BC Notaries First-Time Home Buyers Tips for
Busy Spring Market
2014 Spring Real Estate Market Stronger Than Last Year
Vancouver, BC – BC Notaries throughout B.C. have been experiencing a strong Spring market; particularly in Vancouver, Victoria, and in resource-based towns including Kitimat and Fort St. John.
Busy housing markets and low interest rates attract first-time home buyers keen to enter the market. These aspiring new homeowners—whether they’re young couples, singles, or families—often ask Notaries for trusted guidance on their important purchase.
BC Notaries provide conveyancing and other real estate-related services to many BC home buyers and sellers. Spring is a particularly busy season for those services.
The BC Real Estate Association has reported the total dollar volume in home sales has increased 19% in April 2014 year-over-year, while volume is up 12%, and is forecasting a 5.2 percent increase in the number of homes sold in 2014, and further 6.7% in 2015.
“There are a few things that have influenced strong real estate sales in addition to lower interest rates,” says Akash Sablok, President, Society of Notaries Public of BC and a Notary Public in East Vancouver. “Changes to the property transfer tax exemption limit and to mortgage loan insurance premiums also had first-time buyers rushing to complete purchases last month. As Notaries, we ensure that nothing is missed when buyers are urgently trying to close on purchases.”
Tips for First-Time Home Buyers
- Obtain pre-approval for a mortgage before setting a price range and remember that if your circumstances change, such as changing jobs, so might your eligibility.
- If your family is providing a loan or other assistance, make sure you’ve considered all the possible implications and outcomes to avoid confusion or conflict later on, with the help of a legal professional such as a Notary.
- Develop a costing sheet that anticipates all related costs in addition to the cost of the home itself. Ask the various professionals with whom you are working to review it for you, including your realtor, mortgage broker or lender, Notary, and mover. Then allow an extra $1’000 for unexpected expenses.
- Allow for fees for transfer of utilities. Make sure you understand which municipal taxes and other fees will come due—and when.
- When making an offer on a home, include subjects (requirements that must be met to proceed with the purchase) and realistic time frames that will allow you to ensure you have financing in place, have the home inspected, and have time to review strata council meeting minutes, if applicable.
- Always have the home inspected by a professional before finalizing the purchase. While sellers are required to disclose any major problems, that doesn’t always happen. Buyer beware!
- To find out if you qualify for a First Time Home Buyers’ Tax Exemption, check the Province of British Columbia website.
- Don’t lock into a mortgage term for longer than you think you will own your new home. For example, if you plan to own it for 2 years, don’t take out a 5-year mortgage. The penalties for discharging a mortgage early can be quite costly.
- If buying into a strata property, it is important to carefully review the last 2 years’ strata council minutes. Ensure you can live with existing rules and bylaws, particularly those related to pets, parking, smoking, and noise.
- If you’re buying with a spouse or partner, make sure you understand the considerations around shared ownership and make a decision that will work best for you in the long run. Your Notary can help you with the details.
“Buying your first home is a very exciting personal milestone,” said Kristy Martin, a Notary Public in Victoria. “It’s natural to be more interested in square footage, layout, and location than in conveyancing, insurance, and strata regulations. That’s why it’s so important to work with a legal professional who is qualified and experienced to protect and secure this important purchase.”
“In Vancouver, thanks to lower interest rates and an increase to the exemption limit for the Property Transfer Tax, we saw an increase in first-time home buyers purchasing in April and that trend seems to be continuing this month,” says David Watts, Vancouver Notary Public. “As Notaries, we provide professional legal guidance on the purchase or sale of a home.”
Recent Changes to Real Estate Buying and Selling
In February 2014, the BC Government increased the threshold of the First-Time Home Buyers’ Exemption to $475,000 from $425,000. At the top end, this saves first-time home buyers $7500 by not paying the Property Transfer Tax (PPT).
At the beginning of this month, Canada Mortgage and Housing Corporation (CMHC) increased its homeowner mortgage loan insurance premiums. The increase applies to mortgage loan insurance premiums for owner-occupied, self-employed, and 1-to-4 unit rental properties, including low-ratio refinance premiums. According to CMHC, on average that will result in a $5 increase in owners’ monthly mortgage payments. That means the premium for 95% financing increases from 2.75% to 3.15%. For a more standard 75% loan-to-value ratio, the premium increases to 0.75% versus the previous 0.65%.
“This Spring’s low mortgage rates coupled with the higher threshold for being exempt from the PPT offsets the small increase in homeowner mortgage loan insurance premiums,” says Watts.
About BC Notaries
The Society of Notaries Public of BC represents more than 320 highly trained Notary professionals. Most have locally owned and operated offices and all provide personal assistance to clients around the province. Individuals, families, and businesses seek the services of BC Notaries for a wide range of non-contentious legal matters including Residential and Commercial Real Estate Transfers, Mortgage Refinancing, Wills and Advance Health Care Planning, Powers of Attorney, and other important documents.
The Notary’s Tradition of Trust spans 2000 years. Notaries first came to British Columbia over 100 years ago. They continue to serve their valued clients and their communities across the province. For more information, please visit www.notaries.bc.ca.
Editors: Local Notaries are available in many areas of BC to talk about what first-time home buyers should consider when purchasing their first home.
Karen Cook Brenda Jones
604 551-9074 604-312-1070