First time home buyer tips pls..

[redi2roc]

Hey guys Im a first time home buyer; I need abit of advice on where to start to understand the process of purchasing a new home. Are there any books or websites I can visit to put all the terms in plain english? I prefer stuff like that so the whole process can be digested easily as possible. Thanks in advance guys. Hope all goes well hehe

[Diamondog]

Go to a mortgage seminar, PC has a pretty good one I'm sure all the banks put them on.....they talk about their mortgages obviously but they also bring in a lawyer to talk about those types of things, the different fee's etc...also they brought in a house inspector to give you his pitch and show what types of things they check for....it's all good information to know and hear about.

[Jucius Maximus]

When you are buying a home, virtually everyone you meet from your real estate agent to the seller to the bank is personally invested in screwing you over. I just bought my first place last year and this is definitely true.

Check it out (http://www.violentacres.com/archives/122/when-it-comes-to-money-dont-play-nice).

[Frankie3s]

Hey guys Im a first time home buyer; I need abit of advice on where to start to understand the process of purchasing a new home. Are there any books or websites I can visit to put all the terms in plain english? I prefer stuff like that so the whole process can be digested easily as possible. Thanks in advance guys. Hope all goes well hehe

A simple piece of advice: whether it is a new or old home everything is negotiable. Don't listen to what people will tell you about negotiating. Sometimes you can negotiate the money or what's included instead. If it's a new home and you are a first time home buyer, make sure you get the GST rebate and the builder doesn't swipe it from you (even if they say the rebate is already deducted from the price which is a lie). Happens almost all the time.

[Jucius Maximus]

If it's a new home and you are a first time home buyer, make sure you get the GST rebate and the builder doesn't swipe it from you (even if they say the rebate is already deducted from the price which is a lie). Happens almost all the time.
How do you determine whether or not you got the GST rebate?

I am kind of wondering now because I did get some mail from the CCRA indicating that my rebate was 'provisionally approved in full' and was paid or credited to me by the builder at the time of purchase.

Looking at the final closing statement of adjustments from the lawyers, I see that amounted listed twice under the following two headings:
GST REBATE - Credit Vendor
GST - ASSIGNED TO VENDOR - Credit Purchaser

So it is listed on both sides of that balance sheet, so they cancel each other out. I don't understand this.

[nerd]

Funny, I'm working on a site about this right now.

[Jucius Maximus]

How do you determine whether or not you got the GST rebate?

Hm... time to answer my own question.

I found a clauses in the APS (agreement of purchase & sale) indicating:
1) GST is included in the purchase price, so I did not have to pay GST on top of everything else
2) I have to assign the value of the GST rebate to the vendor.
3) As per federal law, GST rebates don't apply to condos purchased for rental purposes. If the place is purchased for the purpose of renting, you have to pay the balance of GST rebates not received to the vendor.

Considering item #3 here, I think that means that they "discounted" the price of the condo units to take into account the GST rebate. Actually, now that I think about it, the lawyers did tell me something to that effect. If the rebate was not accounted for in the purchase price, the developer would not want you to pay for the lack of rebate from rental units. So I think that even though I didn't receive the rebate directly, I still received the benefit of that money.


And this brings up another point that can be very helpful with home puchases: Scan all your documents! This becomes very helpful when you need to go through your mountains of paperwork really quickly. Also it will be helpful at tax time when you are looking for moving expenses to deduct.

My scanner has an ADF (automated document feeder) that automatically feeds documents through page-by-page. So I can just tell Adobe Acrobat to scan whole legal documents into PDFs without manually inserting each page.

[philelmo]

Not sure if this is up to date, but it's close

The federal government provides a rebate program for GST applicable to new residential housing, as follows:
1. Purchase Price (net of GST) less than or equal to $350,000 a 36% rebate applies (net effective GST of 3.84%)
2. Purchase Price (net of GST) is greater than $350,000 but less than $450,000 the full 36% rebate (results in net effective GST of 3.84%) is adjusted on a sliding scale. BC Assessment Policy –Valuation – GST Page 1 of 7
Policy, Audit & Legal Services Division Last updated July 24, 2006
BC Assessment Policy –Valuation – Treatment of GST Page 2 of 7
Policy, Audit & Legal Services Division Last updated July 24, 2006
The formula for the adjusted rebate is:
(($450,000- Purchase Price)/$100,000)(36% GST rebate) = net effective rebate
The full amount of GST (6%) is applicable on all housing over $450,000.

[Frankie3s]

How do you determine whether or not you got the GST rebate?

I am kind of wondering now because I did get some mail from the CCRA indicating that my rebate was 'provisionally approved in full' and was paid or credited to me by the builder at the time of purchase.

Looking at the final closing statement of adjustments from the lawyers, I see that amounted listed twice under the following two headings:
GST REBATE - Credit Vendor
GST - ASSIGNED TO VENDOR - Credit Purchaser

So it is listed on both sides of that balance sheet, so they cancel each other out. I don't understand this.

Sadly most builders end up getting this as free money. It is mean't to give first time home buyers a break on the GST but you'll notice that they didn't discount the house price by this amount and you paid the same amount as the next person who is not a first time home buyer.

You've got to be really sharp or have a damn good lawyer to catch this before continuing forward with the agreement of purchase and sale and have this amount deducted from the home sale price. Some builders will refuse to sell you the home if you won't let them keep the money without discounting the sale price.

[Frankie3s]

If the rebate was not accounted for in the purchase price, the developer would not want you to pay for the lack of rebate from rental units.

What do you mean by lack of rebate from rental units? Can you elaborate please?

[akeogh]

I'm pretty sure that you can get the 1% GST reduction back if you bought a house before the reduction last year and the property closes after the reduction took effect. There is apparently a form that you have to fill out.

[grant]

When you are buying a home, virtually everyone you meet from your real estate agent to the seller to the bank is personally invested in screwing you over. I just bought my first place last year and this is definitely true.
This situation is not true in canada as mortgage brokers are typically paid based on volume, not on the rates they obtain.

While there may be some incentive for the people you hire to "screw you over" (just like there is for any situation in life, not just home buying) in my experience those people you mentioned are mostly honest. (their competence is another story)

Nonetheless, it does behoove you to be skeptical of everything these people tell you. e.g., you don't trust a realtor or a seller to accurately disclose the condition of the property.. you only trust your own eyes or the accredited home inspector.

What i'm curious about in your link is why switching "finance guys" would cost $17,000. Obviously i have no experience with U.S. real estate but here in canada:
1) you obtain your financing commitments well in advance of the close, not the day-of.
2) an average person can get a regular mortgage in just a few days

[redi2roc]

Thank you guys! for all your help Now on the Seminars WOuld I just walk into a PC financial place and get Literature on when and where these seminars take place? Are they very frequent? IM learning alot from you guys RIght now IM not gonna get a brand new home PRobably a used home hehe any more advice is MORE than welcome thanks AGAIN please keep the thread going as I learn from you experienced purchasers :)

[glacier76]

I was just doing some shopping at Superstore and there was a sign next to the bank machine about some seminar. So, they do post it when they have one. Just stop by a store when you have the time.

[jande9]

Find a good home inspector. Don't go for the one that the agent recommends necessarily, as the agent probably likes ones that are not so picky. You want a picky one. Ed Witzke here in GVA is good but expensive. The agents hate him. What usually happens is that he points out all the problems, and if they are not too bad you buy the house anyways, but with a really good idea what you will need to do to maintain it.

Know what you are buying. Anything attached to the house is part of the sale. So curtain rods go with the house, but not the curtains. Often kitchen appliances are thrown in but that needs to be negotiated. Mirror clips, but not the mirrors, if the seller is an >.<

You need to do your homework because you are all alone. Your agent is really working for the seller, because the seller is paying her. Your agent is not working for you. She is obliged to extract the highest price she possible can from you. It is one against three, you being the one and the seller, his agent, and your agent being the three. This is not really a big deal as long as you understand what is going on. Don't divulge your maximum price to your agent, but only give her a vague idea what you can afford. Your agent will be helpful driving you around but be prepared to make your own decisions about how much to offer.

So do your homework. Decide what your "must haves" are and what items are not so important. Does it have to be new, or does it have to be heritage. Lots of land, or no land and lots of house? Does it need to be near a favourite school, or a transit route, or a recreational area. How many bedrooms. Mortgage helper, or place to put one in?

See what similar houses to what you want are selling for. Get your finances in order so you know exactly how much you can afford. Know your maximum mortgage, your down payment, your grannie grants, so when the right place comes up you will be in a position to make an offer. Your agent will give you an idea about closing costs.

And remember that location means a lot. Not just meaning being in a good area, but meaning whereabouts in that good area. Being close to a busy and noisy road is less desirable. Being next to a big building that steals your afternoon sun is less desirable, or next to a 7-11 or a gas station. Most people like being on the south side of the street so they have a sunny back yard.

You will find that an active market with a lot of anxious to buy people will bring out the worst crappy properties that will not sell for very much in a normal market. Beware of these places. Orphan lots with rundown houses on busy streets may look affordable now so you may be tempted to buy and fix up, but you may be stuck with a dog that you may find impossible to sell in the future.

Remember, every place has something wrong with it, no place will be perfect. Go to lots of opens, learn about pricing, learn about location, and don't feel pressured to buy something you have real doubts about. Especially now. Prices are high so now is a dangerous time to jump in the market.

[Frankie3s]

Find a good home inspector. Don't go for the one that the agent recommends necessarily, as the agent probably likes ones that are not so picky. You want a picky one. Ed Witzke here in GVA is good but expensive. The agents hate him. What usually happens is that he points out all the problems, and if they are not too bad you buy the house anyways, but with a really good idea what you will need to do to maintain it.

Know what you are buying. Anything attached to the house is part of the sale. So curtain rods go with the house, but not the curtains. Often kitchen appliances are thrown in but that needs to be negotiated. Mirror clips, but not the mirrors, if the seller is an >.<

You need to do your homework because you are all alone. Your agent is really working for the seller, because the seller is paying her. Your agent is not working for you. She is obliged to extract the highest price she possible can from you. It is one against three, you being the one and the seller, his agent, and your agent being the three. This is not really a big deal as long as you understand what is going on. Don't divulge your maximum price to your agent, but only give her a vague idea what you can afford. Your agent will be helpful driving you around but be prepared to make your own decisions about how much to offer.

So do your homework. Decide what your "must haves" are and what items are not so important. Does it have to be new, or does it have to be heritage. Lots of land, or no land and lots of house? Does it need to be near a favourite school, or a transit route, or a recreational area. How many bedrooms. Mortgage helper, or place to put one in?

See what similar houses to what you want are selling for. Get your finances in order so you know exactly how much you can afford. Know your maximum mortgage, your down payment, your grannie grants, so when the right place comes up you will be in a position to make an offer. Your agent will give you an idea about closing costs.

And remember that location means a lot. Not just meaning being in a good area, but meaning whereabouts in that good area. Being close to a busy and noisy road is less desirable. Being next to a big building that steals your afternoon sun is less desirable, or next to a 7-11 or a gas station. Most people like being on the south side of the street so they have a sunny back yard.

You will find that an active market with a lot of anxious to buy people will bring out the worst crappy properties that will not sell for very much in a normal market. Beware of these places. Orphan lots with rundown houses on busy streets may look affordable now so you may be tempted to buy and fix up, but you may be stuck with a dog that you may find impossible to sell in the future.

Remember, every place has something wrong with it, no place will be perfect. Go to lots of opens, learn about pricing, learn about location, and don't feel pressured to buy something you have real doubts about. Especially now. Prices are high so now is a dangerous time to jump in the market.

Very good advice especially the last paragraph two paragraphs.

[Jucius Maximus]

What do you mean by lack of rebate from rental units? Can you elaborate please?
I had forgotten about this thread for a while. Sorry about the delay in my response.

What I mean is this:
1. It is true that first time home buyers will normally get a GST rebate
2. Homes purchased for rental purposes don't receive a GST rebate

So if a first time home buyer bought their first propery for the purpose of renting it out, they will not receive a GST rebate even though it is their first time.

What I'm saying is that if the price of the home did not take into account the amount of the GST rebate, then the seller wouldn't care whether or not you gave them your rebate money. Since they do care and they want you to turn over the money that rental properties would have gotten, I think it means that they therefore do discount the GST rebate from the purchase price.

Actually I think that makes sense, because why would a builder want to increase their price higher, forcing the customer to take out a larger mortgage, only to then get a GST discount when their mortgage is probably closed? It increases the cost of buying a new home and probably scares off buyers and reduces sales. So just discount the GST rebate amount from the purchase price and let the builder keep the rebate when it comes. Works better for the buyer because it reduces their mortgage principle and is better for the builder because it reduces their price tags.

[Bmp5]

When you are buying a home, virtually everyone you meet from your real estate agent to the seller to the bank is personally invested in screwing you over. I just bought my first place last year and this is definitely true.

Check it out (http://www.violentacres.com/archives/122/when-it-comes-to-money-dont-play-nice).

That is so true

[glacier76]

What I mean is this:
1. It is true that first time home buyers will normally get a GST rebate
2. Homes purchased for rental purposes don't receive a GST rebate


1. Not true. GST rebates has nothing to do with how many homes you've purchased. As long as the property is below a certain price and it's gonna be your principal residence, you're eligible for the following rebate:

http://www.cra-arc.gc.ca/E/pbg/gf/gst190/README.html

2. People who are buying for rental purposes can receive the following GST rebate:

http://www.cra-arc.gc.ca/E/pub/gp/rc4231/README.html

But you only pay GST if you're buying a brand new property. Generally, if you buy a "used" property, you don't need to worry about GST.