Everything You Need to Know About Purchasing Your First Home
by Bryce Hansen
on Friday, November 1st, 2019 at 1:57pm.
The road to first-time homeownership is an eventful journey during which you’ll want to have the best professionals in your corner; a lawyer, a home inspector and your trusted Comox Valley Real Estate agent, Bryce Hansen. As a new homebuyer, you’ll likely have many questions about the purchasing process. We’ve put together a few preliminary things to consider before embarking on purchasing your first property.
Establish your affordability by meeting with your mortgage professional prior to beginning the shopping process. A pre-approval will help you to establish your purchasing budget, down payment figures, and what basic monthly homeownership obligations will cost. Be sure to ask your mortgage broker the details of your mortgage pre-approval such as the interest rate, mortgage terms, any additional fees associated with the application. Additionally, you'll want to find out what your options are for porting your mortgage or if there is a penalty in the event you sell the property. For more information on the mortgage pre-approval process, visit the Government of Canada’s helpful online mortgage article.
Deposit for Purchase
A deposit is the money you submit during the offer process to secure a property you wish to purchase. Consider the deposit a “gesture of good faith” to the seller. A deposit shows the seller you're serious and committed to buying their property; though there is not a concrete figure for the amount a deposit must be, the average deposit in the Comox Valley is approximately 3 - 5% of the purchase price. Your deposit is due within 24 hours of the seller’s acceptance of your offer (unless otherwise stated) and the deposit is then held in trust by your real estate firm until the closing process. Your deposit funds can be used towards your total down payment on the home.
Down Payment Funds
The down payment on your purchase depends on the purchase price of the home. Here in British Columbia, the down payment threshold rules state;
If the purchase price is less than $500,000, the minimum down payment is 5%.
If the purchase price is between $500,000 and $999,999, the minimum down payment is 5% of the first $500,000, and 10% of any amount over $500,000.
If the purchase price is $1,000,000 or more, the minimum down payment is 20%.
Your lawyer will request your full down payment funds and any closing fees be delivered to them within the last 2 weeks leading up to your possession date. Without payment your purchase cannot close and possession will not occur.
Additional Costs to Consider
Home Inspection: ensure your potential purchase isn’t in need of any major repairs or upgrades. A licensed home inspector will review the home in its entirety and provide you with a report detailing the approximate age, condition and repair concerns for many aspects of the home.
Lawyer’s Fees: a real estate lawyer and their team will prepare all closing documents, complete a title search for deficiencies, handle the transfer of funds and complete ownership title transfer for the purchase and sale transaction.
Utility Account Set-Up Fees: enquire with your local utility companies to find out the set-up fee for services such as water, electricity, natural gas or internet.
Moving Services: Comox Valley real estate purchasers who may be moving from the mainland should inquire about any additional ferry costs on top of the cost of the traditional moving truck expenses. Consider if you’ll pack or store your own goods, and the expense of moving boxes, blankets and accessories.
The Bryce Hansen Real Estate Team strives to bring you current and relevant information to ensure you can make an informed and confident real estate decision. For additional advice in regards to your unique purchasing situation, get in contact with Bryce and the team today.