Bringing it all together – the home buying process
The most important part of home buying process is to find the right property for you. Be sure to visit the Listings pages above to see the properties available in the Cowichan Valley.
Useful search tips
- Use an app designed for house-hunting, to keep track of each property you visit, and store photos of things you like.
- Take pictures when viewing homes so you can reference them or get a second opinion.
- Be critical when viewing homes: View it at different times of the day, talk with the neighbours, look deeper than surface details.
- If it’s new, ask if the home has an energy rating.
- Check local area statistics and trends at the CMHC website. We can help you with this step using data from the Vancouver Island Real Estate board.
Make an offer to purchase
When you have found the perfect home, the next step in the home buying process is for us to present the owner with your “offer to purchase”. This offer is conditional on financing, home inspection and other safeguards that we will suggest depending on the transaction. A written offer and a small, refundable deposit gives the owner some assurance that you are serious about purchasing the property. When conditions are removed the contract is said to be “unconditional” and is a binding offer. A typical offer to purchase may look like this:
- Initial offer is made with conditions for inspection of premises and condo minutes and financing
- Vendor returns the offer with a counter offer (or different possession date, higher deposit, etc.)
- You may or may not wish to return the offer with amendments and changes
- The vendor may or may not accept your counter offer
- If they do, proceed with your conditions fulfilment like a home inspection
- We will help you to remove conditions by arranging professional services
- Visit your lawyer a week before the closing date to sign the paperwork
- Take possession on the closing day (the keys will be at our office for you to pick up)
Obtaining a mortgage
You should always obtain a pre-approval from a lender or mortgage broker before entering negotiations. Your offer to purchase will always contain the clause “subject to financing” as a safeguard for your benefit (unless you are paying cash for the property) but knowing that you’re able to make an offer is a significant advantage in a competitive market. Be aware that a pre-approval isn’t a letter of commitment, which is a legal promise to advance a mortgage, it’s only an approval in principal based on the qualifications you presented at the initial application. Your lender may require a property appraisal, land survey, and other information about the property to confirm that it is worth the purchase price.
Conventional mortgage
This is a loan equal to or less than 80% of the property’s lending value. The lending value is the market value or the purchase price, whichever is less. This type of mortgage does not require mortgage insurance.
High-ratio mortgage
This is a loan for an amount greater than 80% of the lending value (the maximum ratio is 95% loan to value). This type of loan requires mortgage insurance at rates based on the total amount down which is added to the mortgage so you can make payments on it.
Mortgage term and amortization
The term is the length of time for the mortgage contract and amortization is the total length of time the payments are spread over. For example, you might have a five-year term with a 25 year amortization. In this casae, your payments will be based on 300 months and the contract will need to be renewed with a lender after five years.
Payment schedules
You can choose a payment schedule that is convenient and efficient for your situation. More frequent payments can reduce the overall interest and shorten the amortization time. It may be convenient for you to choose a payment frequency similar to your pay cheque.
Questions? Contact Constantin and Mariana Popa for more information on the home buying process.
