A timeline of what to expect when buying a home and how to set yourself up for success at each stage of the process:
You can count on us to advocate for your best interests every step of the way.
Budget and goals:
Jumping right into things, setting yourself up for success starts with getting clear on your budget.
Pre-approval:
You will want to meet with a mortgage broker or specialist to get a better understanding of what you can afford, commonly referred to as a “pre-approval”.
There are some first time home buyer initiatives available that you will want to consider, a common one, and one that we used, is utilizing funds from your Registered Retirement Savings Plan (RRSP) for your down payment. If you’ve never owned interest in property before, you can pull out $35,000 as an individual, or $70,000 as a couple, from your RRSPs tax-free to use towards the down payment on your first home.
Rate hold:
Ask your mortgage broker or specialist for a rate hold. Rate holds are typically provided for 120 days and will provide you peace of mind if rates are changing during your home search.
It is important to note that you should not open new loans, change jobs, or make any other big financial decisions that could impact your mortgage pre-approval during this time.
Other costs:
While your down payment and mortgage pre-approval will be the biggest part of your budget, there are other costs you will want to include.
The most common additional costs associated with buying a home include a home inspection, lawyer fees, and property transfer tax, with property transfer tax being the largest additional expense.
There is an exemption on property transfer tax for first time home buyers purchasing a property for $500K or under, or partial exemption for $525K or under; however, as you can imagine, with home prices as they are in Victoria, this exemption often isn’t applicable.
That’s an overview on budget, we’ll always encourage you to connect with a trusted financial advisor for their expertise but we’re happy to provide guidance on the right questions to ask.
The search:
Once you’re confident about your budget, take some time to establish your non-negotiables based on your goals for the property.
We will have a conversation about your goals to help streamline our search and we’ll set you up on the MLS, which stands for Multiple Listing Service.
Once we set your parameters on the MLS, you will get notified regarding new properties that come on to the market that are within your price range, meet your non-negotiables, and vary on other features that are important to you, but are not necessarily a dealbreaker.
Final note for this section, it’s a long one but it is the foundation, your preferences may change once we begin viewing homes – and that’s ok, it’s a natural part of the process and we’re with you every step of the way.
Your real estate team:
Asides from your real estate agent, there are a number of professionals involved in a real estate transaction, as we mentioned above–your mortgage broker or specialist–also, a home inspector, insurance broker, and lawyer.
Back in 2021 we did a series on our YouTube channel, From Contract to Close, where we interviewed some of these professionals to give more insight into their role in the transaction, so feel free to check that out if you’d like to hear from their perspectives.
We are always happy to give a few recommendations and we’re grateful to work with industry professionals who share our service philosophies and help look after your best interests.
Making an offer:
This part is exciting but it can also feel the most daunting, it’s our job to help provide you with a clear understanding of what the home should likely sell for given the state of the market and recent comparables, and from there we’ll consider the length of time on the market, how the property has been priced, and whether we’re competing with other offers, to help determine our offer strategy.
The key parts of every offer:
– Purchase Price
– Deposit Amount
– Possession Date and Closing Date
– Subjects (or Conditions).
We go through these in more detail in our Home Buyer’s Guide, which you can download for free when you sign up for our monthly newsletter, or reach out to us directly and we’d be happy to send you the download link.
Buyer’s Rescission Period:
As of January 2023, even “unconditional offers” (with no subjects) include a non-negotiable three-day buyer’s rescission period, with a 0.25% penalty for rescission paid by the buyers.
This legislation was put into effect to help offset the risks that buyers were taking on by submitting unconditional offers in order to compete in an out of balance market.
This risk was characteristic of the 2021 market, where properties were receiving a high number of offers, in a very short time on the market, driving prices up and resulting in people submitting unconditional offers as a way to make their offer more attractive to sellers. Subjects are otherwise a common and normal part of an offer.
Simply put, this legislation was a little too late, and it doesn’t play much of a role in today’s market, but it is nice to know that this protective measure is now in place, and it will play a more significant role should market conditions change again.
It is worth noting that three business days is not typically enough time to approve financing, so the main goal here is to allow time for the buyers to get a home inspection.
Otherwise, if you have other subjects in your offer, the three-day rescission period is negated, and there’s no penalty for not completing.
Common subjects:
And on that note, the most common subjects of an offer are: a home inspection, financing (this is where your pre-approval provides assurance), insurance, title search, and also strata document review for those buying into a strata.
Another subject, which we don’t see much of in a highly competitive market, is “subject to sale” which is helpful for homeowners who want to find a property before they sell theirs. There’s lots of details we could go into involving a subject to sale, please don’t hesitate to reach out to us if you’re curious about this option for yourself.
This is where communication and relationship building really counts in real estate, and we pride ourselves on our ability to negotiate effectively, with respect, and with a solution-oriented mindset.
Closing day and beyond:
The best part—we remove subjects and you close on your new home! A few days before your closing day, your chosen lawyer will have you come to their office to sign all the necessary paperwork to transfer title to your name.
If the possession date is on the same date as the closing, then we do need to wait until we receive confirmation that title has transferred before you can receive the keys to your new home, and then it’s time to celebrate!
We offer annual home assessments for our clients. This serves as an opportunity to talk about any renovations or maintenance you’ve done on the property and how the market in your neighbourhood is developing. We can also provide recommendations if you’re looking for professionals to help with home maintenance or projects.
For most people, their home is their biggest investment. For that reason, even if you plan on being in your home until the end, it’s nice to have an annual review of your largest asset.
Thank you for trusting us to help you achieve your home ownership goals. Having the opportunity to learn more about your stories, celebrate your wins, and acknowledge life’s changes along the way is a privilege we take to heart.
If have any questions about the market, please don’t hesitate to reach out.
Thank you for being here,
Alex Hughes* and Ricki-Lee Jewell, Victoria, BC Real Estate Agents
*Personal Real Estate Corporation
