Things to consider when purchasing a home

Whether you are a first time home buyer, experienced investor, upsizing for a growing family, or downsizing for retirement, purchasing real estate is a big decision and an exciting step to take!  There are many considerations to include in your house hunting adventure.  Here are some questions you should ask yourself to help guide you in the right direction:


Have you talked to your bank or a mortgage broker to get pre-approved for mortgage financing?

Knowing what you can afford is one of the very first, and most important steps to take.  Talk to your bank or a mortgage broker to get an idea of your budget range and mortgage financing options.  Your REALTOR® will work with you and your budget to find a suitable home without breaking the bank.  Also note that any changes to mortgage qualification rules may affect how much you can borrow.  If your pre-approval is dated, you should check back in with your lender to see if the budget you can work with has changed at all.


Are you aware of additional costs?

When it comes to purchasing a home, there are costs to consider in addition to the purchase price.  These can include, and are not limited to:

  1. Property Transfer Tax – This is a tax that is charged when you purchase or gain an interest in property that is registered at the Land Titles Office in the province of British Columbia.  At the time of writing, property transfer tax is calculated based on the purchase price at 1% on the first $200,000 plus 2% on the balance up to $2,000,000 plus 3% on the balance up to $3,000,000 plus 5% on the remaining portion that exceeds $3,000,000.  Exemptions do apply on newly built homes priced up to $750,000 with partial exemptions on new builds priced between $750,000 – $800,000.
  2. Additional Property Transfer Tax – This tax applies to foreign nationals (not Canadian citizens or permanent residents) or foreign corporations (not incorporated in Canada, or incorporated in Canada but controlled in whole or in part by a foreign national or foreign corporation).  At the time of writing, the additional property transfer tax rate is at 20% of the purchase price.
  3. Goods and Services Tax (GST) – This is a tax charged on newly built homes, or in some cases, home that have undergone major extensive renovations.  At the time of writing, the GST rate is 5%.
  4. Home Inspection – If you are not planning to demolish the home you are considering as your next purchase, a home inspection performed by a licensed home inspector is highly recommended.  The purpose of a home inspection is to provide the Buyer with unbiased information about the property in order to make the decision of whether or not the property is a wise investment.  Not only will you be made aware of any potential issues that may otherwise have gone unnoticed, many inspectors will also provide tips on how to maintain the home in the long run.
  5. Legal Fees – A lawyer or notary of your choice will be involved in completing the purchase transaction.  Check with your lawyer or notary to see what their fees and charges are.
  6. Moving costs – Depending on whether you need to hire professional movers, or if you have friends and family you can count on to help you move, costs will vary accordingly.  If you are moving into a strata (eg. apartment building) you will most likely need to pay a move-in fee and possibly a refundable deposit – check the strata rules and by-laws.
  7. Home insurance – The decision of whether or not to purchase home insurance is up to the home owner.  However, it is something I would highly recommend for peace of mind.  Insurance plans range in price and coverage, so stop by an insurance company to get a quote.


What are your needs?

While we all have dreams and may have a long wish list of things we would like, focus on what is essential for you.  Everyone’s needs will be different depending on their stage of life.  Do you have a young family where you will need extra space to grow into?  Consider location for schools and activities for your children.  Or perhaps you are downsizing – after all the unnecessary clutter that has been collected over the years has been thrown out, how much space do you really need?   Do you like the hustle and bustle of the city centre, or do you prefer the quiet suburbs?  How many cars do you have, and how many parking spaces will you need?  Or perhaps you do not own a car and need to be close to transit?  Do you need to be in a pet friendly building?  Identify your needs and priorities, make a list, and share it with your REALTOR®.


Are your requests realistic?  

Keep expectations at a realistic level.  Know that REALTORS® are not magicians – we work with what is available in the market, but we will strive to find you the best options possible that suit your needs.  That being said, you cannot expect to live on the most tranquil street, but also have the convenience of a skytrain station right at your doorstep.  You also cannot expect a penthouse with million dollar panoramic views at the price tag of starter home.

Don’t know what’s realistic in today’s real estate market? — Ask me!