Lockhearts Buyers Guide
Whether it is your first or your third, buying a home is a joyful privilege that can be a defining moment in our lives. This process can indeed be stressful, particularly when you approach it feeling short on knowledge. At Lockhearts we exist to make this smooth and enjoyable, not just because it can be, but because you deserve it to be.
This buyer’s guide is intended as the best first step for people new to the process, as well as a refresher for those who have been through it before. It is our way of giving you decades of industry knowledge in a neat little parcel so that you feel confident going into this exciting chapter of your life. So, what are you waiting for? Let’s start!
Transitioning from rent to equity
Preparing for this big step
Renting has so many benefits and can be the easiest way to keep a roof over your head. Though in our experience, even the most frantic lifestyles can benefit from a move up to homeownership.
Renting is a safe tactic, but not entirely risk-free. The added security you can provide to yourself and your loved ones by owning a home leaves you less concerned about a change in your landlord’s circumstances, as well as providing a secure retirement asset. Further, the freedom and flexibility to furnish and make changes that suit you best are some of the greatest perks of homeownership.
Factors that often prohibit us from pursuing this dream are often based around finance, but with today’s low mortgage rates and a range of financing options available, homeownership is more within your reach than you might think. Plus, don’t you just want to be paying down into your own pocket? When we rent we are paying somebody else’s mortgage, when you own your home you are building equity for your future.
So, if you’re ready to start dreaming big read on and equip yourself with all the knowledge you need to prepare.
The long term investment outlook
We’d love to be able to read the future. Over more than 40 years in real estate, we have learned that things can change and markets can move quickly, so preparation and patience are the best approaches to making smart investment decisions.
With the average Canadian property value steadily increasing year on year, owning your own home is also a sound investment and can be leveraged for future purchases. We don’t claim to know what will happen over the next 25 years, nobody can, but with a smart purchase in a great area, it is safe to assume that owning a home remains one of the best investment decisions you can make.
The financial return from selling a home that has increased in value is a benefit of a real estate investment - though we like to guide our clients to look at the long term, particularly as many of us will only seek to own one home over our lifetime. For us, the protection for your future, your retirement, and your beneficiaries are some of the greater benefits of homeownership.
What suits your needs?
When you think about the big decisions you make in your life, buying a home is right up there. Where we live both defines and is defined by the lifestyle and future choices we want to make. Choosing a property that benefits your well-being, work opportunities, and family goals is the best first step in your journey. Our in-depth needs assessment is designed to tease out these nuances and give you an insightful action plan to prioritise your search criteria.
Where?
Looking for a jumping-off point near the mountains? Or a commutable distance to work? In the ven diagram of life, choosing a location that fits every need and want is really difficult, but we are here to help you break down the decision into manageable steps. We’re experts in the areas that we serve and are able to give information on the lifestyle pros and cons of each area, as well as an in-depth assessment of the historical and future real estate market. This way we will find the perfect balance between lifestyle and financial benefit.
What?
Properties come in all shapes and sizes, each one is unique and beautiful in its own way. We’ll spend some time figuring out the best property size and style for you based on the outcome of our needs assessment.
Condo or apartment
Refers to a form of legal ownership as opposed to a style of construction. Condominiums can be high-rise residential buildings, townhouse complexes, individual houses, and lowrise residential buildings. Condominiums are also known as Stratas in British Columbia.
Row house or townhouse
One of several types of single-family homes joined by common walls. It offers less privacy than a single-family detached home but still provides a separate outdoor space. These homes can cost less to buy and maintain.
Detached house
The most popular style and the most solid investment. It’s a free-standing home that sits on its own lot offering a greater degree of privacy. In Canada, owning a detached, single family home is simply not an option for many buyers, especially first-time buyers.
Semi-detached house
Often referred to as a Half Duplex, is a single-family home that is joined to another by a common wall. It can offer many of the advantages of a single-family detached home and is usually less expensive to buy and maintain.
What budget do you have?
The next step in assessing your needs is to understand how large of a mortgage (if any) you can afford. We will determine how much mortgage you may be comfortable with and the potential price range of your future home. There are many factors that influence mortgage affordability, but the basic first steps are to quantify down payment, income, and expenses.
By assessing your total household income, how much you’ve saved for a down payment, and your monthly expenses (car payments, loan payment, living expenses, and so on), plus new expenses you’d take on (property taxes, condo fees, utilities), you can get a reasonable estimate. It is always best to speak to financial experts on this matter too, luckily for you we have a bunch saved on speed dial!
The exciting steps to finding your first home
Start with goal-setting
We will determine clear reasons why you are buying and what kind of home fits your unique needs. As we’ve already covered, the reasons for buying a home are numerous and are no longer limited to finding a permanent place for you and/or your family. Homeownership is assessed on its financial potential more so now than ever, so whether it is going to be your principle property, a second property, or a cash generating investment, goal setting will help us achieve the best path for you.
Buying and financing a home are closely related, so it is very important to review your current financial situation and to understand how much you can actually afford. During the process of finding answers to these questions, you will find that you are in a better position to understand both your housing and mortgage options, as well as create the appropriate action plan and timeline for moving forward.
Get pre-approved for a mortgage
Even though this process does not guarantee your approval for a mortgage, getting pre-approved will make the process of searching for properties much more straightforward. A mortgage pre-approval will allow you to understand the price that you can afford, enabling better budgeting and goal setting.
When looking for a mortgage, you can compare all of the best options offered by different institutions. In most cases, mortgage lenders have a process that can enable you to:
Understand the amount that your financial situation will enable you to qualify for
Estimate your monthly mortgage payments
Lock in an interest rate for 60 to 130 days, depending on the lender
During this process, the mortgage lender will review your financial situation to assess the maximum amount they will lend you, and what interest rate.
Select an ally, a REALTOR® who has your back
Real estate markets can be fast-paced, intricate, and can be challenging to navigate if you’re doing so on your own. Using a REALTOR® makes sense for so many reasons, especially when that is your trusted ally and only has your best interest at heart.
They cost you nothing
They will search through property listings while you work or play
They will drive your buying strategy
You are working with a local expert
They can help you navigate unique local property markets
REALTORS® have extensive negotiation skills and are best placed to represent you amongst competition from other buyers
They can support you with the seemingly endless paperwork!
We all love free advice, so as a buyer you are getting experienced industry professionals at no cost! Whats not to like? Select an ally that you can trust by reading reviews, asking for details of their service, and assessing whether their experience will compliment your goals.
Research property options
The cabin by the lake? The new build condo nestled in the heart of the action? There are key drivers that will influence you to build your list of options and we are experts in helping you define a clear strategy.
Location - where would you like to buy?
Type - what type of property are you looking for?
Price - what can you afford?
We will start by understanding how much value you place on each factor, this will allow us to draw up a clear plan and assess whether or not your goals are achievable.
In our opinion, location is the most important factor. For starters, you can’t move a home — at least not easily or inexpensively. When you prioritse location, we will make an in-depth assessment of its current and future potential. Making a smart location-based investment decision is often more likely to yield predictable results. History tells us that desirable areas retain value better in hard markets and future growth trends allow us to see which areas are ripe for development and growth. We will be able to help you find lifestyle benefitting areas that suit either approach to your long-term financial strategy.
Search for your property
Our favourite part of the journey is searching for a property that you will love. There are so many fun ways to do this, improved real estate technology allows real estate agents to market their properties far and wide and gives us the benefit of flying through options with the click of a button. Our favourite places to keep an eye on the market include:
The Internet
By far the best way to filter through a large amount of listings and information in a short period of time. For anything in the Okanagan region, our Lockhearts Okanagan Search website is the best tool for property searches on the market. You can set up your own personal profile and schedule alerts for when new listings meeting your criteria hit the market. You’ll never miss a beat!
Your REALTOR®
As your trusted ally, we will keep an ear to the ground on your behalf. We have unrestricted access to information, as well as a network that feeds us with listings before they even hit the public eye. Quite often we’ve been able to secure a property for a client that hasn’t been marketed yet!
Property Visits and Open Houses
However, the real fun happens when you view a property. It is so important to go and get a feel for the neighbourhood, the lot, and the property itself. Only then can you truly picture whether you can see yourself living there. Open houses are a great way to quickly view a diverse range of options to see what you feel comfortable with. We can accompany you if you wish, or help prepare you with a set of killer questions to ask so you don’t miss anything important.
Physical Media
Print media, magazines, even the classic for sale signs in the front yard. Real estate agents utilise every option when it comes to marketing. Public property listing feeds on the internet rarely contain every listing out there, sometimes using the good old methods can yield unexpected results!
Prepare and negotiate an offer
You have found the perfect home! Now it is time to prepare a water-tight offer that wins you the property. Rest assured, your REALTOR® ally will support you during the whole process. We know which buttons to push and how best to maximise your chances of securing the sale while protecting your interests. Common points of negotiation that we address might include;
Closing date and costs
Contingency finance
Warranties
Leaseback to the seller
Repairs for any damage or required updates
Furniture can be included in any deal
Appliances
Inspections
Building assessments
An offer can include conditions that protect either the buyer or seller. An offer without conditions is known as a firm or subject-free offer, these are a little more straightforward to deal with. The seller may accept your initial offer, reject your offer or present a counteroffer. The counter-offer may differ from your original offer in respect to price, conditions, closing date or any other terms.
Offers can be countered back and forth between the parties until one of you accepts or rejects, ending the negotiations. This is where we excel - in our 45 years of real estate we have seen it all and are experts in closing these deals out for our clients.
Remove subjects/conditions of purchase
Before a transaction can be finalised, the subjects (if included) will need to be removed from the offer. To remove the subjects, their conditions need to be met.
After an offer is made, a set period of time will be given to meet these conditions. This is the “subject removal period” and is typically given as seven days in BC. That means if your offer is approved on a Wednesday, you’ll have until the following Wednesday to remove the subjects.
How much work you need to get done in this time will obviously depend on how many subjects you’ve included in your offer.
For example, if you’ve included Subject to Financing and Subject to Inspection, you must secure the necessary financing and arrange for a professional inspection and report within the seven-day period.
Prepare for closing
The closing process is another part of the purchase that involves a few important steps. For your benefit, we’ve listed the key things out here.
Retain the services of a lawyer or notary
As soon as you have an accepted Contract of Purchase and Sale and have removed all subjects, it is important to hire a lawyer or notary. They will be required to handle some of the crucial steps in transferring the title over to you.
Confirm title to the property
Your lawyer or notary will need to gather information from you including how you wish to hold title to the property, especially if you are buying with your spouse, a partner, family member, or a colleague. It is important to understand the different types of title and how they affect you.
Secure additional information
The lawyer or notary will complete a title search and obtain all additional information that is required to complete the Statement of Adjustments. If you are registering a mortgage, your lawyer or notary will need to obtain an insurance binder with “loss payable” to your lender.
Lawyer or Notary prepares closing documents
Yes, more documents! Your lawyer or notary will prepare the final few documents required to close out the deal. These include things such as the title transfer, mortgage, property transfer tax forms and Statement of Adjustments. They will send the seller’s closing documents to the their lawyer or notary for completion.
Sign documents and transfer funds
Here’s where we hand over the cheque. Typically one to three days before we can close, you will meet with your lawyer or notary to sign the final documents and transfer funds for the purchase of the property. This is ideally handled via certified check, bank draft, or a secure inter-bank transfer.
Register your mortgage
Your lawyer or notary will register the transfer and mortgage documents, arrange for the seller’s lawyer or notary to pick up funds, and notify you that the purchase has completed.
Possession date, the keys are yours!
Typically you will recieve the keys from your REALTOR® - handing over keys to a buyer is one of the most joyous parts of our job. We’ll do this on the possession date agreed in the Contract of Purchase and Sale.
Load the truck and move in!
It is time to embark on the next chapter of your journey. Preparing to move into a home can be daunting, luckily we’re on hand to support you in this process too. Snoop around our website to find our top tips for moving in.
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