Information for Buyers

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Buying Kamloops Real Estate: How The Buying Process Works

February 9, 2009 in Information for Buyers, Information for Sellers by Kirsten Mason | 1 comment

Buying a home or investment property in Kamloops is a big decision. There are many steps to take along the path to finding that perfect property. Many buyers have no idea how to buy a home and don’t know where to start. Here is a guide for buyers who are a little foggy about the home buying process from start to finish.

1. Get Yourself Representation: A Realtor is your best resource for information. A Realtor is a free resource for buyers (commission is paid by the selling party) and will represent your best interests for the entire transaction. This Realtor will organize and accompany you to all appointments, answer any questions you may have and provide you with detailed information on all the properties that interest you. If there are any questions that you have about a property and it requires further investigation your Realtor will help discover all the answers you need.

2. Writing An Offer To Purchase: Once you find a property you want to make an offer on. Your Realtor will write up all the necessary paperwork creating a legal contract for the purchase of the home (Contract of Purchase and Sale – CPS). The details in this document are the dollar amount of the offer, the deposit amount (held in trust at the buyers agent’s brokerage), the day you want to have the keys to the property, items that you want included in the sale (i.e. appliances, window coverings, etc), subjects in the offer (i.e. Home inspection, Financing, etc.) and any other details important to your purchase.

3. Explanation of Subjects: Many buyers are not informed about how the contract works. When you make an offer there are standard “subjects” in the offer. These subjects (depending on whether the property is a strata, freehold, mobile, bare land/lot, etc) are different for each offer. To keep this relatively short I will outline the standard residential and strata subjects which commonly are:

- Subject to Financing (obtaining approval for a mortgage).
- Subject to a home inspection.
- Subject to a property Title Search: Any right of ways, easements, etc. are detailed on title as well as all registered charges against the property such as mortgages and liens.
- Subject to a Building Information Report from the City of Kamloops or Thompson Nicola Regional District.
- Subject to fire/property insurance.
- Subject to the buyer being satisfied with the Property Condition Disclosure Statement (PDS) which is provided by the selling party.

For Strata properties there are further subjects such as the buyer will approve:

- Form ‘B’ which details strata fees/financial information regarding the strata.
- The strata plan, amendments and/or changes.
- Current Bylaws and Financial Statements of the Strata corporation.
- The minutes from the strata council meetings.

The subject removal period is commonly between five to ten business days after the contract is accepted. It can be shorter or longer and must be agreed to by both parties.

Once the subject removal period is near expiry, the buyer can do one of a few things: remove the  subjects, making the offer unconditional, extend the subject removal period or not remove the subjects and walk away from the offer due to the inability to fulfill one of the subjects. In a nutshell. If a buyer does not remove subjects the offer is finished.

4. Legal Conveyancing: Once subjects have been removed the CPS (Contract of Purchase and Sale) is unconditional and goes to the Lawyer or Notary for legal conveyancing. At this point the buyer and seller have committed to completing on the offer to purchase.

5. Final Steps: Between the time of “completion” (meaning the title is being transferred, mortgage is put in place, etc) and “possession” (you have the keys to get into your new home), your Realtor will do a walk through of the property to ensure that all the included items are in the home, it is left in the condition expected and that there are not any other issues with the property before possession. This short time (usually 24 hours) will give your Realtor time to ensure that any issues are dealt with before you move in. Ensure that you get a moving checklist from your Realtor which will help to ensure you get all the necessary things done before you get possession, simple things like arranging Hydro, changing your address, etc. These things can be easily overlooked during this busy and exciting time.

6. Welcome Home: Possession day, you get the keys. Your Realtor will meet you at the property, give you all the important items and information, and walk through the home. At this time you can address any questions about the property.

7. Follow Up: Your Realtor should follow up with you within a week after possession. He or she will want to ensure your move went well and that there are not any issues or further questions.

Low Interest Rates + More Negotiating Power = More Affordable Real Estate!

February 5, 2009 in Information for Buyers by Kirsten Mason | No comments

What usually happens, as interest rates decline, real estate buying power increases. Currently interest rates are at the lowest they have been in years. The lower interest rates coupled with the current buyer’s market makes buying a home more appealing. Buyers find that when the interest rates are very low, they qualify for more of a loan than when rates are high.

This shift in the market has created a great opportunity for first time home buyers, buyers and renters looking to get back into the Kamloops market. The savings on home buying are in both the purchase price of the home and interest charges. Buyers are able to negotiate more aggressively on a contract now than years in the past. I have found that lately more first time home buyers have begun their search for the first time. Buyers who are also looking to get back into the market or have been renting for a number of years are also beginning to see the value in the lower home prices and low interest rates. Homes in Kamloops are finally beginning to be priced in a range where buyers can justify purchasing a home. Plus, for first time home buyers, they receive further savings because first time home buyers don’t have to pay property transfer tax.

All these factors make buying your first home, getting back into the real estate market, moving up to a larger home or downsizing your home more of a reality!

CMHC And The First Time Home Buyer

February 2, 2009 in Information for Buyers by Kirsten Mason | No comments

As the Government of Canada’s national housing agency, Canada Mortgage and Housing Corporation (CMHC), plays a major role in Canada’s housing industry. The agency offers numerous housing services including research services, market evaluations, and access to affordable financing choices. Programs include aboriginal housing, residential rehabilitation assistance, home adaptation for seniors independence, public and private partnerships and numerous grants and awards.

For many people, especially first time home buyers, saving the necessary down payment is a challenge. Additionally, with less than 25% of the purchase price to put down, a lender requires mortgage insurance for protection against any payment defaults. CMHC makes it easier for Canadians to obtain a home, by providing mortgage loan insurance. By providing this insurance, CMHC limits the lenders’ risk, allowing the lender to finance up to 95% of the purchase price of a new home. You can purchase a property with as little as 5% down. If the cost is $150,000, you only need a down payment of $7,500.

You can become a homeowner, even if you don’t have a large down payment put aside. You just need to meet the following conditions and home ownership can be within your reach.

* The home must be located in Canada and considered your principal residence.
* You must have a down payment of at least 5% of the purchase price.
* Your home-related expenses must not exceed 32% of gross household income
* Your total monthly debt load must not exceed 40% of gross monthly household income
* You must be able to pay closing costs equal to at least 1.5% of the purchase price.

Link

The Future Of The Kamloops Rental Market?

February 1, 2009 in Information for Buyers, Kamloops Real Estate Info by Kirsten Mason | No comments

The real estate market in Kamloops has changed and become a buyer’s market. How will this affect the rental market in Kamloops? Well here is what I think will happen, and has already begun to present itself. Many people who have been trying to sell in the last few months have decided to take their homes off the market in favour of renting. These home owners will rent their properties for a few years in hope that the market will recover in that time. Currently, there is a very high inventory of homes on the market, and there aren’t enough buyers out there for all these homes. Rising inventory and dropping sales is adding to the rental supply as numerous listings expire and sellers pull their properties off the market. There has been a lot of new construction in Kamloops, single family homes, duplex units, townhouses and apartments. With all the new buildings just built and some other developments scheduled for completion in 2009/2010 there will be much more rental supply.

It is inevitable that monthly rates to rent a home will eventually fall in Kamloops because of an increased supply, more choice and more competition among home owners to get responsible tenants. This is great news for those who rent in Kamloops, the opportunities to pay less for more will eventually be a reality.

With prices coming down renters will soon be able to afford a home of their own. Those who previously couldn’t afford mortgage payments because of high housing prices will soon be able to take advantage of lower property prices, low interest rates and more leverage in negotiations for a property.

Falling rental demand or rates has not happened in Kamloops yet. There is still a very low vacancy rate among residential units. This change will take some time, it typically trails the real estate market. If you are a first time home buyer, or currently renting and want to look into buying, now is a good time to start watching the market. You will be amazed by the price changes over the next six months to a year. To receive new, price reduced and sold listings as they are reported to the Kamloops Real Estate Board click here.

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