Buyer FAQS

How much do I need for a downpayment?

If you are purchasing a home under $500,000 you can put a minimum of 5% down (ex. Purchase price of $400,000–you would need $20,000 for a downpayment) If you are looking at a home between $500,000 to $999,900 You are able to put down 5% on the first $500,000 and 10% on the remaining (ex. Purchase price of $850,000–you would need $60,000 for a downpayment). If you are looking for a home over $1 million, you will need a minimum of 20% down (ex. Purchase price of $1.5 million–you would need $300,000 for a downpayment).

Why do I need a pre-approval?

If you are serious about shopping for a home, or if it is a goal of yours to own a home one day, it is good to get proper pre-approval and advice from a reputable mortgage broker. This is not something that an online calculator or your accountant can do. Mortgage brokers dig deep into your financial health and history. Normally, they will need to see two years of tax detail, pull your credit, and more. They can also break down what you need to do if you aren't eligible at present, to increase your chances of approval in the future. Often, this will involve guiding you in ways to prove your credit, make more money, increase your savings, or even open more trade lines so as to show that you are capable of managing debt. If you want more information on this process, click here.

If you're a first time buyer you have potential to be exempt from paying property transfer tax. To qualify, you'll have to have never owned a home anywhere in the world and also been a BC resident for the past 12 months or more. The property in question must be priced under $450,000, but if you are purchasing a brand new home from a developer then it must be priced under $750,000.

Do first time buyers pay property transfer tax?

If you are a first time buyer you can be exempt from property transfer tax. You must have never owned a home in the world and lived in BC for 12 months. The home must be under $450,000 or if you are purchasing a brand new home from a developer the home must be under $750,000.

How much is property transfer tax?

1% on the first $200,000
2% on the portion between $200,000 and $2 million
3% on the portion between $2,000,001 and $3,000,000
5% on residential properties priced higher than $3,000,000

How much is the foreign buyers tax and what areas does it include?

As of February 2018, the Foreign Buyers Tax is 20% for the Greater Vancouver Regional District, Capital Region District, Fraser Valley, Central Okanagan, and Nanaimo Regional District. For a full map of the regional district areas in BC, click here.

Do I pay GST on a home?

GST is normally applicable on homes that are brand new or if homes have been run as a business. Your Realtor can advise you on what clauses you need in a contract if you are not sure if GST is applicable as you never want to be caught years later with a bill for GST on your home purchase.

What fees are associated with buying a home?

Home inspections will often price out at $400-$800 depending on the size of a property. Some inspectors will also read over the depreciation reports for stratas, which if offered should absolutely be taken advantage of.
Perimeter drain inspections cost around $200
Septic tank inspections: Seller's will cover the pump out (around $500) and Buyer's will cover the inspection (around $600)
Title transfers with a notary or lawyer cost around $1200
Oil tank scans will range in cost from free to a few hundred dollars

What is a condition or subject ?

A condition or subject is a stipulation in the Contract of Purchase and Sale that allows the buyer to do their due diligence and get their mortgage loan approved. On our Contracts of Purchase and Sale, we build some standard conditions right in. Each sale will be unique, so we also have a lot of conditions and clauses that can be added in if needed. If you have any questions or would like to know more please contact us to discuss.

If I have pre-approval do I need a condition to arrange financing?

Just because you have a pre-approval with a rate hold, does not mean you have your financing in the bag. The lender will want to see a full purchase agreement with the Property Disclosure Statement and any tax information. They may also do an appraisal of the home, done once you have an accepted offer and never prior to. The lender could also ask you for updated or extra documentation, so be prepared to provide that information to your mortgage broker in a timely manner.

What are the standard subjects or conditions on a contract when I purchase?

In our Contract of Purchase and Sale, we have some standard conditions that are built right in:

Subject to arrange financing
Subject to doing a home inspection
Subject to reviewing (and approving) the title and any extra charges on the title
Subject to getting an insurance quote and ensuring the home is insurable
Subject to reviewing a minimum of two years of strata documents (only applicable to strata properties)
Subject to reviewing and approving the Property Disclosure Statement (normally done right away and included in the offer)

If you would like to see a sample contract, then please click here.

How much time will I get to fulfill the conditions?

The best answer is that it depends. Some contracts will only give you a couple of days while others might allow six weeks (ie. if someone has to sell their house). Starting early 2021, and back in 2016, a very hot market saw most contracts going unconditional, which takes a lot more work because everything has to be taken care of and proven prior to making an offer. Time is of the essence.

After I remove subjects, what happens next?

This is great! Now you have a firm deal, and once you remove your subjects you'll be required to provide the deposit you agreed upon in your contract. Usually, this is expected within 2 business days of removing the subjects, and it will count towards your total downpayment and be taken into consideration at the time of closing. There are also some additional steps that need taking care of at this point.

What is a deposit?

A deposit forms part of your downpayment and is collected normally by your realtor and then held in their brokerage's trust account until the closing date of your home purchase.

Do I need my own realtor when I am purchasing a home?

The short answer is definitely, YES! When you are buying a home, having a Realtor to represent you is free. It is the seller who normally pay for their commission.

Will I save money if I use the sellers Realtor?

No, this is not accurate. In 2018, the rules for British Columbia changed and dual agency is no longer allowed. If you do make an offer with the seller's Realtor, you will be considered an unrepresented buyer–you aren't able to get advice or help whatsoever. You might think it's no big deal, or that real estate is straightforward and you'd rather save a few dollars on this, so here's a short but very real story of what happened to one of our own when they bought their first condo.

Andrew's First Purchase

Andrew Wade, our in-house mortgage broker, bought his first condo in 2010 at the age of 25. He was a first time buyer, new to the industry, and didn't believe he needed any help, from a realtor, home inspector, lawyer etc. He believed in fact, that it was a total waste of money.

He found a perfect condo right here in Victoria, BC. He decided to save some money and contacted the listing agent (who will not be named), making an offer to purchase the condo that got accepted.

To save money he also didn't hire a home inspector and walked through the condo himself with his father and a friend to help. They looked at the plumbing, wiring, and finish work in the condo–everything looked good to them! Andrew read through all the strata documents himself and did spot that the strata had an engineers report that was complete and should be out a few days after he removed conditions.

He had arranged his financing and had everything ready to go to move forward, but wanted to ask for an extension for a couple of days to read the finalized engineer's report before officially continuing. He emailed the listing agent who but his request was denied, and was told that if he wanted the condo he would have to keep going with the original agreement. He did of course–a cringe-worthy move in real estate for a few different reasons:

First off there are normally a few draft reports that are made before it is deemed finalized, which the strata council would have seen. Andrew most likely could have gotten a copy, if he or “his realtor” had spoken directly to the council about the matter. Another big red flag was the question "Why would a strata pay for a major report unless work needed to be done or something was wrong with the building?" Strata’s do not normally blow a bunch of money on a report if it is not totally necessary. Thirdly, the Seller was living in the condo and knew about the report, what was in it, and just lied because the report would have devalued the condo and made it next to impossible for anyone to get financing on.

The report came out a few days later and Andrew did not receive, nor did the listing realtor provide him with, a copy prior to closing a few weeks after that. He was super excited to move in–who isn't excited when they buy a new home? He had saved up to put 20% down and put all his savings into buying this first place. Unfortunately, not long after he moved in he was hit with a gut punch: the engineer's report showed that the building needed over 2 million dollars worth of work (new windows, concrete fixes, etc.) For his unit alone, Andrew would have to pay $48,000!

Still wondering if you should be represented by a realtor? Didn't think so.

How can I determine how much property taxes will be?

The property taxes are different for each municipality. When properties are listed, the latest tax amount gets shown. They can even be wrapped into your mortgage once you agree to purchase the home.

Why do some houses say they are freehold strata?

There are a few types of strata. A freehold strata will be the most common type you'll come across, signifying that the land is owned not leased so you'd be purchasing the unit entitlement or lot. Other forms of strata you might see include hotel, leasehold and co-op, which are all harder to receive a mortgage for and run a little differently.

What if I need to sell my house in order to buy another house?

This can look different for each person. We recommend talking to your Realtor, as well as a trusted Mortgage Broker to make a plan that works for you.

I want to buy a house with a suite I can rent or AirBnB. What are my options? What are the rules? How will this affect my mortgage?

If you are looking for a home with a suite for long term renters, it will help you qualify for a bigger mortgage and hopefully help you pay off that mortgage faster. If you are thinking about using a suite for short term rental purposes you will need to look into the rules for each municipality as they differ.

You should note that in order to get a mortgage most lenders will not count “short-term” rental income, so you might not be able to get a larger mortgage unless the loan is purposefully processed for long-term rental and once you close and move in, then start up your short-term rental as you see fit.

If I buy a lot, what do I need to know before building? Who do I need to contact?

When purchasing a lot, the main things you need to know include:

The lot lines. A lot survey should be made available!
What services are at the lot (ie. water, sewage, hydro, etc), and if there aren't any then how much it will be to get the services there.
The max size of structure you can build, including how big of a footprint it can have and how many stories high. This will be determined by the municipality's zoning laws.
We also suggest walking the lot with your contractor (if you have one). If you don't have a contractor in place already, start shopping for one during the condition period because they can give you insight on costs and timing.

If I buy an old house to tear down and build a new one instead of, what do I need to know before building? Who do I need to contact?

When purchasing a home to tear down, you'll need to know:

The lot lines. A lot survey should be made available!
What services are available already and if you will need to upgrade them (ex. 100 amp service to a 200 amp service, changing from septic tank to city sewer, etc.)
The max size of structure you can build, including how big of a footprint it can have and how many stories high. This will be determined by the municipality's zoning laws.
Does the home contain hazardous material? Disposing of this will have a cost. Another option though, is to sell the home through a house-moving company–they will move the house off the lot for you, which can save you money as you're not paying for the labour involved in tearing the home down and then dumping all that material.
It is always important to have a good contractor. If you do not have one prior to looking for a lot to build on, get one asap so when you find that right property, they'll be able to help you through the processes. Plus, they can often be booked up for jobs (up to a year or more in advance) so proactivity is key!

If I buy a condo or townhouse in a pet friendly building/complex, can I have any size dog I want?

No, each complex will be different. Some won't restrict size (normally newer complexes) but others will likely have a weight and/or size restriction. If you do have pets, it's good to let your Realtor know right away so they can adjust your property search.

If I buy a condo, and my neighbours (who also own their condo) are really noisy all the time, what rights do I have?

All condos or strata type properties have bylaws that run with the complex, covering concerns such as quiet hours, guidelines for making complaints, and even issuing fines. If a neighbour is noisy often, and compromises your right to quiet enjoyment, they will likely rack up fines with the strata–often up to $200 each time!

Is there a penalty for paying more than my monthly mortgage to pay it off faster? Is there any benefit to doing that?

Yes and no. Most mortgages allow you to double-up payments and even put down a one-time lump sum payment once a year (normally 10-20%). If you can do it it's highly recommended–you will pay off your home faster and pay less interest. Now, if you want to pay off your mortgage in full or even just break the mortgage term to purchase a new home or change lenders to save on interest, then you will run into fees. A good mortgage broker can review your current mortgage and let you know the best options available to you before you proceed.

What if my credit isn’t great? Not bad, but not good either.

Credit is very important when you purchase a home, however you don't absolutely have to have a perfect score. You'll just need a minimum credit score of 600 to purchase a home. If your credit sits under 600, you might be able to go with a B lender but should know they'll likely offer a slightly higher interest rate and you possibly 20% down. Click here to learn about improving your credit score!

What if I filed bankruptcy in the past?

You can still purchase a home! As soon as you receive your absolute discharge, you can qualify for a mortgage again.