The condo buying process can be overwhelming at first, but our step by step guide on everything you need to know about buying a house in Vancouver, BC will help you to understand. There is even ways that you can not only make a smart, well-informed decision on your life investment, but also save some of your costs on non-essential spending.
This blog covers significant aspects of your process from getting approved to moving in that will help you secure your first condo with the biggest smile instead of the biggest mortgage debt.
Scroll down to your guide and start getting excited!
Purchasing a condo is a worthwhile decision that can get you both excited and overwhelmed. Contemplating on your
decision of one of the biggest financial purchases that you will make in your life is absolutely vital and healthy. And
in addition to considering the investment itself, you’ll also have to find a place you’d like to live in too!
Before you start letting the internet drive you in all directions while searching for your dream home, consider some
Knowing and understanding what is involved in the purchase of a home and where you will be able to live
comfortably and stress-free is an essential first step in the home buying process.
Having a realtor to guide you through the process of buying a home is an absolute necessity.
The buyer’s agent is there to assist you in the process, help to guide you in the right direction, show you homes and all of the great neighbourhoods, write an offer for you that protects you and provides you with future financial stability, and assist you towards completion to ensure smooth transition.
Luckily, we offer you the guidance you need and the services of the top 1% realtors in Vancouver, all in one place.
You can expect licensees to provide you with such services as:
Learn more about us and what we can do for you by browsing our team achievements.
Your realtor will have a network of mortgage brokers that their clients have used in the past, and your friends and family will also most likely have a recommendation. We have a variety of the most talented brokers in close contact with our team.
Another option is to go to your bank and find a mortgage broker that can assist you with the home buying process.
Your mortgage broker will be able to help you get pre-approved and determine your affordability based on your income and various factors. They also will do their utmost to search for the best rate and term for your case based on your property goals.
It’s fundamental that you hire a mortgage broker who has a good availability and time flexibility, as offers oftentimes happen last minute and in the evening. Having a mobile mortgage broker with a flexible schedule will assist you greatly throughout your purchasing journey.
A mortgage pre-approval is when your mortgage broker has sent in your basic financial information (income, credit score, current debts, etc.) to the lender for review. From there, the lender will have determined the maximum amount of money they will lend you, along with an estimated interest rate and monthly mortgage payment. Many home sellers nowadays will not even look at offers if the buyer is not pre-approved. You understand why that is.
Pre-approval assures the sellers that you are a motivated and ready buyer that is certain of their affordability and not just taking a shot in the dark from an online calculator.
During the pre-approval process, you will need to confirm your down payment and how much you will initially pay upfront.
Minimum down payment rules in BC are as follows:
The amount that the bank is willing to lend you plus your down payment will be the maximum purchase price that you can afford. There are various sources available for your down payment:
Check for more details on the minimum down payment and down payment details, check the Canadian Government Official Page
To complete the transfer of title there are a number of costs in addition to the purchase price that you will need to consider and plan ahead for. Let’s break it down into small comprehensible fragments
some costs are associated with the subject removal period and closing. These are the following:
One of the common subjects to put in an offer is a home inspection clause; therefore, this buyer cost is typically incurred during the subject removal phase.
An independent home inspector will come and inspect the property as well as provide a report on the condition of the home.
The fees range and is typically $400-$900 depending on the size of the home and the extent of the inspection.
If you need a mortgage to purchase, it is common for a lender to hire an appraiser to appraise the value of the property as a part of their mortgage commitment. This is a part of your subject to financing clause, and therefore the appraisal is typically done during that time.
The lender may charge an appraisal fee back to you, this is typically around $300-400. Ask your lender/broker if they cover this cost for you or if you have to pay it.
This fee ranges from $1000 to $1600 depending on complexity of the deal and whether or not they need to order additional documents.
Property boundaries and cannot usually be determined without an up to date Survey Certificate. A survey is prepared by a Land Surveyor and the cost varies depending on the region of the property’s landscape. Your bank may also require that you present a survey certificate that shows exactly where the boundaries of the property are and where the buildings fall within them.
If the previous owners can’t provide this certificate, you’ll have to pay for the surveyor’s fee.
If you are a first time home buyer then you may qualify for a property transfer tax exemption.
In BC the property transfer tax is calculated as 1% of the 1st $200,000 and 2% on the balance up to $2,000,000, 3% on the portion of the fair market value greater than $2,000,000, and if the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000.
If your purchase price is less than $500,000 and you are a first time home buyer that matches the exemption requirements then you are exempt from the entirety of the tax.
All homes pay a property tax and utility fee each once a year. Depending on whether or not the seller has already paid the property tax/utilities, you may have to pay for the portion of time that you are living in the house.
This can often be a large sum of money and is calculated based on the annual cost of tax/utilities, and when you take possession of the property. It is important that you have your realtor and/or notary calculate this for you in advance.
If you are purchasing a strata property such as a condo or townhome, then you will need to pay the difference in the monthly maintenance fee for the time that you are living in the home. You can also ask for the seller to cover this fee as a one time courtesy for your recent agreement, depending on the value of the property.
Many strata’s charge a one time move in fee, and your realtor should verify the move in process and whether a fee is applicable when purchasing. This can typically be found in the bylaws section of the strata documents, and commonly ranges from $100-$300.
Mortgage default insurance for high-ratio mortgages
The federal government requires high-ratio mortgages with less than 20% down payment to be insured against default.
This amount works on a swinging pendulum depending on how much money you put down towards your home purchase. To calculate the amount based on your down payment, use the premium calculator for Canada Mortgage Housing Corporation (CMHC).
It is often possible for you to blend this in to your mortgage payment so that you do not need to pay a lump sum fee all at once.
Many lenders require title insurance before they will advance mortgage funds.
Title Insurance may insure the Lender and the Owner in the event of defects in title that are not readily apparent.
The GST on a new home is 5% of the price.
If the home you are purchasing is a newly built home priced up to $350,000, a GST rebate equivalent to 36% of the GST paid is available. A partial rebate on new homes priced up to $450,000.
an additional 20% of the fair market value is charged if your title is transferred to a foreign entity. If this is purchased with an entity that is not deemed a foreign buyer, then it is only 20% of the proportionate share. This applies to foreign buyer purchases in the following regions:
The additional property transfer tax doesn’t apply to properties located on Tsawwassen First Nation lands.
Make a list of your needs vs. your wants.
Everything you want may not be realistic within your budget, so it’s important to prioritize exactly what you need. Everything else included after your needs will just be a bonus!
Bring your list with you when you go to check out homes. It can be difficult not to get caught up in the cosmetic nuances such as quartz countertops and hardwood flooring. You should most definitely enjoy browsing but ultimately, you should really focus your attention on structure, price, and dates.
Once you’ve determined a very concise list of needs and wants, it’s time to go out and search for homes! You’ll have the chance to attend open houses.
Not every home you see online will still be available or have an open house – have your realtor check availability and book private showings.
After checking out some homes you should be able to narrow down exactly what you like and don’t like.
From there, your realtor should perform a comparative market analysis for you to determine the market value of your favourite homes. If they are within your budget, then rank those homes from best to worst and decide which home you would like to write an offer on.
The process of finding the right home can take anywhere from one day to more than a year. Take your time, and know when the right one really comes along and aim for it.
Once you’ve found dream home that you can see yourself living in, the next step is to write an offer with a Contract of Purchase and Sale.
Your realtor will be the one that can make recommendations on what to include in the offer to keep you safe and protected, as well as help to estimate market value to ensure that you don’t overpay for the home.
In a hot market, they may be an exact date when the seller is reviewing offers, and in this case you may be encountering a multiple offer scenarios. Alternatively, if the home has been on the market for a long time or the seller has requested it, they may be doing offers on a first come first serve basis.
When writing an offer you’ll need to decide on a few things:
Subjects that you will typically see in a real estate offer are:
The above subjects will ensure that the buyer is able to perform due diligence on the property with regards to the most important matters of purchasing a home.
Once you’ve submitted your offer, the seller can respond one of three ways:
If the seller counters the offer then they will be crossing out some of your terms, dates, or negotiating the price.
Once the seller changes your offer in any way, it becomes a new offer by the seller known as a “counteroffer.”
At the time of receiving the counter offer, you now have the decision to accept, reject, or counter again. The counteroffer cancels the previous offer, so keep in mind that every change that is made takes the previous offer off of the table. (void)
It is very common for negotiations to last 3-4 counters, and you will have to be aware of the expiry time of the offer as all negotiations and an acceptance (if any) must be completed by that time.
Subject removal is there for the buyer to perform due diligence on the property as well as ensure that their finances are in order prior to handing in the deposit.
Typical subjects that you will need to perform prior to the subject removal date [usually 7 days long] are financing, inspection, title, property disclosure statement, and strata documents if required.
During the subject removal period you and your realtor are actively operating to perform due diligence on the property with regards to the included subjects. This may include tasks like the following:
If you are satisfied with all of your subjects before the subject removal date, then you will proceed and provide the deposit. If you are not satisfied with the results of the subjects that you have the option to collapse the deal and walk away. No harm, no foul.
If you remove subjects, then you will need to provide the deposit to your realtor within 24 hours of subject removal. [unless otherwise agreed to in the contract] Some contracts may require you to submit the deposit upon subject removal.
FAQ: How much should you pay for the deposit in real estate?
The deposit is typically 5% of the purchase price, and is held in trust by the buyer’s agent’s brokerage until completion.
This deposit will form a part of your down payment on the home. Once you remove subjects and provide the deposit, the deal is now considered “firm” and all you have to do is wait until you move in!
Anyone buying or selling a home needs a notary or lawyer to represent them in their real estate transaction.
If you are buying and selling, it is best to keep the same notary or lawyer for both transactions.
They will be the ones to draft up a statement of adjustments for you, in which you will know how much money is due upon completion and what the exact closing costs are to complete. In the case that something goes wrong, they will be your representation to ensure things are smoothed out.
Prior to closing, your realtor will instruct their conveyancing team to send your notary or lawyer all of the documents that they need to start your file and work towards completion.
Your lawyer or notary should have already calculated how much money you will need to bring in a week or two prior to closing in order to complete the transaction. You will be instructed to bring them a bank draft or certified cheque to cover the balance of any funds necessary to close, along with proper government issued ID.
The completion process requires a fair amount of paperwork to go through, and you will need to sign off on documents required in order to complete the transfer.
Depending on which lender you use, you may also have to visit the branch to review important mortgage details like preferred payment dates and ensure that they have all of the documents that they need before closing.
Your possession day will have been stipulated in your contract of purchase and sale, along with the time that you should receive the keys.
Make sure that your realtor reviews this with you and tells you exactly when you are able to move in so that you can schedule with your movers accordingly. The sellers should have already cleaned the house, but a secondary clean before you start moving all the furniture in won’t hurt!
Your realtor should pass the keys along to you at the time of possession and double check that they are all working and none are missing as per the contract.
It’s better to be safe than sorry, and it’s important that you change the locks to your new home and obtain new keys from a locksmith upon possession.
We got you. Here is a list of what you can do to reduce your costs during your purchasing journey
A great real estate team (realtor & mortgage broker) should make you aware of the exemptions that you may qualify for when purchasing.
There are specific programs tailored to first time home buyers, but also additional options for new home buyers that are using their home purchase as their primary residence. Some options that you should be aware of that may apply to you as a home buyer in Vancouver are:
First time home buyer property transfer tax exemption
Knowing these exemption limits is EXTREMELY important as a first time home buyer. A full property transfer tax exemption for a first time buyer is worth up to $8000, and if that’s a deciding factor for staying within the $500K purchase price mark then it is important that you know about it BEFORE you start your home search.
You may also find these following options applicable to your case. Take a look
This grant reduces property taxes for home owners with an assessed or partitioned value up to $1.525 million. The grant is reduced by $5 for each $1,000 above the threshold and eliminated at $1.639 million (basic grant) and $1.859 million (additional grant). The basic grant:
CMHC First-time Home Buyers’ Incentive
CMHC offers qualifying first-time home buyers with household incomes less than $120,000 a year and a five per cent down payment a 10 per cent shared equity mortgage for a newly constructed home or a five per cent shared equity mortgage for an existing home. The buyer repays the incentive later or at re-sale. The incentive reduces the amount of monthly mortgage payments.
BC Hydro and FortisBC offer home owners rebates for upgrades and improvements, including insulation, space and water heating systems, and ventilation to reduce your energy bill. They also include a bonus offer for completing three or more upgrades. Total value of available rebates: up to $10,000.
Thinking of buying a home in Vancouver? Ask your local real estate experts, we’re ready to guide you from point A to point Z of the real estate process! Give us a call at or email us to start a conversation.