BuyingProcess Overview

 

12 STEPS TO BUYING A HOME

 

 

ARE YOU READY TO BUY?

HOW MUCH CAN YOU AFFORD?

WHERE DO YOU WANT TO BUY?

FIND A REALTOR WHO IS RIGHT FOR YOU

START “SHOPPING”!

LIST AND SELL YOUR CURRENT HOME

CHOOSE A LAWYER

MAKE AN OFFER

GET YOUR FINANCING DETAILS IN PLACE

HOME INSPECTIONS

ITS A DEAL!

MOVE IN DAY!!

 

1. ARE YOU READY TO BUY?!

  • HERE ARE SOME OF THE GREAT BENEFITS TO BUYING: 
  • WHY RENT WHEN YOU CAN OWN?:  The compounding effect of rent can work for you or against you.  Why pay off someone else’s mortgage when you can pay off your own.  Home ownership helps you get out of the renter’s rut, and a place of true wealth - ownership.
  • PRIDE OF OWNERSHIP: When you own, you have the freedom to renovate and decorate as you please.  Your home is a place where you can be uniquely YOU!  Your style, your personality, your priorities can all be expressed to the fullest!
  • YOUR OWN SENSE OF HOME, HAVEN, IDENTITY AND FAMILY:   Home can strengthen ties to your family and members of your community. More than basic shelter, your home is the place where you connect with those you love and where you provide a haven from the stresses and busyness of everyday life. 
  • NEST EGG: Homeownership is the single largest source of savings for Canadian households.
  • EQUITY BUILDER: Your mortgage payments will build equity as you pay down your principal amount owing (as opposed to renting, where your money goes to the building owner’s equity).  Every month a little more is paid down, and with today’s interest rates, it doesn’t take long. 
  • APPRECIATION OVER TIME: Unlike other investments that can be volatile, when you buy a home the increase in its value is relatively steady. When you look at the 10 year average of home prices, the average home value increase has been consistent and positive for the past 50 years!
  • INVESTMENT:  The return on investment for a house can be substantial. In 2004, the average house price in Canada rose by 9% in just one year. It also experienced a 27% increase over four years.
  • CREDIT:  Homeowners can use the equity in their homes as security for other loans.
  • COUNT THE COSTS:
  • Mortgage payments are legal obligations and require a commitment to pay.  While doable, it is something to be looked at with a sober heart and a commitment to budget yourself and make payments. 
  • COST OF UPKEEP AND CARE:  You are not at your Dad’s house anymore, it is your responsibility to upgrade, paint, repair, maintain your home.  These are real costs and require prudent stewardship.
  • COSTS TO ENTER THE MARKET: You will need a DOWNPAYMENT and be able to address some of the Closing Costs .... generally a minimum of 10% of the purchase price, 20% if you are an investor and already own a primary residence.  There are a number of options for getting a downpayment.  Shawn can help you in creative options, and connect you with a mortgage broker to ascertain your financial readiness for purchasing.  This is good to do, before you start looking, so you can set realistic expectations, timelines and strategies to your buying journey. 
  • KNOWING WHEN TO ENTER THE MARKET: Is now a good time to buy? Here’s the hottest market tip you’ll ever get:  Markets go up, markets go down and even the smartest experts can’t accurately predict when a market will peak or bottom out. Buying as a long term investment will protect you from short term market changes Pick a home that meets the needs of you and your family. Then you’ll enjoy living in your investment as it grows in value

2.   HOW MUCH CAN YOU AFFORD?

  • A home is most likely the biggest purchase you will ever make, and the largest asset you will own. 
  •  

Cost of Buying a Home =               One Time Costs             +       Monthly Costs

                                                            Down Payment                        Mortgage Payments

                                                            Legal Fees                               Utilities

                                                            Inspection Costs                      Maintenance

                                                            Purchase Taxes                       Insurance

                                                                                                                 Property Taxes

 

  • At this point, it is helpful to enlist the services of a Mortgage Broker (someone who works with many banks and lending companies to find you the best rates for your individual situation) or a representative from your Bank. 
  • Generally, the rule of thumb is that your monthly housing costs should be no more than 32% of your gross monthly family income.  This is called your Gross Debt Service Ratio (GDSR).  Total Debt service Ratio (TDSR) is generally allowed to max at about 40%, that is 40% of your annual gross income is allowed to serve your total debt payments. 
  • You might find our MORTGAGE CALCULATOR to be a quick tool to estimate what monthly payments may be on a particular home. 

3.   WHAT DO YOU WANT TO BUY?

  • Do you want to live in the city, close to everything? Or do you want to live in a rural area-  where you have space to roam?  What area amenities do you want to have close by, schools, shopping, parks and recreation, etc..  What type of neighborhood do you want to live ion, are you buying for family, investment, development potential, proximity to work or play, etc.?  Write down the top 5 aspects of a property you are looking for, then set up a meeting with Shawn , and as a knowledgeable Kelowna Realtor, he will help you nail down the specific type of property you are looking for. 
  • WHERE?   Kelowna is not simply the right side and left side, but due to its unique topography and extensive agricultural land, it has an extensive and diverse number of neighborhoods, areas, and niche subdivisions, both close in and far out, each with their own flavor, style, feel, quality, and features.  

 

  • WHAT TYPE OF HOME? 
    • A Single Family Home stands alone, and is not attached to it’s neighbor.  There are several styles ... Rancher, 2 Storey, BiLevel, Split Level, Grade Level Entry, Walk out Basement, etc.  Kelowna has much to choose from!
    • Duplex:  A Building zoned for two families and containing 2 living units.
    • Townhouse:  This is more of a community living, where there are Strata Fees which cover common property maintenance such as lawn mowing, landscaping or snow removal.  Townhomes can be attached on either side to their neighbor, sharing a common wall, semi- detached (one shared wall) or detached.  They have an outside entrance.
    •  Condo:  You own your own unit (or apartment) and share common areas such as hallway, plumbing, electrical systems and elevators.  There can even be recreational perks such as a gym or pool.  These will have a strata fee as well. 
    • Bare Land Strata:  This is a development where you own the home and land, but the roadways are common property and “owned in common” with the other owners in the subdivision.  There is usually a strata fee which covers your proportional cost of road maintenance, street lighting, amenities, snow removal, etc..
    • New or “Previously Loved?”:  There are pro’s and con’s of both new homes, or buying a previously lived in home. 
    • Mobile/Manufactured Homes:  These can be either on land you own, or in a mobile home park, where you pay a pad rent.  We have over 30 parks in Kelowna.
    • Personal Home or Investment Home
    • Define your Needs and Wants:  This will be helpful for both you and your realtor as you begin looking through the vast number of potential possibilities!  See our Buyer Needs and Wants List

4.   FIND A REALTOR WHO IS RIGHT FOR YOU

  • You need to feel comfortable with your REALTOR-  know who he or she is, what they can offer you, and know that you can trust them to have your best interests at heart.  In Canada, REALTORS are licensed members of their local board (here in Kelowna that is called the Okanagan Main Line Real Estate Board - OMREB), the British Columbia Real Estate Association (BCREA), and the Canadian Real Estate Association (CREA).  This system of membership and regulation ensures a high level of competency, regular training and education, and adherence to strict legal standards.  As well, Licensed Realtors are the only ones who have the ability to use and access the Multiple Listing System (MLS).  Feel free to interview Shawn, and a few Realtors!  You will be spending alot of time together!

5.   START “SHOPPING”!

  • SETTING UP A SEARCH:  We like to get you started with a PERSONALIZED PROPERTY SEARCH.  We will ask you questions to help us understand who you are, what your needs and wants are, and will set up an automated computer search that will send you regular emails of the new homes that become available within your search parameters.  This is helpful in two ways-  first it allows you to become familiar with our local market-  what costs what ... And secondly, you will be able to stay very current with what is available.  You will receive email notifications of new properties up to 24 hours before they become available to the general public on www.REALTOR.ca   These listings will contain all the important information you require about a home, as well as pictures and maps!  Shopping via the internet is a great way to start. 
  • UNLISTED HOMES AND FSBO’S  With Royal LePage being the largest office in Kelowna, many properties are sold within our office which do not even show up on MLS, and are sold within the company.  Shawn’s extensive connections will help you find the right home, listed or not.  Shawn has also knocked on many doors, and sold many for sale by owners (FSBO’s) representing only the Buyer and obtaining the best deal possible.  Let Shawn’s knowledge of the market and expertise help you not pay too much, and properly protect and promote your interests in buying!
  • DEVELOPMENTS:  Most Developers have an inside arrangement for Realtor’s to be able to refer or to represent Buyers, at no cost to the Buyer.  Ask Shawn for the right procedure for this, and he will help you through the process.  This helps keep smooth communication lines with the developers, you and your Realtor.  Development contracts can be very tricky and can sometimes favor the Developer’s interests, not yours, so be sure to have Shawn work for you, before you register at a development or on their website.
  • When you are ready to start looking at properties ... We will make appointments and begin the exciting process of House Hunting! 

6.   LIST AND SELL YOUR CURRENT HOME

 

When should you sell?  This is a Great question!  Before you get too serious about buying a property, if you need to sell your home in order to buy, you should have a market analysis done so you can see what money you will hav to buy another home.  Call Shawn and he will be happy to do a No obligation market analysis of your home. 

 

  • Buyer’s vs. Seller’s market:
    • When there are lots of people looking for homes but not many for sale, it’s called a ‘seller’s market’.  When there are lots of homes for sale and not many people buying them, it’s called a ‘buyer’s market’.
    • Talk to Shawn about where the present flow of the market is in order to best know what to expect, and wether negotiation is favoring the buyer or the seller at this time.
    • Waiting for the market to improve?
    • The axiom, Buy Low, Sell High, is a great axiom.  When you have an investment home (you don’t live there), this is a good axiom.  More difficult when you have one home and you live in it,  you don’t want to pay rent, and you want to move. 
    • The good thing is, if you’re selling one home and buying another, you don’t really have to worry about playing the market. If you sell your existing home for a ‘low’ price, you’re probably also buying at a low price.  It is all relative, and you have to live somewhere. 

 

Seasonality: Do home sales get frostbite?

  • It’s true. Winter sales tend to be slower, and spring sales are more brisk.
  • you need to sell fast ask your REALTOR® for help establishing a price and for making your home look attractive, without making you look desperate.

 

Buy or Sell First?

Great question!  Often we are able to time your sale and purchase so that they happen on the same “closing date”.  As a buyer, you can make an offer on a home “subject to the sale of your existing home”.  This can work, although may not be as attractive to the seller.  In other situations, you may want to check with your bank about obtaining “Bridge Financing”.  This means your bank will lend you the amount that would be required to carry two homes in the time between buying your new home and selling your previous home. 

 

 “For Sale by Owner”? Or use a Realtor? 

Just like many of us entrust choose to use an expert when it comes to dental work, or heart surgery, or even car maintenance, Realtors are trained professionals who know their job, and love what they do.Real estate transactions are complex, time consuming and involve a lot of legal documentation. Your REALTOR® is highly motivated and should have the experience, knowledge and advice that can help to get you the most for your home.  As well, Realtors have access to the MLS system, which will give your home exposure to the largest number of buyers in the shortest amount of time.  The more buyers and realtors that are aware of your home and its features, the quicker it will sell!  Saying all that, if you choose to sell your home privately ... Please talk to use about getting a “for Sale By Owner” package. 

7.   CHOOSE A LAWYER

 

            You will need a lawyer to prepare the final closing documents for registration in the Land Titles Office in Kamloops, and for preparing mortgage documents, etc..  You may already know a lawyer or notary, and if not, we would be happy to refer several to you that we have worked with.

8.   MAKE AN OFFER

 

            Congratulations!  You’ve found a home that has potential!  Here are the next important steps:

 

  • Preparing the offer
  • We will prepare the offer with you an customize it to suit your time frame and desires for price, and protect your interests as a Buyer.  This is not like buying a box of apples, there is a huge amount of money at stake, these are legally binding contracts, and contract law is extensive and can work for you or against you.  As an experienced and successful REALTOR and negotiator, Shawn will help you by putting a legally binding contract with the appropriate clauses, terms, and conditions, which will serve your interests, while at the same time be well written to ensure the best dealing, cooperation, understanding and negotiation with the Seller  to obtain the best price and terms for you.  Here are some terms you’ll see in the offer.

Buyer or Purchaser: That’s you.

 

Seller or Vendor: The present owners.

 

Purchase PriceThe most important number. Let’s hope the seller goes for it!

 

Deposit: A cheque you write to the seller’s broker, who deposits in a trust account. This is your way saying ‘my offer is serious’. The size of the deposit is up to you, you can ask us what would be reasonable in your particular deal. 

 

Inclusions: Be sure you know what is included with the house! The washer and dryer, the microwave, draperies, light fixtures. Don’t leave anything to ‘chance’.

 

Offer open until...: The length of time you give the seller to consider your offer. Usually less than 48 hours.

 

Completion Date: This is when the title is transferred to you at the Land Titles Office.  This happens later in the day, and as your realtor, Shawn will receive notification that the title has transferred. 

 

Possession Date:  This is when you actually get to move into the home!  We will arrange to give you keys ... And you can start moving in!  This day is often a day or two after completion date. 

 

Adjustment Date:  This is date that you start to make payments on things such as insurance and taxes. 

 

“Subject to” Clauses: Every transaction is unique, and you will want to add conditions that are important to you, such as a proper Home Inspection or Title Search ... We will help you will determining what is important in your particular offer. 

 

“Terms and Warranties” : These are statements the Seller and or Buyer makes with regard to the state of the property, or actions they are going to undertake, as part of the transaction”.

 

As your REALTOR®, Shawn can help ensure no details are overlooked in your offer!  This is what we do, and what we are trained in!  

 

  • Presenting the Offer
  • You’ve signed on the dotted line and your REALTOR® has provided your offer to the seller’s REALTOR®. It works best to have your Realtor represent you and do the negotiating on your behalf. 
  • Counter Offer
  • The seller wants to alter some part of your offer – most likely the price, or possession date.   The seller will make changes on the contract, initial them, and hand it back to your realtor.  This is when you will negotiate back and forth until you come to terms and a price that are acceptable to both you and the seller. 

 

  • An Accepted Offer!

When everything is agreed upon, and all the signatures and initials are in place, you have an accepted offer!  Now the fun begins ... This is where we work very hard with you to remove all the conditions of the offer, such as financing, home inspection, title search .... Remember, the deal isn’t firm until all of the subjects are removed. 

9.  GET YOUR FINANCING DETAILS IN PLACE

 

This is one of the “Subject To” clauses in your deal.  Now it’s time to go back to your mortgage broker or banker, and get all your mortgage details approved and in place. 

 

10.   INSPECTIONS

 

We suggest that you hire the services of a professional Home Inspector.  They go through the home with a fine toothed comb and look for all the things that we can’t see, or may not be aware of, such as the condition of the roof and furnace or any potential or past problems with water or mold.   It’s best to be fully educated and aware of the state of the home that you are buying.  A home Inspection typically costs about $380-450.  This is a small price to pay for peace of mind on such a large purchase!  Shawn will help coordinate this inspection with you and the Seller, as well as any of the myriad of inspections that may be needed with the relevant professionals- pool, septic, water, zoning, home warranties, etc.. Lean on Shawn’s experience for covering all these details in a timely and efficient manner.  BUYER’S COSTS will give you a more in depth breakdown of these costs  

11.  IT’S A DEAL!

 

Once all the subjects are satisfied, waived or removed, and the deposits are into Royal LePage, then your deal is usually FIRM.  Now you can get your boxes, start packing and plan for your moving day!  We have a MOVING CHECKLIST that will help you remember all the little details.  Shawn will also coordinate with your lawyers for closing.  A day or two before closing, you will meet with your lawyer to sign the closing documents.  He will be able to tell you what you need to finish everything off.  You can now arrange to transfer essential utilities like power and water for your adjustment date.  You will want to call ahead for your phone and cable hookups to be ready.     Happy Packing! 

12.   MOVE IN DAY!! 

 

Confirm with Shawn the exact time on the possession date that you are able to get keys and have your moving truck arrive at your new home. Be sure to leave enough time to move out of and clean your last home.  You’ll want to arrange for some help unloading if you are moving yourself.

 

CONGRATULATIONS! 

YOU’RE IN YOUR NEW HOME! 

SHAWNWORSFOLD

REECEWORSFOLD


shawn@swproperties.ca

250.870.7771

 

Hon B. Sc, Realtor ®

Unlicensed Assistant


swproperties.ca

okanagandreamhomes.ca

Privacy Policy & Disclaimer Statement  | Copyriright 2010 SW Properties | All Rights Reserved | Sails Image by aa440

sw properties sw properties