Buyers:
It is easy to get swept up in the fun and excitement of purchasing a home, but I believe, given the size of the expense and commitment involved, that certain steps should be followed first. Here is my suggestion on how a Buyer should approach the market.
FIRST: Visit your Banker and get pre-qualified. Have a solid knowledge of what your monthly payments are going to be and what you can comfortably afford. This will save you a great deal of time, energy and maybe disappointment.
SECOND: Choose a Realtor to work for you – a Realtor who knows the area, is experienced and knowledgeable, is a full-time Realtor, and is very available, compatible and recommended. You do not have to deal with the Listing Realtor when purchasing a home; you can use whom ever you choose. The fees are split generally 50/50 between both the Selling and the Listing Realtors. You can also hire a realtor when purchasing unlisted properties (For Sale by Owners), and arrange a fee agreement with the Realtor if the Seller is unprepared to pay for the Realtor’s services.
THIRD: If you already own a home and are planning to sell it, determine what the market value is. (Your Realtor will be happy to help you price the home.) This will have a direct bearing on what you can afford to purchase. Do not overestimate the value of your own home..
FOURTH: Determine what it is that you want! A big yard or a small yard, three bedrooms or six bedrooms, a formal dining area, an ocean view, privacy, quiet area, close to schools, the list goes on. Then view some homes and see where compromises can be made based on availability and price. (We all want the little cottage on the waterfront that requires no work, for $100.00!)
FIFTH: Get to know the market. Look at five or six homes which are close to your criteria for comparison-shopping. That way when they sell, you will know what they were listed for and what they sold for. Your Realtor can also give you a detailed list of comparable homes, which have sold, to help you assess the market value of the home you like.
SIXTH: If you are planning to renovate a home, determine the costs. Building costs always seem to be at the highest when you are building or renovating and friends and family always seem to become scarce.
SEVENTH: Uncover all of the costs of changing homes.
Costs of transferring title on a home is approximately $600.00
Costs of registering a mortgage on title is also approximately $500.00
Property Transfer Tax:
Property Transfer Tax is 1% on the first $200,000.00 and 2% on the Balance. If you are a first-time buyer and have been a BC Resident for the past two years, then the BC Property Tax maybe waived. Mobile Homes, which do not have an interest in land
GST:
GST (5%) is only applicable on New Construction or newly created raw land. If you qualify for the GST rebate, it is approximately 35% of the total amount of the GST owing.
Survey Sketch/Title Insurance:
These costs will vary according to the property; therefore, it is best to discuss the details which are most suitable for you, with your banker or lawyer.
Property Insurance:
If your home is to have a mortgage registered against it, then it must be insured against loss and damage. Today, insurance companies require the home to be in a good condition, with upgraded wiring, plumbing, and a decent roof.
Real Estate Commissions:
If you are purchasing, then you generally do not pay any fee to your Realtor. They are paid from the commissions payable from the sale proceeds.
If you are selling your home in order to purchase, then Real Estate fees should be factored into the total cost.
And Last but Not Least: USE A REALTOR
Buyers seem to think that they can get the "best deal" and "save the commissions" by buying privately. But given that it is the Seller who pays the commissions, it is actually the Seller who is saving the fees, and the Buyer is left having to negotiate and price a home without any professional help or guidance.
