Buying a Home or Condo? : Call Me On 604.773.2948 Or E-Mail Below
What Are The Benefits of Working With A REALTOR®: Everyone tries to save money where they can, that’s only natural. A diligent real estate professional can help you through the process and make sure you don’t make any mistakes. As a buyer the service is actually paid for by the seller.
Approval 101 – The Lowdown on Mortgages : Having a good understanding of the mortgage process is critical to being a successful real estate professional. There are many options available, which option to go for will depend on your tolerance for risk and necessity for stability in your payment.
6 Smart Ways To Make Sure You Win a Bidding War : The real estate market can be tough sometimes, especially in high demand segments of it. These steps will make sure you are prepared to win each battle on the way to landing your dream home.
The Hidden Costs of Closing – Identify and Budget : There are many expenses that come up during the buying process, some are completely unexpected unless you’ve seen them before. Not being able to pay closing costs can put a frown on anyone’s face, so make sure you know what to expect and plan accordingly.
Great Tips on Fixing Your Credit Score : Consumer debt is a constant in Vancouver life. We live in an expensive city with high expectations, and often people get trapped into trying to fit a particular image.
The Eight Secret Rules To Buying A Condo : One the biggest mistakes someone can make when buying a condo is to not being prepared to lay down roots in that location for at least five years. Being transient and being a condo owner don’t go hand in hand.
First Time Home Buyer Tips – A Guide For Property Virgins : We’ve all been there before, and it’s no doubt that buying real estate for the first time can be pretty stressful. Reading through this guide will give you a decent understanding of the process, and if you have any questions don’t hesitate to call.
Property Inspections Are Critical To The Buying Process : Whether you are buying a home or a condo, getting the property inspected before you agree to purchase it is a no-brainer.
To Rent or Own? That Is The Question At Hand : Renting is always a less expensive option, but owning a home provides financial equity and stability in the long run. Have a look at some straightforward advice on the topic and make your own decision on what is best for your personal situation.
Be Smart And Use Your RRSP For A Down Payment : An RRSP bank account is your retirement reserve that should not be touched until the time is right. While funds go in, ideally they should not come out until your retirement kicks in.
Home Buyer Wants vs Needs: How to View Properties : Viewing properties is a very exciting experience. Naturally, you’ll be focusing on the home itself, the space, the location and whether those all work for you.
Is Lowball Offering a Legitimate Buying Strategy? : A common topic among real estate buyers is whether or not they should offer a price that is much lower than the listed price. It’s an interesting concept, but one that is not without its pitfalls.
What’s Right For You: Townhouse or Condo? : There are so many things to factor into the equation when you are looking at buying a property. In Vancouver, the house market is out of the question for many first-time home buyers, but is a townhouse out of the realm of possibility?
First-Time Buyers Seek Freedom But Lack Patience : At one stage in most people’s lives there comes a time when you become tired of paying rent. Maybe there are pet restrictions that you no longer want to deal with, noisy neighbours or a landlord that never fixes things.
Are Multiple Units For Sale a Red Flag? : In the building in which I’m viewing a condo, there are several other units for sale – is this a red flag?
Should I Avoid Writing An Unconditional Offer? : I’m looking to buy a condo, but it seems all the offers I see getting accepted on the homes I’m interested in have no subjects. This makes me nervous – should I avoid doing this myself?
Can I Use a Second Bedroom as a Mortgage Helper? : I want to buy a two-bedroom condo but I’d like to rent out the second bedroom to help with the mortgage, like a mortgage-helper suite in a house. Are there rules around this in condo buildings?
OK to Ask to See Property at Different Times of Day? : I’ve seen a property that I really like, which I viewed at a 12 noon open house, but I’m not sure if the light is good, or whether the building feels safe after dark.
How Low is Too Low for Strata Fees and Contingency Fund? : We’re considering buying a unit in a 1970s, 36-unit condo building, which seems like a great deal and has quite low strata fees. But should we be worried about the building’s financial health?
Can I Make Purchase Offer on Condition of Permit Approval? : I have found a strata townhome that I love but it’s not quite big enough, so I only want to buy it if I’m allowed to build a small extension out back. Is there any way I can get City and strata approval before committing to the purchase?
Do I Pay GST on a Never-Occupied Unit? : I’m looking for a newer condo, and I know that if I buy a new presale unit, I would have to pay GST on the purchase price. So if I were to purchase a resale property that is a couple of years old and has never been occupied, am I excluded from having to pay GST on it?
Expectations Vs. Reality: A Home Buyer’s Guide to Being Realistic : Being realistic is often difficult for people looking to buy a home in Vancouver. I often joke with my clients about building a time machine for them, but I’m not too sure I’d be willing to share it if I could.
Location Vs. Amenities Vs. Schools: Picking the Right Neighbourhood to Buy In : One person’s ideal home is likely to be different from another’s, but there are many features that will be the same.
Is It Time To Own?
In other articles on this site we touch on the fact that condo ownership is always going to be more expensive than renting, but in the long term will provide security with the eventuality of being mortgage free, in addition to owning an asset. Being financially prepared for the home ownership is something you should look at conservatively. It’s easy to get blindsided by additonal costs if you aren’t ready for them.
The most common cost that most buyers are not prepared for is the Property Transfer Tax. First time buyers are exempt up to a limit of $425,000, but if you are buying for the 2nd time this is something you’ll need to be prepared to incur. A common scenario we come across is a couple looking to combine their assets into a larger condo unit. Perhaps they both currently own a one bedroom condo and have decided to purchase a 2 or 3 bedroom townhouse for more room. In this situation the couple should budget to incur a transfer tax on the purchase of their townhouse, but not the sale of their condos (this will be incurred by the buyers). If the townhouse they buy is $600,000, as an example, you need to be prepared to pay $10,000 in transfer taxes to become the legal owner of the home.
Are You Financially Ready To Own?
If you are paying $1500 a month for rent, it’s really not that much more to own with the current mortgage rates. If you buy a condo for $350,000 with 10% down, your mortgage payments will actually come in at approximately $1500 per month, so a wash between mortgage and rent. Add condo fees to the equation as well as city taxes and you are up to over $1800 per month, more but not really all that much more. So realistically not that much more expense than renting, no? The tricky part is generally the down payment, the more money you can put down the better. Be diligent with your RRSP savings account, the first time buyers plan allows you to borrow up to $25,000 from this to put towards a down payment. The bare minimum you need to put down is 5%, but this comes with additional fees.
An even better scenario is if you are combining two rental households into one mortgage payment, in this scenario I generally advise my clients to go for a shorter amortization when it’s possible. This will allow you to pay off more of the mortgage quickly, taking advantage of the historic low interest rates. Let’s say you are both paying $1500 in rent currently, and we find you a great condo that fits your lifestyle at $425,000. If you could afford $85,000 down (20% to avoid CMHC fees), the mortgage payment would come in at approximately $1580 per month with a 25 year amortization. If you went all the way down to a 10 year amortization the monthly payment would come in at $3250, very close to your combined rents. In this scenario you would be mortgage free in 10 years, a great goal to have!
Getting The Right Advice
Some real estate agents won’t hesitate to tell you buying a property is always right for you, without asking you questions about your financial preparedness. I’m very candid and honest with my clients, and while more often that not your financial viability to be an owner will come out during the mortgage approval process I will ask you those questions directly to get a sense of where you are at financially. It’s important to be honest with each other during the process, this is something I always bring to the table for my clients.
When you are buying a condo, you are also buying into the strata corporation which carries a fee structure to make sure the building is maintained properly. This is where a good real estate agent really makes their money, and honest advice is needed. Buying into a building that is mismanaged will incur more cost via the strata fee in the long term. A small strata/maintenance fee might look appealing on the exterior, but more often than not there are flaws underneath. Is the building fully rain screened? Are there any levies on the unit for sale? Does the building need any major repairs done? These are all things that will come out during the initial shopping process, but can also come out by reading the condo minutes once you’ve submitted an offer to buy the unit. Expertise is always helpful in this scenario, it’s always my goal to make sure my clients have the most amount of information possible.