Buying your first home in Vancouver BC may sound complicated at first, but once you break it down into steps, it is actually quite simple. In this section, we broke down the buying process into 6 main steps. They are:
- Plan ahead
- View properties
- Write an offer
- Remove subjects
- Sign closing documents
- Get procession
1. Plan Ahead
Before you buy, you should make sure you are financially ready to purchase a place. You can do so by obtaining a pre-approval from a bank or any lending institutions of your choice. With that, you will know how much you can borrow and how much you can spend on buying properties.
You should also consider whether you want to use a Realtor or not. A Realtor can guide you through this buying process, and can give you advice based on their expertise and experience. Although the viewing process does not require a Realtor, if you are planning to get a Realtor later anyways, it is better to select one early since they get paid based on the Seller’s commission structure regardless of how much service they give you. Furthermore, you do not have to pay anything until there is a completed transaction, unless agreed otherwise.
2. View Properties
To begin the process, you should first do some research and shopping to know more of what kind of properties you want. If you have a Realtor, you can tell them what your requirements are, and they can use their Realtor tools (Multiple Listing Service or “MLS”) to generate a list of properties that meets your needs. If not, you can visit a property listing site, such as www.realtor.ca, realtylink.org, or www.rew.ca to find your own properties. Browsing yourself gives you more control of what you want to look at. The downside of this is that these systems do not provide sold data and a lot of key filters. Furthermore, the property information shown is not as detailed as what a Realtor can provide you on the MLS.
Once you found a few that you think you would like, either go to their open house, or have the Realtor book an appointment for you. To know the property, nothing beats seeing the property in person!
Once you looked at a few properties, you may want to start narrowing down your searches, such as location, age, size etc., so you can focus on the few properties that you really love.
If you cannot find any that you like right now, don’t feel discouraged. You can wait a day or two to check again as new listings are posted regularly on weekdays. When you find a property you like, you can consider writing an offer. Please be aware that there are legal ramifications when you put down an offer.
3. Write an Offer
This section is probably the most important, and complicated, part of the transaction. But again, once you break it down into small steps, it is actually not difficult to understand.
But before drafting any offers, you should decide if you are planning to use a Realtor or not. If you use a Realtor, they can handle all the legal documents for you during the transaction. If you decide not to use one, which is not a common practice, then you should consider having a lawyer or a notary that can draft the documents for you.
Once you have decided to put in an offer, you are committing to a financial transaction. One of 3 things could happen after offer is reviewed by the Seller:
- Accepts your offer
- Rejects your offer
- Counters your offer with different conditions. In this case, you have the same 3 choices: accept, reject, or counter.
When the offer is accepted by both parties, the offer becomes a legally binding contract, which both party have to abide to. A deposit is usually due either after acceptance, after subjects removal, or both. Although legally a deposit is not necessary in a transaction, it will give the Seller a sense that you are serious in buying the property, thus a higher chance of acceptance.
4. Remove Subjects
Once you have an accepted offer, the first thing the Buyer has to consider is whether to remove the subjects. Subjects are terms and conditions that need to be fulfilled before contract is considered firm. Subjects are there to protect the Buyers by giving them time to evaluate their situation, such as financial, or due diligence. An example of a subject would be a pending mortgage approval, a clear title, an acceptable inspection report of the property, or a satisfactory review of the Property Disclosure Statement and strata documents (for strata properties only).
Once the subjects are completed, they will have to be removed before the subject removal date, which is one of the items contained in the offer, or the contract may become void. However, it is important to know that even if the contract is void, there could be consequences if you decide not to complete the deal. Do not submit an offer if you are not serious about buying.
The removal process is simple. Once the tasks are completed, ie, getting pre-approval for mortgage, or getting a satisfactory inspection report, the buyer can simply tell their Realtor or lawyer/notary to remove the subjects for you. This will involve an addendum (addition to the original contract) that notifies the Seller that the subjects are removed. As long as this is done before the subject removal date, the deal will be firm.
5. Sign Closing Documents
Once you have a binding contract, the Buyer should meet with a mortgage broker as soon as possible , assuming you need a mortgage, to start the mortgage process. This process can take up to a few weeks to complete, so getting this done should be the first priority.
At the same time, the Buyer should seek a lawyer or notary to do their conveyancing as soon as possible. Conveyancing is the process where the title of the property is legally transferred from Seller to the Buyer. They would also take care of all the money transactions from one party to the other. It typically takes a minimum of two weeks to prepare and process a transaction. If they have less than two weeks, some firms could charge a rush fee.
As the Buyer, you do not need to deal with any of the complicated matters. The lawyer or notary will do them for you. You will just need to prepare a bank draft to pay for the outstanding costs and sign some documents near the closing date to finalize the transaction.
6. Get Possession
Once the closing documents are signed, your part is done. On the closing date, the lawyer or notary will transfer the title from the Seller to the Buyer. The only thing left to do is to get the keys from the Seller’s Realtor. Possession date is when the Buyer will get the keys to the property. Once they have the keys, they are free to enter their newly bought property as their own. At this point, you can finally be relieved from all the pressure and relax for a moment before thinking of how you are going to move everything into the new place!
Hopefully, this guide has helped you understand what to expect when buying real estate. Of course, every transaction can be slightly different depending on the scenario. If you have any questions, feel free leave a comment or contact us anytime. Happy home hunting!