Buying a home in Nanaimo or anywhere else on Vancouver Island involves several steps, and can be an overwhelming, stressful process. Here’s a step-by-step guide to the home buying process in British Columbia and how you can make sure it is a smooth and stress free experience! From finding the right team all the way through getting your keys, we have outlined the road to home ownership below!
1) Find a good team! Whether you start with a realtor or a mortgage broker, you need both and that should be your first step!
Mortgage Broker: Start by finding a reputable mortgage broker who can help you navigate the financing process and secure a mortgage preapproval. While banks were the traditional place to start, a mortgage broker will save you the time and effort of shopping multiple lenders. They will find the best lenders available to you to make sure you are getting the best rates, best mortgage features, and utilizing the best lender guidelines to maximize your buying power while meeting the needs of your personal situation. Make sure you find a mortgage broker that is going to work for you and is client-focused. Our team of licensed Mortgage Brokers will put you first above all else. We will provide you with transparent and consistent communication while making sure you are as stress free as possible throughout the process.
Realtor: Engage the services of a qualified real estate agent who is knowledgeable about the local market and can assist you in finding the right home. It is important to work with someone you feel comfortable with and trust because they will be negotiating on your behalf to get the best possible deal on a home. If you don’t have someone in mind, we work closely with several professional, honest, knowledgeable, and reliable realtors that we can refer you to.
2) Get Pre-Approved. Once you have chosen your team, you want to make sure you are shopping for a home that is within your budget. Work with your mortgage broker to gather the necessary documentation to get pre-approved for a mortgage. This step will give you a clear understanding of your budget and help you focus you home search. Depending on your personal situation, our team of Mortgage Brokers can likely secure you a rate hold, provide future planning advice, help with long term budgeting and monthly cashflow calculations, or even help you set and achieve goals to buying your dream home in the future!
3) Get your finances in order. During the pre-approval process, it is important to review your financial situation. This includes your credit score, debt-to-income ratio, and savings. Pay off any outstanding debts, organize your financial documents, and ensure you have sufficient funds for down payment, closing costs, and other expenses associated with buying a home. Our team is here to help guide you and provide estimates for costs associated with home ownership, so be sure to ask any questions along the way, even if it isn’t directly related to your future mortgage.
4) Start the search! One of the most fun and exciting steps of the process is actually shopping for your future home! Collaborate with your realtor to refine your housing preferences, such as location, property type, size, and amenities. Begin searching for homes that meet your criteria, utilizing online listings, open houses, and real estate platforms. During the search, your mortgage broker can take a look at properties you are interested in prior to putting in an offer. This will allow you to know the specifics of monthly costs for that home, as well as the likelihood of securing mortgage financing.
5) Make an offer (subject to conditions). Once you find a suitable property, work with your realtor to prepare your written offer. This offer should be contingent upon satisfactory inspections, financing approval, and other conditions you deem necessary. Your realtor will present the offer to the seller on your behalf with a specified amount of time to meet all conditions. During this time, you can conduct further due diligence, such as home inspections and review of property documents. If you identify any issues, you can either negotiate repairs with the seller, possible price reduction or withdraw from the offer without any negative fallout.
6) Recission Period. In BC, there is a homebuyer recission period after the offer is accepted. The HBRP came into effect at the beginning of 2023. A homebuyer can rescind an offer within three business days for a fee during this “cooling off period”, even if the offer was free of any conditions. For more details, please check out the BCFSA website here: https://www.bcfsa.ca/public-resources/real-estate/home-buyer-rescission-period
7) Get approved by a lender and insurer. Once the offer is accepted and the other conditions are being met, you will need to secure final approval from your lender. The lender will review your financial documents provided by your broker, appraise the property if required, and finalize the mortgage rate and terms. Additionally, you may need to arrange for mortgage default insurance and get insurer approval as well, if your down payment is less than 20%. Your mortgage broker will assist you throughout this process, working with the lender on your behalf to ensure all lender requirements are met within the subject to financing period.
8) Remove conditions! If all conditions are satisfied, you can proceed to remove or waive the conditions from your offer. This step confirms your commitment to purchasing the property and makes your offer “firm and binding”.
9) Obtain home insurance. Contact an insurance provider (or a few) to get quotes and arrange for home insurance coverage. This is typically required by lenders before the mortgage funds can be released for the purchase. If you can, get an insurance quote during your subject removal period (step 5) to make sure you are comfortable with the monthly or annual costs attached to it. Even if you are buying into a strata property, you will still require strata specific home insurance policy, so it is important to make these arrangements prior to step 10.
10) Find a lawyer or notary. In BC, you will need a lawyer or notary public to handle the legal aspects of the home purchase. They will review the purchase agreement, conduct a title search, prepare the necessary documents, and facilitate the transfer of funds and ownership of the property. If you are unsure how to find a lawyer or notary, our team can refer you to someone.
11) Take possession! The final and most exciting step! On the completion date specified in the purchase agreement, your lawyer or notary will transfer the funds to the seller, and you will receive the keys to your new home. At this point, you officially become the owner of the property and can move in!
While it still might feel overwhelming, buying your first home is one of the most exciting times of your life. We hope you can enjoy the ride and get to spend many happy years in your new home!