Transitioning from renter to homeowner can seem daunting, especially in a competitive real estate market with high interest rates and rising prices. However, with careful planning and an understanding of the key steps, this dream can become a reality. 

Here’s a comprehensive guide to help you navigate the process:

1. Hire the right professionals

The best way to succeed in entering the real estate market is to be well-prepared. Surround yourself with professionals, such as a real estate broker, a mortgage specialist, and a financial advisor. These experts will be able to advise you at different stages of your home-buying process, helping you define your available budget and the type of property you can afford. 

Working with a Royal LePage real estate professional offers you many advantages throughout the buying process. Your agent will give you the straight goods, guide and advise you every step of the way, and put you in touch with other key players, such as building inspectors, and legal and financial advisors. Their expertise and network can play a crucial role in bringing your real estate project to fruition.

2. Assess your financial situation

Analyze your borrowing capacity
Start by assessing your current financial situation. Calculate your income, expenses and debts to determine how much you can afford to borrow. Use online mortgage calculators to get an idea of your monthly payments under various scenarios.

Mortgage pre-qualification
Mortgage pre-qualification is a crucial step. It gives you a clear idea of how much you can borrow, and shows sellers that you’re a serious buyer. Contact several financial institutions to compare offers and find the best option for you. Your real estate agent can also refer you to mortgage partners.

3. Gather your down payment

Amount required
The minimum down payment in Canada is generally 5% of the purchase price for a property under $500,000. For properties between $500,000 and $1,000,000, you’ll need 5% on the first $500,000 and 10% on the remainder. For properties over $1,000,000, a minimum down payment of 20% is required although the Canadian government has announced as of Dec 15, 2024 this will be increasing to $1,500,000.

Mortgage loan insurance
If your down payment is less than 20%, you’ll need to take out mortgage loan insurance with Sagen, the Canada Mortgage and Housing Corporation (CMHC) or Canada Guaranty. Premiums for this insurance can reach 4% of your loan amount, and can be added to your mortgage.

Funding sources
Your down payment can come from a number of sources, including personal savings or a gift from family. Two federal programs are also available to help you raise this amount (see section 5 for details on the Home Buyers’ Plan (HBP) and the First Home Savings Account (FHSA). 

4. Plan for additional costs

Land transfer taxes
Land transfer taxes vary by province and municipality, and can add up to a considerable sum. Be sure to include this calculation in your budget.

The tax is calculated on the basis of the higher of the purchase price of the property, the sale price stated in the deed of transfer and the market value of the property at the time of transfer. Progressive rates are applied according to value brackets.

For example, in Quebec, more specifically in Montreal, the land transfer tax for a property valued at $700,000 would be $9,571. In Ontario, the tax is 1.5% for the first $55,000, 2% for amounts between $55,000 and $250,000, and so on. In Toronto, an additional municipal land transfer tax is also applied.

Transaction costs
Allow approximately 1.5% to 4% of the purchase price for transaction costs, including closing costs and legal fees, building inspection and prepaid adjustments.

5. Consider home ownership assistance programs

The federal government offers several financial programs to help Canadians enter the real estate market. 

• First-Time Home Buyers’ Tax Credit (HBTC): First-time homebuyers acquiring a qualifying home can claim a non-refundable tax credit of up to $1,500. The value of the HBTC is calculated by multiplying $10,000 by the lowest personal income tax rate. This credit can be claimed at the time of income tax filing following the purchase of your first property.

• Home Buyers’ Plan (HBP): The Home Buyers’ Plan (HBP) allows you to withdraw from your Registered Retirement Savings Plans (RRSPs) to buy or build a qualifying home. In its 2024 budget, the Government of Canada announced an increase to the withdrawal limit from $35,000 to $60,000.

• First Home Savings Account (FHSA): Launched by the Government of Canada in April 2023, this program allows you to save up to $40,000 tax-free for the purchase of your first home. The FHSA combines elements of a Tax-Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP), allowing users to make tax-deductible contributions and tax-free withdrawals from the account.

6. Find your dream home

Research and visits
These days, everyone can do their own property searches online, but your real estate agent has more precise research tools, as well as a thorough knowledge of their local market. This gives you an advantage, since they’ll be able to advise you by matching your needs to the right neighbourhood, and to the ideal property for you. During visits, they’ll be able to offer observations on the property’s condition and spot potential problems, even before the building inspection.

Make an offer
Once you’ve identified your ideal home, your real estate professional will help you draw up a competitive purchase offer that takes into account your deadlines, budget and financing or inspection conditions. They will represent you to the sellers and advise you on negotiating and presenting a counter-offer, if necessary.

7. Finalize your first home purchase

Home inspection
A thorough inspection of the property by a certified professional can reveal issues not visible to the naked eye, such as structural problems, water damage, electrical or plumbing concerns, and termite or other pest infestations. Knowing about these issues in advance allows you to make an informed decision. What’s more, you may be able to ask the seller to make repairs based on the inspection report as a condition of the sale.

Obtaining final financing
To obtain a mortgage, you’ll need to provide detailed financial documentation to your lender. This includes your bank statements, pay stubs, notices of assessment, and any other information on your debts and assets.

Buying a home in a complex real estate market requires preparation and perseverance. By following these key steps, you can move from renter to homeowner with confidence. Consult a real estate professional to guide you through the process.

We wish you every success on your path to home ownership!

Preparing your home for winter can be a daunting task. Starting early and taking time between jobs will make it much more manageable.

Your efforts will keep out the cold, keep money in your pocket through energy savings and keep your home running efficiently.

Here are six ways to winterize your home this season.

Maintain furnace and appliances

Having your furnace and ventilation system serviced by a professional in the fall can prevent potential emergency calls when the temperature drops. 

For improved air quality throughout your home, have your ducts cleaned annually before the onset of cold weather. Outdoor air conditioning units should be covered properly and their power disconnected during the off-season. While you’re at it, cover any lawn furniture or landscaping that will be exposed to the elements.

Conduct a thorough inspection on your yard tools too – drain fuel from your lawn mower and water from your pressure washer, and complete a maintenance check on your snowblower. This will prolong their lifespan and ensure they work efficiently when you need them. If you heat your home with wood, oil or propane, be sure to top up your supply before the cold months hit.

Seal windows, doors, decks and concrete

If the caulking or weather stripping around your windows and doors is cracked, it can let cold air and moisture in, damaging window sills while causing mildew, mold and significant heat loss. Repair and replace what is necessary and cover older windows with a protective window film until they can be replaced.

Decks, driveways and concrete surfaces are not impermeable. Purchase proper sealants or stains that you can apply yourself before ice and snow arrives, or hire a professional. Preserving the integrity of these large surfaces will only serve you in the long run, saving you from major repairs or full replacements.

Outside water

Before draining your pipes, disconnecting hoses or winterizing your  sprinkler system, always turn off the outside water supply. Leaving the outside water on during winter can cause pipes to burst, leading to flooding and damage to your property. If you haven’t already, you may want to consider insulating your water pipes, especially if you leave a summer home unattended off-season or vacation for extended periods of time in the winter months.

Check your gutters

Make sure the gutters are in good condition and properly secured to your home. Prevent damage by clearing out debris to allow snow to melt and drain easily, and point the downspout away from your home. Water should always be moving away from your property to avoid flooding and water damage.

Gutter guards are a worthy investment, as they can help to keep debris and pests out. Clogged gutters can result in leaks that lead to mold and mildew, and act as a breeding ground for mosquitoes and bacteria.

Tend to the attic

Pests can cause damage to your home and your health. Safeguard your attic from birds and rodents who may move in during the winter by checking for access points and placing a screen under any vent. Contact pest control if you suspect an infestation.

To keep warm air from escaping through your roof, determine the R-Value of your current attic insulation and add more to areas not properly insulated, or completely replace the insulation if needed. For added warmth and energy efficiency, you can add insulation to your garage doors and basement.

Inspect your smoke detectors

This important task is not limited to just one season… Inspect your smoke and carbon monoxide detectors replacing batteries and cleaning them when necessary. Smart home devices can be installed to continuously monitor smoke detectors (and much more), providing added peace of mind.

If some of these tasks are not within your skillset or you simply don’t have the time, hire a general contractor for the small jobs and a certified technician for specialized tasks, such as inspecting the furnace.

With active inventories hitting levels not seen in 10 years and sales 30 per cent below the 10-year average, Fraser Valley real estate is building towards a buyer’s market if sales continue to lag.

The Fraser Valley Real Estate Board recorded 982 sales in September, down by 8% over August and by more than 10% over September 2023. Again, seasonally adjusted sales were the second slowest in a decade in the Fraser Valley.

With three rate cuts already and more expected before the end of the year, buyers are watching the market closely to time their purchasing decisions. The current conditions should favour buyers, particularly in the detached market, however until we start to see some movement in asking prices, properties will continue to sit on the market for extended periods as both buyers and sellers await the next rate announcement.”

New listings rose in September, up 21% to 3,352, an increase of 17% year-over-year. Overall inventory increased 5% from August to September to 9,045, up 39% over last year. The combination of declining sales and rising inventories has helped to create balanced, and in some cases, buyers’, market conditions in the Fraser Valley.

Buyers want to get into the market but many also need to sell before they can buy. When you factor in affordability challenges and the anticipation of more interest rate cuts, we are seeing persistent weakness in the market. In conditions like these, we encourage buyers and sellers alike to talk to their REALTOR® to assess the risks and opportunities before making a decision.

Across the Fraser Valley in September, the average number of days to sell a single-family detached home was 35, while for a condo it was 37. Townhomes took, on average, 30 days to sell.

 Benchmark prices in the Fraser Valley dipped again in September, with the composite Benchmark price down 1.4% to $978,800.

These are averages of all of the areas within the Fraser Valley together but for a more detailed report on your specific sub area market conditions, contact me for a copy.