Once your offer is accepted, there are a number of steps that need to be taken before you complete the transaction, close the sale, and take possession of your new home. Most importantly, you will need to arrange for financing and remove all conditions and clauses. The sale may also be subject to a satisfactory home inspection. Your Rennie Sales Associate can help explain these details to help ensure a smooth completion. This is especially helpful if you are a first-time buyer.
You will need to arrange payment of your deposit as outlined in the Contract of Purchase and Sale. These funds will held in trust until the completion date.
Now is the time to finalize your mortgage requirements. Meet with your lender and provide a copy of the Contract of Purchase and Sale. Attend to any conditions promptly, such as arranging an appraisal of the property value, if that is a condition of financing or sale.
Tip: The Home Buyer Plan or HBP allows you to withdraw up to CAD $20,000 from your Registered Retirement Savings Plan or RRSP to purchase or build your own home. If this is of interest to you, please consult with your financial advisor for more details on HBP when you discuss your mortgage requirements.
As the buyer, you must be satisfied and remove any relevant conditions and subject clauses that were written into the Contract of Purchase and Sale by the stated date or the contract may terminate. This might include arranging a home inspection, obtaining financing or approving condo strata minutes.
While not mandatory, home inspections are usually written into a buyer’s offer as a subject to the sale. An inspection enables you to make a more informed decision about the condition of your purchase and is therefore highly recommended.
To protect your investment, purchase home or condominium content insurance in advance and be sure that the policy will take effect on the completion date.
Once you have selected a lawyer or notary, your Rennie Sales Associate will provide them with a copy of the signed Contract of Purchase and Sale. A few days prior to the completion date, arrange to meet with your lawyer or notary to sign the necessary paperwork.
On completion day, the following will take place:
On completion day, bring the following to the office of your notary or lawyer:
Tip: Your Rennie Sales Associate can accompany you on completion day. This is especially helpful is you are a first-time home buyer.
Congratulations, now you can move in. On possession day, your Rennie Sales Associate will arrange to pick up the keys and meet you at your property. We will do a final inspection of the property and then you may begin moving in. Prior to your move in day you will want to review our move in guide, to ensure you have covered all your bases.
The fees that a buyer must pay at completion are known as closing costs and may include any or all of the following:
Adjustments are costs that the buyer incurs to reimburse the seller at the time of possession of the home. Costs might include property taxes (if prepaid; for the portion of the year you will assume ownership), utilities, strata fees and ongoing service contracts. On the adjustment date, as determined in the Contract of Purchase and Sale, the buyer credits the seller by paying the agreed-to amount in full.
Tip: If you are purchasing a condominium, your new strata corporation might charge a fee anytime you move in or out of your unit. Fees generally range from $50 to $100 for each move. Please refer to the strata bylaws for more information.
If your lender requires an appraisal of the home, prior to approving your mortgage, you may need to arrange and pay for a professional appraisal of the property. Appraisal fees vary from $200 and up.
Goods and Services Tax or GST is payable on the purchase of a new or substantially renovated home. The amount payable is 5% of the purchase price of the property
Please note: the New Housing Rebate will reduce the total amount of GST payable by 36% if you intend to make your new home your primary residence along with satisfying these requirements:
The net amount of GST payable is due at the time of closing.
The Residential Rental Property Rebate will also reduce the amount of GST payable by 36% if you intend to rent your property to tenants in addition to satisfying the following requirements:
You can apply for the Residential Rental Property Rebate after the full amount of GST is paid at closing. In addition, supporting documents will be required which include the Statement of Adjustments, Contract of Purchase and Sale, lease agreement and insurance policy.
The New Housing Rebate and the Residential Rental Property Rebate are not available if the purchase price of the property is $450,000 or more.
The above information is subject to change at any time. For full details visit Canada Revenue Agency.
A home inspection is an important detail to take care of before closing on a new or resale property. Arrange to have your new home inspected by a certified home inspector in order to make a more informed decision on the quality of your purchase and protect your investment. Allow 2-5 hours for a home inspection and budget from $350 and up, depending on the size and nature of the property.
Prior to completion, it’s important to arrange for adequate and appropriate home and content insurance to protect your investment. Consult with your Rennie Sales Associate and/or your Lender in advance to understand what you require. There are various types of insurance to consider:
When you hire a lawyer or notary to assist with your transaction, they will process the legal documents required for sale of real estate property. Legal fees generally average $750 and up, plus GST and disbursement costs.
Your lawyer or notary will arrange for the transfer of purchase money to the seller from your lender. He or she will also prepare a Statement of Adjustments which itemizes the costs payable at completion. Finally, disbursement costs such as faxes, phone calls and mailing fees will be itemized and vary from approximately $250 (total) and up.
Property Transfer Tax or PTT must be paid to the government when real estate is purchased. Please contact the Property Transfer Tax office in Victoria at gov.bc.ca/sbr for full details.
In summary, the amount of tax payable in British Columbia is 1% on the first CAD $200,000 and 2% on the remainder. The tax applies to any real estate, whether residential, commercial or industrial.
For example, to calculate the Property Transfer Tax for a home purchased at $374,000
1% x $200,000 = $2,000
2% x $174,000 = $3,480
Property Transfer Tax = $5,480
If you are a First Time Home Buyer, you may be able to apply for an exemption to PTT if the following requirements are met:
Use the following formula to calculate the amount of tax payable on homes purchased between $425,000 and $450,000
For example, a home is purchased for $430,000.00. The partial exemption would be $5,280.00 and the total Property Tax payable is $1,320.00.
In order to obtain a mortgage, your lender may request to have an up to date survey of your property on file. A property survey confirms the lot size and dimensions and identifies any encroachments. If you did not receive a copy from the seller, you will be responsible for the costs to have a survey completed. Fees range from $150 to $350 and up, depending on the size of the property.
Prior to possession day you will need to contact utility companies such as telephone, cablevision, Internet, hydro and gas to arrange for service. There may be fees associated with opening new service accounts and/or transferring existing ones. Contact your service providers in advance of closing to inquire about fees.