First Time Home Buyer

[bkoz]

Some of you may have noticed I started the "moving to Kamloops" thread.

I am looking at buying my first house there.

Does anybody have some first time buyers advice? What about some good resources to learn some more about the process?

Be forewarned that I in no way take responsibility for the housing market crash that will inevitability happen the day after I sign the papers.

[connor]

Ask DaveM about finding a Realtor with a good rep..

[Geologyboy]

Purchasing a house has two speeds, very slow and then super fast. Just be prepared for how quick things will move once you find a place to make an offer on. If you have a friend who knows anything about building houses, have them do a casual inspection on top of your paid home inspection. They will probably notice very different things. Also good luck!

[Lady Gravity]

one thing i learned - if you're buying a place that's been a rental, write something into the contract that it has to be in the same condition as when you inspected it to purchase. i had a 2 month delay between closing and moving in, and the condition had dramatically changed.

[MikeO]

Get your finances sorted out before you even start seriously looking. I'd likely suggest using a mortgage broker over your bank unless you have a great realtionship with your bank. Shop around and spend some time looking into it but most times mortgage brokers will get you the best interest rates.

Get a handle on what exactly your costs are when buying. Property transfer tax (you're exempt as a first time up buyer up to $425K), mortgage insurance costs if you don't have 20% of the purchase price to put down (5% minimum downpayment), inspection costs (shouldn't exceed $500 in Kelowna), surveys (if needed), etc. It's better not to have any surprises in the end. Buying a house is stressful enough.

As I first time buyer you won't pay property transfer tax up to a $425,000 purchase price. There's a partial exemption if the price falls between $425-$450K. It's not much but every little bit helps. If you weren't exempt you would have to pay 1% on the first $100K and 2% on the balance. You pay this on the buying side only.

Stay away from buying new if possible to avoid the HST. There are HST rebates available but you're still better off buy a home that doesn't invole HST.

Try and find a realtor through a referral. Even better, if you can get a couple different referrals, go for coffee with each of them and see who you relate to better and see who would be the best fit for your needs.

There's a lot to know about different tax credits and incentives as well.

Get educated and have fun! Good luck!!

[Tmack]

Also if you have any RRSP's you can withdrawal them tax free and pay them back over 15 years. Kind of nice to have access to that money if needed.

[DarylMac]

If I was in your shoes and moving from Edmonton to Kamloops I would probably try and rent for the first 6 months to a year just so I'd have a better understanding of the neighbourhoods and get a better idea of where I want to live.

Buying your first house is cheap in comparison to any subsequent real estate purchases.

[HIBuLlitT]

Originally Posted by Geologyboy

Purchasing a house has two speeds, very slow and then super fast. Just be prepared for how quick things will move once you find a place to make an offer on. If you have a friend who knows anything about building houses, have them do a casual inspection on top of your paid home inspection. They will probably notice very different things. Also good luck!

This can't be stressed enough. All the other crap is pretty easy and straight forward IMO...
interest rates, house prices, what you can afford and such.
But, you get a house that has an issue you may not know about it till you go to sell and
they new buyers are smart enough to hire their own inspector. DON'T ask you agent to get
an inspector for you. A good inspector is more important than a good RE agent. While I
haven't been screwed yet, there were some things I've found in my present house that I
would have been a bargaining chip when making an offer, or reducing the price on the offer
I originally made.

Your house will cost you at least $200,000 (probably closer to $400K), spending $200-
300 for a proper inspector is nothing. If he/she finds a major issue or even a minor
one that would make you not want the house, it's worth it.

Remember a inspector that is hired by a RE agent is working for the agent (for all intents
and purposes). Basically an inspector that finds a lot of issues will not be hired by
that agent again, and if he makes a habit out of it, no agent will hire them.

Remember your agent wants to sell you a house, they want to make a sale. They really
don't care about saving you money, just giving you the "perception" that they did.
Do your own research...mls.ca is a good place to start. Look at what people are asking
and what kind of houses they're asking. Make your offers accordingly. Read freakanomics
to give you a better idea of RE agents incentives and motives. They're not malicious
just greed driven.
The less you pay, the less they make.

The average person will spend more time researching ski's or a new phone than they do
a house purchase. It's seems so overwhelming most people put all their faith in their
RE agent and think he/she will do everything to help them. While most RE agents aren't
as greasy as car salesmen, their motives and incentives are.

[Poz]

A year ago I was in a very similar situation as you are now, except with kelowna.

I cannot stress enough how much I recommend renting first, you don't know the neighborhoods yet and renting is a cheap way to find out. We lucked out when we rented and ended up in a great neighborhood, we had no idea it was at first though. We bought 8 months later last November and actually ended up buying across the road from the apartment we were renting. We luckily had an open lease on our rental so we didn't have to break it and lose cash, regardless I would gladly give up a couple months rent just to get to know the area before investing heavily into it.

Buying a place is a big deal and I personally feel i wouldn't give it the attention needed if I factored in moving to a new community at exactly the same time. As already stated things move pretty slow at first but then BAM! One day you wake up and the ball is rolling down the hill pretty fast and then you have the keys to your new digs.

[Norman]

Originally Posted by Tmack

Also if you have any RRSP's you can withdrawal them tax free and pay them back over 15 years. Kind of nice to have access to that money if needed.

With interest rates the way they are now, that's not a good idea.

Taking away from your retirement at say 7% so you pay less on a mortgage at 4% is silly.

[gooch]

Originally Posted by Norman

With interest rates the way they are now, that's not a good idea.

Taking away from your retirement at say 7% so you pay less on a mortgage at 4% is silly.

^ good advice, there are 10 years out there at 3.99% right now, killer deal

[heckler]

Originally Posted by Poz

I cannot stress enough how much I recommend renting first

I totally agree, having moved across the country, not even knowing there were bike trails on the North Shore. Imagine how different life would be had I bought a place in ditchmond just to be close to the (now) temporary job I had. I'm so glad to have rented on the shore and realized the price was worth paying.

[in_a_bath]

Originally Posted by Poz

I cannot stress enough how much I recommend renting first, you don't know the neighborhoods yet and renting is a cheap way to find out.

This is gold. It is really easy to rationalize what makes a new place great and what won't make it suck as a place to live. Especially when you are moving somewhere new.

I rented in Burnaby when I first moved to Vancouver and ended up spending my entire life on the Skytrain trying to get places because, while it was cheaper than the city, it was not near anything I wanted to do.

[Tmack]

Originally Posted by Norman

With interest rates the way they are now, that's not a good idea.

Taking away from your retirement at say 7% so you pay less on a mortgage at 4% is silly.

I was more talking about having extra cash for the 'oh yeah by the way's' that come with buying property, (lawyer fees etc.)

[KenN]

Originally Posted by MikeO

Stay away from buying new if possible to avoid the HST. There are HST rebates available but you're still better off buy a home that doesn't invole HST.

You are aware, aren't you, that the new rates for new housing HST rebate came into effect on April 1? This takes a lot of the sting out of the HST.

Also, when buying a newly built home, you can write the offer so that the offered price is inclusive of HST so that you control exactly what is paid. Whether the buyer or the builder then gets the HST rebate is a point of negotiation.


Kn.