The prospect of owning your own home can be very exciting, especially for first time buyers. There is a lot of data to consider before entering the market. Before you contact a realtor or start searching the Multiple Listing Services® for Victoria, BC, it pays to understand what types of real estate are suitable for your unique situation. This page helps educate potential buyers on the many implications of home ownership.
According to Canada Mortgage and Housing Corporation (CMHC) guidelines, your monthly housing costs should not be more than about 35% of your gross monthly income. This includes costs such as mortgage payments, insurance, taxes, utilities and repair costs. Additionally, your entire monthly debt load should not be more than 42% of your gross monthly income in order to be deemed capable of servicing (paying) your debt load. The latter figure includes your mortgage payments and all your other debts.
For new prospective home buyers, it is advisable to get your finances in order and understand the limitations of any real estate purchases in terms of budget. You can easily find a Realtor® to help you prepare for this. You may want to read our webpage on how to find a good realtor.
If you are going to finance a real estate purchase, the first step is to get your finances in order. Before buying a home in Victoria, BC, it is important to debt load you can service and the amount of down payment you are able to afford.
The Canadian Mortgage and Housing Corporation (CMHC) also prescribes that a families entire monthly debt load should not be more than 42% of your gross monthly income, as noted above. Even though there are lenders who may be willing to do higher debt-to-income ratio lending, most experts would advise anyone to think very carefully about their overall debt load. Note that the income requirements are shared amongst all family members who will be purchasing real estate, not just applicable to the head income earner.
After a careful review of your financial position, you need to consider addition closing costs. When a home is purchased, there are several extra costs associated. Some of these are listed below.
After the basic finances are in order, the next steps will be to decide the type of home and neighbourhood you wish to purchase in. We have a very thorough page published about Victoria, BC Real Estate Statistics that should also be read to help you understand the major market trends.
Last but not least, finding a good realtor will be important. It may be best to select a realtor who has localized knowledge of the specific municipality within Victoria, BC Capital Regional District (CRD) as well as one who specializes in the type of dwelling you seek to purchase (examples - single family detached dwelling, condominium, vacant land, rural acreages etc).
There are many avenues to finance real estate purchases in Canada and almost all are available in the greater Victoria area. Typically, a mortgage is used to finance a real estate purchase. These come from financial institutions, albeit a wide range of types of institution. Chartered banks, credit unions and trust companies will all be competing to offer you a mortgage and finding the best deal will depend on many factors. These may include your credit rating, your net income and of course the general interest rates. Finding a good mortgage broker to discuss the particulars with is a good first step. In many cases, any real estate agent will likely have a few different contacts to share with you as it is in their best interests to see you finance a real estate transaction.
Choosing a realtor that works for you is a highly personal process. We have built an entire page on how to select a good realtor and outline many of the factors affecting your decision. Briefly, these can range from how well you mesh with them on a personal basis to specialized knowledge of a particular locale or type of property. Some realtors focus almost exclusively on one type of property such as luxury or high end real estate while others may focus on a specific geographical location like Oak Bay and only for condos.
We suggest you peruse the page how to select a good realtor for more on this topic.
Selecting a price range is not a decision to be taken lightly. When purchasing real estate, you need to strongly consider many factors. Are you the sole person responsible for servicing the costs of the property? Will you sub-let part of your real estate purchase to others who may then help you financially? Is your occupation stable and what are your future prospects for earning more money?
The Canada Mortgage and Housing Corporation (CMHC) guidelines will help you figure out the general price range in terms of costs of mortgage payments and your down payment requirements for the price range you are considering. While not written in stone, the guidelines are generally accepted as normal within the industry. Luckily the Victoria, BC real estate market offers choices ranging from a few hundred thousand dollars to tens of millions of dollars, meaning most people will be able to find a price range they can afford.
A neighbourhood is everything in real estate. The term "location, location and location" is often used to describe the three most important elements of home value. Victoria, BC has many neighbourhoods both within the Victoria proper area and amongst the municipal districts that comprise the Capital Regional District.
While at all not common prior to 2000, almost 100% of all real estate purchase decisions start with online research. Most real estate companies within the Victoria, BC area pool their listings into a common listing database called the Multiple Listing Service® or MLS® (see registered trademark notices at the bottom of the page) services. We have included a form on this website as a direct gateway to search the MLS®. From that page, you may search for Victoria, BC real estate as well as surrounding areas on Vancouver Island.
There are many costs that will arise for both buyers and sellers of real estate in the Victoria, BC market. Without limitation, here are some of the categories. The fees specified are estimates only and individual prices may vary for items.
Survey: $500 – $1,600. Any owner may request their property be surveyed at any time. it is most common as a practice to hire a surveyor when you're buying a home or constructing a new home on vacant land. A mortgage provider may require a property survey to make sure the property is in excess of the mortgage total they are providing to you to buy the house. Homeowner insurance providers may also request a survey if there is coubt to the value of the property.
Real estate surveys are not a strict legal requirement. Many financial institutions will be ok with mortgage title insurance. Proper surveys will likely require research into a property as well as a physical review. Survey items may include a history of easements, the deed, covenants against building as well as a a title search. The primary focus is to ensure there are no discrepancies about whom owns the land.
A formal property survey will include a legal description of the land that specifies exact measurements, and the regional districts official legal records. It normally includes the boundaries of the property and descriptions of buildings both upon the land and adjacent properties. It may optionally include notes of any upgrades or improvements a homeowner may be legally entitled to perform in accordance with appplicable real estate laws and both federal and local regulations.
Inspection Costs: $500 - $1,000. As with a survey, an inspection is usually in the buyers interest as it can reveal any discrepancies between the advertised details about real estate compared to the actual facts. An offer to purchase real estate may be made with "conditions" such as a home inspection, which allow the buyer to pull out of a real estate transaction if the inspection does not reveal favourable facts. In a "buyers market", if a seller receives multiple offers for a property within the same price range, they may be more reluctant to accept offers with conditions. At the very least, such conditions will generally be time limited in order to not limit the sellers options. A good real estate agent can help you navigate the best way forward.
Inspections in Victoria, BC will also likely include scans for underground, decommissioned heating-fuel storage tanks, septic systems (if applicable), water supply levels (if not on municipal water systems) and even drainage patterns.
If you have any questions, please use the contact link in the menu to reach us. We will add the information to this page or our blog page.