The Basics on Buying Real Estate in B.C.
Being someone whose profession keeps them continually immersed in the world of real estate, it’s sometimes easy for me to forget that it’s a world shrouded in esoteric mystery. No, not “The Lord of the Rings” kind of esoteric mystery or even the “Jedi Knight” kind, (though that would be kinda cool…) but rather the sort that tends to make people who don’t do it for a living feel exposed if not vulnerable when they consider entering it. Which is of course why there are so many Realtors in the world. Despite what those “sell it yourself” websites and systems tell you, the fact that Realtors are still here in large numbers tells you that it’s not something that’s as easy as they claim. This post is for anyone who is thinking of buying real estate in B.C. If you’re from abroad, then there is more to this, so to start, I recommend reading this post
and the others in the series.
Now, buying real estate doesn’t have to be intimidating. I’m going to outline the process for you so that you’ll have an idea of what to expect when you choose me as your Realtor. (Ok, that was a little tongue in cheek, but you can’t blame a guy for trying.) There are simply too many variables and possibilities for me to do this comprehensively, and too much info for me to write in a readable fashion. Keep in mind that this is intended as an outline, much like the table of contents of a book or an article in wikipedia. Plus as they say in commercials “actual experience may vary” which roughly translated in this case means “it doesn’t always go this way, but this is a typical experience”.
So here it is, the basic stages of buying a property in B.C.
1. Talk to a mortgage broker and get pre-approved.
I say this to people so much, and for good reason. It really should be the first thing you do. Going to talk to a mortgage broker and finding out how much you can borrow before looking at houses makes a lot of sense. I always explain this to my clients as “it makes sense to look in your wallet before you go shopping”. Then, you’ll want to decide how much you want budget on payments per month. A mortgage calculator is handy as a guideline for this. I do recommend going to a mortgage broker rather than a bank, as they tend to give better, more customized packages than banks and more quickly too. One of the reasons for this that mortgage brokers don’t get a regular paycheck, they only get paid for the deals they put together. And it doesn’t cost you anything to use their services, in essence they get paid by the lenders even though they’re working for you. Ask them for more info on this if you’re curious.
2. Come speak to a Realtor.
Now that you have an idea of what you’re able to afford, it’s time to find out what’s out there. I can’t speak for other Realtors, but here’s basically how I usually do things. I’ll sit with you and listen to what your wants and needs are. Then, I’ll start to introduce you to the possibilities of what is out there and throw various ideas at you to help you explore your options. Depending on where you’re moving from, you may be be expecting more for your money or you may feel like you’ve suddenly become rich. I’ll try to find out what is most important to you and combined with various factors, I’ll help you find properties that are the best fit. There’s no point in me finding you a home you’re not happy with, that’s a no win situation for all of us. I want you to get the best place possible for what you’re looking for.
This is the beginning of a process that requires continual communication between us. So stay in touch! This communication is important for a variety of factors that I won’t go into here, but one that I will mention is that things can and often do happen fast and I will need to be able to reach you quickly and easily. As you look at places, you will hone your expectations and tastes. I’ll need to know how these things are changing. My knowing how you feel and your listening to what I know will make this and every part of the process easier on all of us.
Once I know what you need and want I’ll give/send/show you a list of properties that you choose from that you’d like to view. This is a list which will change as some places sell and new ones come out, and prices on a couple of them change. I may also have some suggestions based on what I think you will like. Regardless, I’ll tell you not to put too much emphasis on the photos and comments in the listings. They are a form of ad after all. It’s when you go look at them that you find out what things are like.
3. Looking at properties.
We’ll have set up a time to meet and start to go out and actually look at places. We usually hop in my car, and then go look at places but we can go in separate cars too. This is the part where you find out that the properties often look quite different in person than they do in the listings, sometimes better, sometimes worse. Sometimes you find something that suits you right away and sometimes you have to look for a while. Sometimes you have to adjust your expectations and/or price range. Eventually, we should be able to find something that you enjoy.
Perhaps I should mention that I don’t double end properties as a policy. This is rare for Realtors, as it’s a method for making a lot more money, but I frown on the ethics of it. Read more about it here if interested. (It’s halfway down the page.)
4. Making an offer.
This is when people’s emotions start to rise. You’ve found a place you like and now you try to see if you can get it at a price and with terms that you find acceptable. The thing is, the seller has to find the offer acceptable too in order to progress to the next stage. Expect a couple of days of negotiating before you find out whether you have to go back to step two or three again or if you can continue to the next step.
If all goes well, the next thing is to write a cheque for the deposit which will be held in trust by my company. This will form part of the purchase price, but you’ll get it back if you have to collapse the deal legally. (The idea is that if you don’t collapse the deal legally, they keep the money. Something I’ve yet to see happen.)
5. Removing Subject Clauses
A lot of people (clients) put their energy and focus into the negotiating part of the deal, but it’s actually not the most involved part of the process. Removing subjects is. Subject clauses are the parts of the contract where the sale of the property is “subject to” a variety of things that need to be done by a certain date before the contract can proceed to closing. The time period for this is usually less than two weeks after an offer is accepted. Depending on the type of property and the particularities of the sale, you will have different clauses to remove. But for the sake of example, let’s say you’re looking at a house and the situation is pretty basic/common, you and I will have to get the following done before the sale is finalized:
- Get the go ahead from your mortgage broker regarding financing
- Have the property inspected by a professional inspector to ensure that it is not in a condition that is substantially worse than it appears (It’s important to note that real estate in B.C. is sold “as is, where is” meaning, that there is no warranty.)
- Approve a Title Search
- Approve a Property Disclosure Statement
- Arrange fire insurance for the property
If we can satisfy all these criteria then you sign for the subject removal and then you’re done with me until you move in. The other professionals you use will probably still want to talk to you though.
THEN, you move in! I’ll meet you in front of the property in question on the happy day and hand you the keys. That’s when everyone jumps with joy, hugs me and promises to name their first born after me. Ok, I’m joking, but it is a happy day for all involved.
But like I say, it’s often more complicated than this. All these and many other measures exist to protect you, so don’t feel intimidated by the process. I’m here to help.
It’s one of those things that sounds harder than it is. Many of my clients get to the end of the buying process and say “What? That’s it? I just bought a house?!”. What they don’t know is all the goings on behind the scenes that made it easy for them to get to that point. That’s not a bad thing though, it just means things have been done properly and that things went smoothly.