So you're thinking of buying your first home in Vancouver! Buying your first property can be an overwhelming experience, filled with excitement, anxiety, and stress. In this guide, I will break down the steps to buying your first home so you have a better understanding of what you're getting yourself into. 

1. How much can I spend? Mortgage pre-approval & finding the right mortgage broker!

Before you start shopping for homes, you need to get your finances in order, this will be a good time to figure out your credit score, and figure out roughly how much you want to put down for a down payment. In Canada, the minimum downpayment is 5% for homes that cost $500,000 or less.

Once you saved enough for a downpayment, it's time to figure out how much you can borrow. You should speak to several mortgage brokers to figure out the estimate of how much you can borrow and to get the best mortgage rate. The mortgage pre-approval is based on the information you provide so make sure to be as detailed as possible. 

2. Finding the right home for you

Now it's time to shop around and find the right home for you. It's important to get the mortgage pre-approval first to figure out the price range of properties you should look at. In this competitive market, it's important to have a clear understanding of what's important in a property for you. Make a list of things you'll need to have in a house. Ask yourself how many bedrooms, bathrooms, and space you desire. If you have a pet or host a lot of parties do you need a big kitchen or no pet restrictions? 

 

Once you made a list of must-haves, you should also think of different neighborhoods, future plans, and critical factors that will influence the appreciation of the value of your future home. These factors will include location, home size, usable space, age/condition, upgrades, the local market, future developments, and amenities. Throughout this home process, your realtor will help narrow your list of desirable properties to make sure you're making a great investment.

3. Making an offer on the home

Now that you've found the home you want, you have to make an offer. Most sellers price their homes a bit high, expecting that there will be some haggling involved. I will provide you with a report of comparable homes in the area and what they have sold for. Once you've made your offer, don't think it's final. The seller may make a counter-offer to which you can also counter-offer. But you don't want to go back and forth too much. Somewhere, you have to meet in the middle. Once you've agreed on a price, you'll make a deposit, which, will be held in a trust account and will form part of your down-payment.

As part of the offer we submit, we will include the necessary buyer subject clauses to make sure we fully understand what we are buying, and as an insurance policy if anything about the property doesn't match your expectations. 

Some of the most common buyer clauses are: 

  • New First Mortgage A
  • Buyer approving property Disclosure Statement
  • Buyer inspection of Property - Buyer Satisfaction
  • Fire/Property Insurance
  • Buyer Satisfaction with Title
  • Subject to Appraisal
  • Subject to Legal Review

4. Closing on your home 

Make sure you get a home inspection before you close. It will be well worth the money spent since it ensures the property's structural soundness and good condition.

Setting the closing date that is convenient to both parties may be tricky, but can certainly be done. Remember that you may have to wait until your rental agreement runs out and the seller may have to wait until they close on their new house.

Be sure you talk to your mortgage banker to understand all the costs that will be involved with the closing so there are no surprises. Closing costs will likely include (but are not limited to) your down payment, title fees, appraisal fees,  and attorney fees, inspection fees. 

5. Closing Costs 

Finally, once the completion date arrives we need to settle all the closing costs before we close the transaction and transfer the title from the seller to you the buyer. Some of the most common closing costs include: 

  • Property Transfer Tax: 1% of the fair market value up to $200,000, 2% of the fair market value greater than $200,000-$2,000,000.
  • Goods and Services Tax (only for new homes)
  • Property Tax: If the current owners have already paid the fulls year's taxes, you will have to reimburse them for your share of the year's taxes.
  • Appraisal Fee
  • Mortgage Applications Fee
  • Mortgage Default Insurance
  • Fire & Liability Insurance
  • Legal Fees