Vancouver First Time Home Buyer tips

If you are a first time home buyer looking to enter the market in Vancouver, BC (British Columbia, Canada), it could be an overwhelming task physically and mentally. Here are a few tips which could ease you through the whole process.

Identifying your neighborhood:

Based on your budget, identify the potential neighborhood you would like to buy first. This step is very important even before you select your realtor. If you are wondering why you need a realtor, check below.

All the MLS listings details (including open house timings, seller realtor details) could be found online at realtor.ca. One could also go with region specific MLS listing websites like estateblock, rew, remax, zolo.

If you have hard time narrowing down the potential neighborhood to buy, try estateblock first. They give you an option to set your own filters against multiple neighborhoods at the same time – which could be very effective to identify the neighborhood that matches your filters. For instance, if your priority is to identify neighborhoods with best elementary and secondary schools, we could easily do so across Greater Vancouver.

If you are interested in buying new construction properties, buzzbuzzhome will be a good start. For new properties you may think there is no need for realtors to be involved. However if you had identified a realtor who pays a portion of his commission to you, then it’s in your best interest that you approach the builder with your realtor. In this case, builder pays your realtor the buyer agent’s commission if you have one. If you don’t, builder simply keeps it with himself.

Also remember, there is a GST on a new property which is 5% of the property price. New home buyers can apply for a rebate of the 5% GST if the purchase price is $350,000 or less. The rebate is equal to 36% of the GST to a maximum rebate of $6,300. There is a proportional GST rebate for new homes costing between $350,000 and $450,000. There is no rebate for homes priced at $450,000 and above.

Why you need a realtor:

The Canadian Real Estate Association (CREA) is a trade association that represents real estate brokers, agents and salespeople in Canada.

CREA’s members are known as "realtors", which means they are members of their provincial real estate association or members of both their local real estate board and CREA, depending on the province.

Both the Multiple Listing Service or MLS trademark and the Realtor trademark are owned by Realtor Canada Inc, a subsidiary of CREA. Local real estate Boards or Associations operate a local database under a licensing agreement with the national association. CREA also operates the realtor.ca (previously mls.ca) web site.

For example, rew is a popular website in Lower mainland – where you will find both MLS listings and new developments for sale. Their MLS listing search covers the real estate boards of Greater Vancouver, the Fraser Valley and few other places.

Property owners who do not want to fully engage the services of a Realtor, can hire one to only list their property on the MLS system. In these instances, the property owner is responsible for ensuring the listing information is accurate and agrees to handle all other details of the transaction directly. The seller may have to pay a commission to the buyer's real estate agent, if the buyer uses one.

Identifying your realtor:

One of the biggest expense in buying a home is realtor fees. As a buyer, it may seem like you are not directly paying for the realtor fees, since your buyer’s realtor does not charge you anything directly. However in a seller’s market, a seller would have already factored in the realtor’s fee in the listing price itself. So as a buyer, it’s you who pay the realtor fee. So spend some time to identify the realtor who pays you back more of his commission.

There are few realtors who represent buyers that pays cashback up to 50% of their commission to the buyer, like oneflatfee.

If you had already decided on the property you want to buy, you could use their services as buyer’s agent and they will refund 50% of the buyer’s commission. Usually a buyer agent’s commission will be in the range of 2.5 – 3% of the property’s sale price.

Even in the case of you wanting their services as like regular agents to show all listings that are available in a particular neighborhood, they will give you 25% cashback of the buyer’s commission.

Identify assessment value of the property:

One could easily check the BC government assessed value on a particular property at any time online using evaluebc.

Also speak with your realtor to identify the last sold property price for a similar property. Usually both of these data, should give you a picture of how much you may need to offer in a particular area.

Making an offer for a property:

Before you make an offer on a property, you will need to understand the different costs involved with property ownership. 

  

For getting the best deal in a mortgage, usually a mortgage broker is the best route. One could check for best possible rates at ratehub, ratespy, intellimortgage, truenorth.

It’s always good to speak with these mortgage brokers and getting a pre-approval on your mortgage. This helps in arriving at the maximum offer price you could on a property.

If you plan to put 20% down payment of your property value, then mortgage insurance is not mandatory – else it is mandatory.

One could also check the ultimate mortgage checklist: 63 steps to negotiating the best deal

Few BC government cost saving programs:

Here you could find few cost saving programs for new property owners (few applies to all provinces, few apply only to BC). 

To conclude, though it looks very overwhelming and time-consuming to buy a property, it’s really worth spending your time before you make a decision on your life’s single biggest investment. Good luck!