Rick Humphries Real Estate

Buying A Home

How To Find Your Perfect Home

To help you find your perfect home, one of the questions to ask yourself is what kind of neighbourhood you want to live in. Looking for a home can be an exciting and exhilarating experience. But before you start your search, you first need to figure out where you want to live and what your housing needs will be both now and in the future. To help you find the home that’s right for you, Canada Mortgage and Housing Corporation (CMHC) suggests you ask yourself the following questions:
  • How large a home do you need? Do you need several bedrooms, more than one bathroom, a home office or a two-car garage?
  • Are you planning on making any lifestyle changes in the near future, for example, are you planning on having children? Do you have teenagers who will be moving away soon? Or are you close to retirement, and looking to downsize to a smaller home? By clearly setting out your priorities in advance, you can help save yourself a great deal of time and trouble later.
  • Are there any special features you’d like your home to have, such as air conditioning, a swimming pool or a spare room for a hobby?
  • What kind of neighbourhood do you want to live in? Remember to take into account such features as how easy it will be to commute to work, whether your children will have a school close by, and how close you will be to family, friends and safe recreational areas and facilities.
  • Would you prefer to live in a new home or a resale? New homes offer such advantages as more personalized choices, up-to-date appliances and finishings, and often lower maintenance costs. But resale homes can provide easier access to more established services and mature landscaping, and may save you from having to pay GST/HST on your purchase.
  • What type of home would you feel most comfortable living in? The choices available on the market today range from single-family detached houses, semi-detached and duplexes to townhouses, modular homes and condominiums.
  • When you’re ready to start looking for a home, some good sources include newspapers, real estate magazines, the Internet, real estate agents and word of mouth. If you’ve decided which neighbourhoods you’re interested in, you can also spend a few days driving around them to look for new development sites or “For Sale” signs.

Tips For First-Time Home Buyers

Are you among the thousands of people in Greater Victoria who pay rent each month, knowing full well that you will never see that money again? For many, this need not be the case. Instead, why not take that money and build it into an investment that can last a lifetime? Right now there are excellent opportunities for first-time buyers. Mortgage rates are attractive and there are plenty of reasonably priced homes on the market.

What Kind of Home Do You Need and Want?

Buying a home is a balance of many requirements such as family size, location, income, and lifestyle. REALTORS® are excellent sources of advice and help in these matters. Not only do they have the experience and knowledge to make sure the choice you make will be the right one, but with access to the Multiple Listing Service® (MLS®), they can seek out suitable properties for you and provide you with a customized list of homes that meet your needs, wants, and budget.

Ask yourself exactly what you need in a home. How many bedrooms? How close to schools or shopping centres? Do you plan to have more children? Do you need a garage or a finished basement? New homes offer extensive warranties and pristine conditions but may not have mature trees or landscaping. Older homes often include improvements such as finished basements or rec rooms, decks, and patios. Be sure to have any resale home inspected for needed repairs or upgrading. Next decide on a preferred location. Living in the city means you will be close to amenities such as theatres and shopping. If you prefer a more rural lifestyle, make sure the extra time spent driving each day won’t detract from your enjoyment of the property.

Townhomes and condominiums are obviously suited to particular lifestyles or budgets. Townhome or condominium living offers convenience and often means sharing common areas such as parking, hallways, and landscaping.

What Can You Afford?

Once you have determined what it is you want and need, you’ll have to find out what you can afford. The first tip is to set a maximum price range instead of just an upper price. It’s not always wise to buy the most expensive home you can afford but better to aim lower in anticipation of extra costs or fluctuations in your income.

A REALTOR® or your financial institution can help you determine the amount of the mortgage you can carry by calculating your debt-service ratio. The rule of thumb is that the sum of all your current loan payments (car, personal, credit card, etc.) plus your mortgage should not exceed 40 per cent of your gross income. In addition, mortgage payments and property taxes should not be more than 30 per cent of gross income.

Buying your first home may seem intimidating in the beginning, but with careful planning, a clear idea of what you want and the help of a REALTOR®, home ownership can be becomea joyful reality for you and your family.

The Final Cost Of Buying A Home

The purchase price of your new home is the biggest cost you will come across in your home-buying venture, but it is not the only one. A REALTOR® can provide you with helpful advice about other costs involved, some of which may include the following:

  • Application / Mortgage Broker Fee – Processing your mortgage application costs lenders money. Consumers may be charged a fee by a lender or mortgage broker for setting up a mortgage when income or credit issues become more sensitive to the approval process.
  • Appraisal Fee — The money you borrow for your mortgage is usually a percentage of the home’s purchase price, or of the market appraisal — whichever is lower. The lender will use someone on staff or an independent professional to make this appraisal. You are normally responsible for this cost.
  • Land Survey Fee – A plot plan or survey of the property you want to buy is important to establish exactly where the boundaries are and make sure there are no encroachments such as part of your neighbour’s house or garage sitting on your land. Your lending institution will want to see such a survey and can let you know what their requirements are.
  • Insurance — If you are applying for a high-ratio mortgage — that is, if you are borrowing more than 75 per cent of your home’s purchase price — you will have to pay for mortgage insurance to protect the lender in the event that you fail to make the necessary payments. As your new home will be used as security for your mortgage; the lender will want you to have extended coverage and fire insurance.
  • You may also wish to check out the cost of buying mortgage life insurance. This insurance ensures that the mortgage balance is paid off if you or a co-borrower dies.
  • Legal Fees — These are the fees charged by a lawyer to help you complete the home-buying process. Disbursements are the costs involved in processes such as conducting a title search, drawing up the title deed and preparing and registering the mortgage.
  • Property Transfer Tax — this is calculated on the property’s fair market value (usually the purchase price) at the rate of one per cent up to $200,000 and two per cent of the price over $200,000. First-time buyers may be exempt from this tax subject to certain restrictions. Ask your REALTOR® for details.
  • HST — When you buy a new home, the entire purchase price is taxable. You may, however, qualify for a partial provincial New Housing Rebate if you plan to live in the home yourself. Ask your REALTOR® for details. A “used” residential home is normally exempt from the HST. Remember that HST is also applied to the REALTOR®’S commission and most other transaction fees such as legal and appraisal costs.
  • Other Costs — When you buy a home you will also want to budget for utility bills, annual property taxes and maintenance costs.
Why Hire Rick as your Buyer’s Agent