Home BUyer's Guide

Home Purchase Expenses
There are many costs that home buyers incur, especially upon purchasing your first home. Some of the expenses related to buying a home are one-time costs, while others are continuing costs.
Your largest outlay is the down payment. As a first time buyer, this would likely represent only 5 - 10% of the purchase price. Be prepared to pay for additional costs, such as:

  1. Legal Fees & Disbursements
  2. GST and PST (if applicable)
  3. Land Property Transfer Tax (unless you are a First Time Home Buyer)
  4. Property taxes and adjustments (pro-rated and reimbursed to the Seller)
  5. Interest on interim financing (if applicable)
  6. Utility Payments such as Garbage and Water (pro-rated and reimbursed to the Seller)
  7. Strata or Condominium Fees
  8. Survey Fee (if applicable or important)
  9. Home Inspection Fee
  10. Septic Inspection Fee
  11. Water quality and quantity certificate
  12. WETT Certificate for wood burning fireplaces (if applicable)
  13. Appraisal Fee
  14. Mortgage broker's fee (if applicable)
  15. Mortgage Loan Insurance Premium - CMHC (if less than 20% down)
  16. Mortgage Loan Insurance Application Fee - CMHC (if less than 20% down)
  17. Moving Expenses
  18. Renovations and repairs
  19. Furniture, paint, carpeting, window coverings, etc.
  20. Service and Utility Hook-up Fees
  21. Property/Condominium Insurance
  22. Mortgage Application Fee
  23. Mortgage Registration Fee

Additionally, once you have purchased your home, you will incur regular expenses on a monthly, quarterly or yearly basis. Some of these costs include:

  1. Mortgage Payment
  2. Water, Sewer and/or Garbage Payments Annually. Sunshine Coast Regional District - SCRD - bills for water for the entire Sunshine Coast. 
  3. Electricity and Gas Services or other utilities such as propane, etc
  4. Cable, Telephone and Internet Services
  5. Property Taxes annually - sometimes your Mortgage provider will require that this is added to your mortgage payment and will submit on your behalf
  6. Strata or Condo Fees
  7. Repair/Maintenance Expenses
  8. Homeowner's Insurance

How to Make an Offer
When we have found a home you are interested in buying on the Sunshine Coast, I will walk you through the process of drafting an offer to purchase and will communicate the offer to the seller or the seller's real estate agent for you. Some properties are in demand and you will not be the only interested party making an offer. You can trust me as your real estate agent to assist you in generating an offer that is reasonable and protects your interests using specified terms and conditions.

An offer can be drafted with or without conditions; an offer without conditions is known as a firm offer and one with conditions is known as a conditional offer. A conditional offer represents the party with the placement of certain conditions on the purchase. Some of these conditions could be "subject to financing approval", "subject to the strata council approving pets", "subject to the buyer's house selling", "subject to an approved home inspection", among many others.

The seller may accept your initial offer, reject your offer or present a counter-offer. The counter-offer may differ from your original offer in respect to price, conditions, the closing date or any other items. Offers can be countered back and forth between the parties until one of you accepts or rejects, ending the negotiations.

There are many components of an offer that you should be aware of and understand. As a trusted realtor on the Sunshine Coast, I will answer your questions and explain the entire process to you so that you are comfortable with the steps involved.

An offer includes certain "terms", which specify the total price offered and how the financing will be arranged, such as if you will arrange your own with a financial institution or mortgage broker or if you wish to take over the seller's mortgage (assumability) which is rare.

Inclusions and Exclusions
These are specifications within the offer that detail the items to be included or excluded from the purchase of the property. Typical inclusions are appliances, window coverings, fixtures and decorative pieces.

A deposit is provided from the buyer to the seller as a token of the buyer's assurance and intention to buy the property involved. The deposit is applied against the purchase price of the home once the sale has closed. Generally deposits are 5% of the offer price and paid upon a firm offer however, if necessary I can assist you in proposing a certain and appropriate amount and timeline for the deposit depending on the circumstances of the situation and offer.  The deposit is generally paid by bank draft to the buyer's brokerage trust account as a stakeholder, meaning not on behalf of one of the parties but for the transaction itself. 

Items that are usually put in place to protect a party's interests upon selling or buying the property and refer to things that must occur or be in place before the sale closes.

Closing Date
This is usually the date that the legal ownership of the property transfers from the seller to the buyer and, unless otherwise noted, when the funds for the purchase are concluded.

Possession Date
When the buyer takes possession as specified in contract of purchase sale.

Purchase Price
This is the amount that the buyer is offering to pay for the property. The price is usually dependent on market conditions and may differ from the seller's current asking price.

Legal Needs
Purchasing a home involves a lot of paperwork, most of which are contractual documents that will legally bind you to the numerous terms and conditions. For this reason it is important to have a good lawyer or notary public acting for you. Someone to protect your rights and interests.

Finding a Lawyer/Notary Public
If you don't have a lawyer or notary public, you can look for a referral from friends, family or business acquaintances. Look for someone with real estate experience and discuss their fee scales. I can also help you locate a local reliable professional whom you feel comfortable working with.

Lawyer's/Notary Public's Function
You will need a lawyer or notary public to process your purchase and ensure the terms are met:

  1. the correct property is purchased
  2. transfer title to your name
  3. ensure title is free and clear of prior owners encumbrances
  4. your mortgage is registered properly on title

The legal process can vary, you will need to consult with your chosen legal professional and he/she will explain the process and the steps that need to be completed before you get the keys to your new home.
Your lawyer/notary public will prepare a "Statement of Adjustments" outlining all the financial aspects of your sale.

Home Inspection
A home inspection is an objective visual examination of a home's structure and systems.

Why get a home inspection?
There are a number of reasons why REALTORS recommend a home inspection including:

  1. To ensure you are not surprised by major defects
  2. So you can be advised about the various elements of the home including - heating and cooling systems, structure, electrical and plumbing
  3. To learn about how the mechanical systems work and need to be maintained
  4. Most homeowners are not expert in the numerous components of house construction
  5. A third party can be objective as there is no emotional attachment
  6. Re-negotiate price if anything major and/or expensive needs replacing or fixing that may affect the properties value or use

Who should you hire?
Home inspectors on the Sunshine Coast are often referred by family or friends. I can also provide you with a list of inspectors. Look for one that is trained and certified by a national organization such as Canadian Association of Home Inspectors (CAHI) or National Institute of Building Inspectors (NIBI) and who has errors and omissions insurance. Do not hire someone who will do any suggested work due to the conflict of interest.

When should you call?
Order the inspection after your offer has been accepted. The contact will stipulate the length of time you have to complete the inspection and remove your conditions/subjects. 

What is involved?
The home inspection will determine the structural and mechanical soundness of the home. Your home inspector can identify existing and potential problem areas, suggest possible solutions and provide estimates for the cost of the work required. You will receive a report outlining the inspection findings. You should accompany the home inspector towards the end and arrange to meet them at the home so they can walk you through the report. If as a result of the inspection, you have further concerns, have a specialist in that area conduct a more extensive examination.

What does it cost?
Costs vary depending on a number of factors including:

  1. Size and location of the home
  2. Features
  3. Age
  4. Services required
An approximate cost for a building inspection on the Sunshine Coast for an average 3 bedroom, 2 bath home I would budget around $500.00+.

Mortgage Information
Mortgage lending is a highly competitive field. Information on mortgage rates, which can change daily, is available in local newspapers, through mortgage brokers, from individual lenders and of course through conventional financial institutions. When you are shopping for a loan, interest rates tell just part of the story. You will also need to study the various fees lenders charge and many mortgages today are almost custom-tailored to individual needs with many options available. I recommend shopping rates and/or working with a mortgage broker that will shop the rates for you and help you along the way past the purchase of your home. 

Ask your Agent
As your professional RE/MAX real estate agent on the Sunshine Coast, I can recommend lenders to check with prior to beginning any serious house hunting so you will know exactly what you can afford. This will avoid any disappointments when you find that perfect home and are unable to purchase due to financing.