Buying a home can be a very stressful experience as it, for most people, represents not only their home but also their single biggest financial commitment. Despite this, many people feel that buying a home is similar to buying a piece of furniture (where what you see is what you get). In my experience with thousands of real estate transactions, there is no other industry where the assistance of the qualified professionals is more vital than in the purchase of your home.
In an “ideal situation” a purchase of a home in British Columbia proceeds as follows:
- Figure out what you can afford – Before discussing a home purchase with anyone else, it is best to talk with your bank or mortgage broker to get “pre-approved”. This will give you an idea of what you can afford and what your potential payments will be. Mortgage Brokers tend to work with many lenders, whereas your Bank’s or Credit Union loan officer often have an interest in keeping a long term customer happy. In short, shop around, a mortgage is your largest financial commitment and should be considered before anything else. First Time Home Buyers should investigate the incentives that are available to help them purchase a new home.
- Get to know the area – Location, Location, Location, having a home in a location that works with your lifestyle is the single biggest consideration. Distance to work, school, shopping, and leisure activities should all be considered. Walkscore.com provides a great way of comparing the “walk-ability” of neighbourhood. Buyers of Waterfront Property need to understand the unique access and dock license requirements for their area.
- Find a REALTOR - A Realtor will be in a much better position to do his or her job for you if you have already scouted the area where you would like to live and have a good idea of what you can afford. A Realtor may ask you to sign a “Buyers Agency” contract. The best Realtor for you is often someone who: a) understands your needs, b) can strongly negotiate for you, and c) is very familiar with the area you are interested in. Don’t be afraid to interview a couple of candidates prior to going out to look at homes.
- Find a Home and Negotiate a Contract of Purchase and Sale - Most residential real estate deals in British Columbia are written on the standard form contract that has been approved by the Real Estate Council and the BC branch of the Canadian Bar Association. Two of the most critical decisions are: a) picking good dates for closing; and b) careful drafting of additional terms and subject conditions.
- Examination of Subject Terms – Most real estate contract will allow Buyers time to investigate the characteristics of the property. At a minimum these should include: a) title review by lawyer, b) home inspection, c) financing approval, d) strata documents review (if a strata). This is the best time to contact your lawyer, inform him of the closing date, and discuss the terms of the contract with him.
- Consider any Special Circumstances – Are you a First Time Home Buyer? Are you Buying Waterfront Property? Are you buying Farm Property? Make sure that your contact allows you to do the due diligence you need to find out about obligations associated with the property you are considering.
- Subject Removal – Once a Buyer is fully satisfied with the contract terms, she will remove the subject conditions. The Buyer should only remove subject conditions if she is confident that she has both the desire and ability to see the contract through to completion. Should a Buyer fail to complete a contract on the Closing Date following subject removal, the Seller could seek legal and equitable remedies (including damages and specific performance) against the Buyer.
- Talk with Your Law Firm- to discuss how you wish to hold title to the property either as joint tenancy or tenants in common.
- Prepare to Move – these are those tasks which everyone associates with moving: calling the movers, changing the address, and calling the utility providers.
- Closing Date - just prior to your closing date your lawyer will call you to inform you of your balance to complete, which represents the amount of money in the form of a bank draft which you will be required to bring into the lawyers office. At the lawyers office you will sign the closing documentation, including the mortgage documents required by the bank. The lawyer will proceed to collect the Seller’s documents, obtain a home insurance binder, order title insurance, order strata forms, and requisition funds from your bank. Once all requirements have been meet (and all third parties are satisfied), closing proceeds by electronic registration in the BC Land Title Office. At our firm, both you and your Realtor will receive a call on closing confirming that the transaction has completed. (What happens if something goes wrong?).
- Moving Date – Although all the heavy lifting by your professionals has been completed by this point, this is the day you have been looking forward to, moving into your new home.