20 First Time Home Buyers Tips in BC – Ultimate Guide

by Richard Morrison
August 18, 2016
Buyers
0

Buying your first home is an exciting milestone! However, it can also feel overwhelming for first-timers navigating the real estate market. This comprehensive guide covers everything you need to know to buy your first house, apartment or townhome in British Columbia confidently.

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Key Takeaways

Get pre-approved for a mortgage to determine your budget
Research grants and tax incentives available to first-time buyers in BC
Hire a real estate agent to help you find listings and guide you through the buying process
Inspect the property thoroughly before removing subjects
Review strata documents carefully if purchasing a condo or townhouse
Budget for closing costs like legal fees and property transfer tax
Don’t stretch your budget on a down payment – leave room for moving and repair costs

Determine Your Budget

The very first step is to get pre-approved for a mortgage. This allows you to set a realistic budget for your home search. In BC, you may qualify for a mortgage with just a 5% down payment through CMHC.

Sit down with a mortgage broker or your bank to determine the max home price and mortgage amount you can afford based on your income, debts and down payment funds.

Getting pre-approved also shows sellers you’re a serious buyer. Your agent can include your pre-approval letter with offers to make your bids more attractive.

Explore Down Payment Assistance

As a first-time buyer in BC, you have options to reduce the amount of cash needed upfront for a down payment.

The First-Time Home Buyer Incentive lets you apply for a shared equity mortgage with the CMHC worth 5% or 10% of the home’s value. You don’t make payments on the shared equity portion, just pay it back when you eventually sell the home.

Through the Home Buyer’s Plan, you can withdraw up to $35,000 tax-free from your RRSP to put towards your down payment. You have 15 years to repay the amount withdrawn.

If buying a newly built home under $750,000, you may qualify for the New Home Exemption to reduce or eliminate the property transfer tax.

Look Into Grants and Tax Breaks

British Columbia and the federal government offer several incentives to lower costs for first-timers:

Property transfer tax exemption: Qualified buyers get full exemption on homes under $500,000 and partial exemption up to $525,000.
Home Owner Grant: Reduces annual property tax by up to $770 depending on your home’s assessed value.
GST new housing rebate: Get up to 36% of the GST back on new homes costing less than $450,000.
Land transfer tax rebate: Save on the additional 3% land transfer tax if buying in Metro Vancouver.
First-time home buyer’s tax credit: Claim $5,000 on your income tax return when you buy your first home.

Work With a Real Estate Agent

An experienced real estate agent who specializes in first-time buyers will prove invaluable during your home search. Here are key reasons to have an agent in your corner:

Gain insider knowledge about each neighborhood you’re considering
Get alerted to new listings and schedule viewings quickly
Leverage their negotiation skills to score the best possible price
Ensure all subjects are thoroughly inspected during the conditional period
Walk through the complex process and paperwork with confidence
Avoid rookie home buying mistakes!

Richard Morrison was absolutely critical to getting my offer accepted in Vancouver’s competitive market. His advice helped me submit a strategically strong offer at the right price.” – James T., Vancouver

Inspect the Property Thoroughly

Never waive your right to have a professional home inspection done during the conditional period. This gives you the chance to uncover any issues with the home’s structure, systems, appliances etc.

If major problems come up in the inspection report, you can typically negotiate with the seller to fix them, lower the price or get credits for future repairs. If you’re unsatisfied with the outcome, you can back out of the deal.

In hot seller’s markets, consider doing a pre-offer inspection so your bid isn’t conditional on the results. This strategy can make your offer more tempting to sellers.

Review Strata Documents

If buying a condo or townhome, you’ll want to thoroughly review the strata documents. This includes:

Meeting minutes – check for any upcoming major repairs or maintenance
Bylaws – make sure you’re comfortable with the complex’s rules
Financials – review budget/contingency fund to assess strata’s financial health
Depreciation report – outlines current condition of complex and future repair costs

Review the documents with your real estate agent and lawyer to spot any red flags. You want to avoid a strata with high monthly fees, special levies, pet restrictions, rental restrictions or other unfavorable bylaws.

Budget For Closing Costs

On top of your down payment, first-time buyers need to budget for various closing costs that come due on completion day:

Closing Cost	Estimate
Legal fees	$1,000 – $2,000
Property transfer tax	$8,000 – $15,000
Title insurance	$200 – $400
Home insurance	$50 – $100/month
Appraisal fee	$300 – $500
Land title registration	$100 – $300
Moving expenses	$500 – $5,000

If your purchase price is under $500,000, you may qualify to have the property transfer tax waived for first-time buyers.

Aim to have 1-2% of the home’s price set aside for other closing expenses and moving fees.

Don’t Overextend on Down Payment

Some first-timers drain their savings to make the biggest down payment possible. But this leaves little leftover for unexpected home repairs or renovations.

The CMHC now offers mortgage default insurance for down payments as low as 5% on homes under $500,000. With less money tied up in your down payment, you’ll have cash reserves to cover emergency fixes.

Aim to keep 5-10% of the purchase price accessible in your bank account once you buy your home.

Locate the Right Neighborhood

Choosing the right neighborhood can impact your happiness and the value of your property long-term. Here are key factors first-time buyers should consider:

Commute: How long is the drive or public transit ride to your workplace?
Amenities: Are grocery stores, doctors, parks, restaurants etc. conveniently located nearby?
School district: If you plan to have kids, research the local school rankings.
Safety: Review neighborhood crime rates. Do you feel safe walking alone at night?
Future development: Are new transit lines or other infrastructure projects coming soon?

Drive around neighborhoods at different times of the day/night. Narrow your search down to 2-3 favorites then spend more time exploring them before buying.

Final Tips for First-Timers

Make sure your offer includes a sufficient home inspection period. 10-14 days is recommended for thorough due diligence.
Bring in professionals like an appraiser and contractor to inspect the property, in addition to a general home inspector. Their expertise can uncover issues specific inspectors might miss.
Don’t let the excitement of buying your first home cloud your judgment. Always carefully review contracts and disclosures before signing. Ask your real estate agent and lawyer to explain any unclear parts.
If buying an older home, scope out nearby hardware stores. You may be making a lot of visits for spare parts and tools!
Change the locks right after taking possession of the home. You never know who the previous owners gave keys to.
Take lots of photos at the walk-through inspection before closing. Document any existing defects thoroughly so you aren’t blamed later on.
Shop around for the best rates on home insurance – discounts are often available for homeowners bundling multiple policies.
Get ready to meet your neighbors! Once moved in, introduce yourself and exchange contact info. Having a good relationship with neighbors is important.

With the right preparation and guidance, buying your first home in BC can be exciting, not stressful. Connect with an experienced real estate agent and mortgage professional to start the journey on the best foot. Your dream home awaits!

Conclusion

If you are a first-time home buyer in BC, there are several tips to keep in mind as you navigate the British Columbia real estate market.

First and foremost, make sure you are financially ready to buy your first home by assessing your budget and determining how much home you can afford. A helpful guide to buying your first BC home is to take advantage of any first-time home buyer programs that may be available, such as the BC Home Owner Grant.

Additionally, consider the value of the homes in the area you are interested in and make sure it aligns with your budget. When ready to buy, ensure you find the right home for you and your family, one that fits comfortably within your budget and meets your needs.

Keep in mind that as a first-time home buyer in BC, you may be required to provide at least 5% of the home’s value as a down payment.

Don’t forget to factor in other costs such as legal fees and taxes at the time of purchase. Lastly, consider reaching out to the Canada Mortgage and Housing Corporation for more information and resources for first-time buyers in BC.

Frequently Asked Questions

Q: What are some tips for first time home buyers in British Columbia?

A: Here are 4 tips for first time home buyers in British Columbia:

Q: How can a mortgage calculator help a first-time home buyer?

A: A mortgage calculator can help a first-time home buyer determine their mortgage rate and monthly payments.

Q: How much is the property transfer tax you pay when buying a home in British Columbia?

A: The amount of property transfer tax you pay when buying a home in British Columbia depends on the value of the property.

Q: Are there any assistance programs available for first-time home buyers in British Columbia?

A: Yes, there are assistance programs available for first-time home buyers in British Columbia. These programs can help you avoid common mistakes and may make you eligible for financial assistance.

Q: Is there a first-time home buyer guide available for British Columbia?

A: Yes, there is a first-time home buyer guide available for British Columbia. This guide provides tips and information for first-time home buyers in the province.

Q: What are some common mistakes to avoid when buying your first home in British Columbia?

A: Some common mistakes to avoid when buying your first home in British Columbia include not getting pre-approved for a mortgage, not working with a realtor, and not considering all the costs involved in homeownership.

Q: How can I find a realtor to help me with buying a home in British Columbia?

A: You can find a realtor to help you with buying a home in British Columbia by doing research online, asking for recommendations from friends and family, or contacting a local real estate agency.

Q: Are there any government programs for first-time home buyers in British Columbia?

A: Yes, there are government programs for first-time home buyers in British Columbia. These programs offer financial assistance and other benefits to help first-time home buyers purchase a home.

Q: What are some tips to help me buy my first home in British Columbia?

A: Some tips to help you buy your first home in British Columbia include saving for a down payment, getting pre-approved for a mortgage, and working with a knowledgeable real estate professional.

Q: How many first-time home buyers are there in British Columbia?

A: There are many first-time home buyers in British Columbia, as the real estate market in the province attracts both local and international buyers.

Sources:
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/first-time-home-buyers
https://www.cibc.com/en/personal-banking/mortgages/resource-centre/home-buyers-plan.html

Ready to turn your real estate dreams into reality? Contact Richard Morrison, Vancouver’s top realtor with 20+ years of experience. As a Medallion Club member and RE/MAX Hall of Fame award winning agent, he’s the expert you need on your side. Whether buying, selling, or investing, Richard’s personalized approach and deep market insights ensure a successful transaction. Reach out to Richard today at (778) 900-2235 and make your real estate journey seamless and rewarding.

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