Before Writing an Offer
First of all, thank yourself for taking the time to read this post. Knowledge is power and there is a lot of important information that you should know before you purchase any property.
The first important piece of information I want to highlight are the costs born to the buyer. It happens often, unfortunately, that after finding their dream home and entering the financing phase, buyers discover their purchasing power falls short of what’s required, as there is more to buying a house than just the listing price. This frightening realization often causes the deal to collapse. I would highly recommend consulting with a mortgage broker, financial advisor or lawyer to find out how much of your financing will need to be held back for the following:
Lawyer or Notary fees and expenses:
- title search
- drafting documents
- land title registration fees
- survey certificate (if required)
- mortgage company’s lawyer/notary
- appraisal (if applicable)
- fire insurance premium
- sales tax (if applicable)
- goods and services tax (if applicable)
- property transfer tax (1% on first $200,000 - 2% up to $2,000,000 - 3% over $2,000,0001)
Once you find your perfect home and before you consider making an offer, please make sure that your Realtor presents and explains the title to you. There may be easements, charges, right-of-ways and liens on the title that are crucial to understand and require further investigation.
A prudent Realtor will
- ensure that all documentation is pulled through land titles
- explain to the buyer what each notation means
- help the buyer to seek legal advice if needed.
I would also highly advise a visit to city hall to collect information pertaining to the home and land. For example, the topography on the Sunshine Coast consists of peat in some areas, bed rock, agricultural grade soil and some areas prone to slumpage; knowing what your home is built on or what it is near is important and necessary for mitigating any unwanted surprises down the road.
Now that your financing is in order and you are satisfied with the title, the next important step in my opinion (and rarely do I advise otherwise) is a quality home inspection. Buyers often feel pressured to skip this step because they “may lose the bid”, but unless you are buying holding property or you have deep pockets,
I strongly suggest a home inspection.
An example of the importance of a home inspection lies in a common feature of Coast properties: the use of septic and wells. With proper inspection and maintenance, significant problems are easily avoided. However, not all homeowners are as responsible as you. If you are thinking of purchasing a home with a well, I advise you to have your own independent water testing done. If you are considering purchasing a home on septic, often the contract will stipulate that the seller pays to have it pumped upon purchase and the buyer pays for the inspection. If your inspection comes up clear, this doesn't mean that there could not be a problem elsewhere, therefore, it is a good idea to inquire with neighbours about any sewage smells from around the home.
I am going to talk about the Property Disclosure Statement (PDS) for a moment here because it speaks to the overall condition of the home. It is important that your Realtor explains the meaning of each box on the PDS. Final Home Occupancy, for example, is a final permit given by the city which certifies that the home passes all building codes. It is typical that a home 20 years or older may not have such documentation, but it would be wise not to assume and to check with the city regardless. Another reason a home may not have Final Occupancy is if an addition was made to the property that is not to code. The city can advise you on what could be minor or significant issues. Also, it’s important to note that sellers are not required to fill out the PDS, especially if the home owner did not reside in the home.
Mortgage helpers are very popular these days and can also help bridge the gap until you are ready to move into the home. Please proceed with caution here. Essentially there are three types of suites you’ll find in most municipalities; legal conforming suites (the best scenario), legal non-conforming (zoning for the lot allows for a secondary suite but there are no permits in place for the suite); and final non-legal (the zoning does not allow for a secondary suite). If you choose to buy a home with a non-conforming or non-legal suite, you accept the risk of having the city demand that the suite be returned to the original state or brought up to code.
Is it the right fit?
Now that all the cards are on the table, determining if a home is the right fit for you and your family is the final step before choosing to make an offer. Some things to consider are required maintenance, location and usage.
Maintenance: Something to realize about the Sunshine Coast is that you are on Coast time! This means that some things (most things) take a bit longer than what you may be accustomed to. But that’s why you’re moving here right! For the incredible lifestyle. What this means in terms of maintenance is that work to be done on your home can sometimes take a really long time, mostly due to shortage of trades people. The Coast is having a hard time keeping up with the demand of people buying here and all the major building projects underway. A lot of new builds are being booked into 2018 currently.
Location: I mention location because it is important to evaluate where the home is in relation to services and school district if this applies. Location really makes a difference in your ability to enjoy your home; for example, can you get cell reception and how often are there power outages in that particular neighbourhood? If you have kids please get some feedback on the local schools, what catchment you are in, and whether or not they accept cross boundary students. For example, for the 2016-2017 school year, West Sechelt was completely full and was not accepting cross boundary students.
Usage: Ask yourself, will I/we be happy here and does the home suite my/our purpose. Is there enough bedrooms, bathrooms, storage space, etc…. make sure all the really important things are checked off your list. It is almost impossible to find a single home that has everything you desire, so deciding between what’s on the market is hard because each house will have a different set of attributes. If you determine what’s the most important to you (a large kitchen? Plenty of storage space? en suite bathroom?), deciding on the right house will be much easier.
I hope you found this information useful. It’s a lot to take in and understand, but I am always available and happy to answer your questions.