance and rates will depend on many factors including the property itself and the lender.

Appraisal

If you have a mortgage for your new purchase, chances are your lender will require an appraisal, and chances are they will charge you for it. Costs vary between $500-$1000 depending on the property.

Moving

Always dependent on how much stuff you have and how far you're going!

TIPS, STRATEGIES AND SAVINGS

Subject to Sale Offers

If you currently own a home and need to sell it to purchase a new one, you may utilize a subject-to-sale clause. This essentially means you will only agree to make the new purchase if you can successfully sell your current home. Subject-to-sale offers will protect you from committing to a new home and not having the funds available. 

Subject to sales do happen, but they come with caveats; sellers may be hesitant to accept them and you may be forced to remove all of your subject at short notice if the seller receives a back-up offer. To increase the likelihood of acceptance, meticulously plan the sale of your current home and communicate this with the sellers.

Down Payment Assistance

HBP: The Federal Home Buyers' Plan enables qualifying first-time purchasers to take out a maximum of $35,000 from their registered retirement savings plan (RRSP) for use in a down payment. This withdrawal is exempt from taxes and must be reimbursed over a 15-year span.

FTHBI: The First-Time Home Buyer Incentive offers varying percentages of the purchase price for different types of properties, such as 5% for existing homes and 5% or 10% for new construction homes. These interest-free loans must be repaid within 25 years or upon selling the house, with a shared equity component requiring borrowers to repay a percentage of any home value increase.

The HBP and the FTHBI CAN be combined.


P.T.T. Exemptions

There are two ways to save on the P.T.T.: be a first time home buyer OR purchase a new build. The exemption is available on properties priced up to $500,000 (and a partial exemption on prices up to $525,000) and on purchasing a new build up to $750,000 (and a partial exemption on prices up to $800,000).

Don't Do's: Offer to Completion

Avoid changing jobs, making significant purchases, or applying for new credit such as a car loan or credit card. If any such circumstances arise, it's crucial to discuss them with your lender or mortgage broker.

Building your Credit

VARIETY: Establishing a mix of credit with different creditors and not just a Visa and a MasterCard.  The golden 3 are a credit card, a car loan and a credit line.

PAYMENT HISTORY: Pay on time, and consistently. If you can’t fully pay the total amount on your credit card, pay at least the minimum.  

CAPACITY: Keep your balance owing under 65% of the limit.  For example: if you have a credit card with a $1000 limit, don’t use more than $650.  Getting close to, or exceeding, your limit will have a negative impact on your score.

If you are a younger person and are hoping to be a first time home buyer, lenders do recognize that you may not have much credit history. Aim for a score of 680+ and you’re well on your way to a pre approval.  


Backing Out Of An Offer

B.C. has an automatic rescission period allowing you to back out of an offer without providing a reason. This period spans three full business days from the time of your initial offer and is separate from any subjects you include in your offer. Keep in mind that if you choose to exercise this option, it will come at a cost; 0.25% of the purchase offer amount will be owed to the seller.

If you pass the rescission period and remove your subjects, you have agreed to the purchase, and the contract becomes legally binding.

Offering Subject Free

Subject-free offers over the asking price were common in recent times. Although we don't anticipate this becoming the norm again, certain market conditions or your desire for a sought-after home may lead you to consider this option. 

While subjects are designed to protect you, if you believe the benefits of a subject-free offer outweigh the risks, be aware that you will be purchasing the property as-is/where-is. You have a 3-day rescission period for precisely this scenario. After these 3 days, you will be committed to the purchase.

What You Need To Know About Working With Buyers Agents

When we show you a home, we have no affiliation with the listing and or sale of that home whatsoever.  The home will have a listing agent that is designated to protect the best interests of the Seller.

* If you request to see a home of which we are the listing agent, we will disclose this to you immediately and recommend you retain the services of another Realtor.

We are representing you  in an offer to purchase the home. We will be negotiating on your behalf,  so what's important to you, is important to us.

* It is against the law in B.C. to advise both seller and buyer in a single transaction; unless the property is so remote there are not 2 or more Realtors practising in the area.

There is NO FEE when working with us to purchase a home. The seller pays the commission and it is split between the seller's agent and the buyer's agent.

Your rights, your privacy and required disclosure forms

Below are the disclosure forms that are required by the government at the start of any buying or selling transaction.  These forms explain what your rights are, what we as Realtors owe you and how we use your information. Click on the forms to enlarge.

Say Hello and Grow With Us

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