Buying a home

While this information is aimed at buyers of previously owned homes, some of it will also be useful if you’re buying a newly constructed home. 

Before you start looking for a new home, consider what you can afford. Be realistic. Consider your other financial goals, like saving for retirement, education costs and travel. Make room for unexpected job loss or illness. 

The money you need now

No matter how you decide to finance your home purchase, you’ll be paying a large amount of your own cash upfront. This will include:

• The down payment. The portion of the purchase price you pay yourself. Typically, a lender pays the rest, and you pay them back over time.

• Closing costs. This is the money you’ll have to spend to close the deal. Typical closing costs include property transfer taxes, legal fees, and home inspection. The BC Financial Services Authority has more on closing costs. 

The costs of owning

Once the home is yours, there are ongoing costs you’ll need to budget for: 

• Monthly mortgage payments. Most people need to borrow money to cover the rest of the purchase price. You’ll pay the lender back (typically monthly), with interest. This arrangement is called a mortgage. Learn more about getting a mortgage.

• Ongoing costs of owning. These include property taxes, costs of maintaining the home in good repair, home insurance, utilities, and (if you buy into strata housing) strata fees. 

If you find a home you want, you must make a written offer to buy it. Your offer should include the terms (such as the purchase price) on which you’re prepared to buy the property. 

In BC, a buyer typically makes an offer using a standard contract of purchase and sale. If you have a realtor, they should go through the contract with you and help fill it out. It’s important to understand what your rights are, what commitments you’re making, and the strict deadlines you must meet. We explain key things to know about the standard purchase contract.

Before you sign the offer, read it carefully. It may lead to a legally binding contract if the seller accepts your offer. Legally binding means you and the seller must each perform your obligations under the contract. If you fail to do so, you may run into legal problems, like losing your deposit. Each side can also take the other to court to compel them to go through with the sale.  

“We thought we’d found our dream home, at a price we could afford. We couldn’t believe our luck! Turns out there was a major structural issue which would have cost us too much to fix. Including a condition in our offer to have the property inspected helped us avoid financial stress.”

– Reggie, Langley, BC

You’ve probably heard of buyers making an offer after viewing the home just once. Buyers can feel pressured to make these kinds of offers when the market is hot. But it’s a risky move because it rules out the ability to do due diligence on different aspects of the sale and the property itself. Adding conditions (legally called “subject to” clauses) to your offer will buy you time to address certain risks. These include making sure you can actually secure financing and taking a closer look at the condition of the property.

In your offer, you need to propose subject removal dates for each condition you add. Usually, one week is plenty. But think about how much time you’ll need to satisfy your specific inquiries.

You can make your offer subject to:

• getting loan approval

• being satisfied with the results of a home inspection

• your lawyer’s approval of the agreement

• selling your own home by a certain date

• checking zoning and title to the property

“House hunting was a crazy, sometimes deflating experience. We felt priced out of the market. So when we found a decent home that we could actually afford, we put in an offer to buy it. But we thought the offer was like an ‘expression of interest.’ The seller accepted our offer. Once the three day cooling-off period passed, we were locked in! Soon, we were wondering if we were settling for something less than what we really want.”

– Jameela, Vancouver, BC

There are different ways the seller can respond to your offer. They can:

1. Ignore or reject your offer. You’ll be free to make offers to other sellers.

2. Propose changes to the terms. This is known as a counteroffer. For example, the seller might try to increase the purchase price. The counteroffer cancels your original offer. You must decide to accept the counteroffer, make a counteroffer of your own, or walk away. 

3. Accept your offer. To do this, the seller must sign the contract without changing it. They must also tell you that they’ve accepted your offer. 

The purchase contract is legally binding on the seller as soon as an offer or counteroffer is accepted in writing. This means they can’t cancel the contract without consequences.

There is a cooling-off period

As the buyer, once the seller accepts your offer, you have up to three business days to cancel the contract. This is known as the cooling-off period. (For most pre-sale contracts, the cooling-off period is seven days.) The cooling-off period applies to the sale of most residential real property in BC, but there are some exceptions.

During the cooling-off period if you change your mind and want to back out of the sale:

• You don’t have to give the seller a reason. 

• You’ll need to notify the seller in writing. 

• You’ll need to pay a fee to the seller. The fee is 0.25% of the agreed purchase price.

If an offer you make is accepted, and you don’t cancel it within this cooling-off period, you’re locked into the contract. The three-day cooling-off period runs at the same time as any subject clauses. 

Buying a home is a major expense and a complicated process. A good lawyer or notary public will walk you through. They’ll make sure you understand the paperwork. They’ll make sure things are done on time. Using a lawyer or notary (and requiring the seller to use one) can also help protect you from real estate fraud. 

The role of a lawyer or notary is to deliver what you’re expecting, without surprises. Generally this means registering your name on title of the property. (Having title to land simply means that you will be legally recognized as owning it.) They make sure there are no unknown mortgages or other financial encumbrances attached to the property. 

You can look for a home on your own. Most buyers ask a real estate agent for help. In BC, buyers don’t usually have to pay anything for their own agent’s services. Here is the usual arrangement. The seller pays their own agent a commission from the sale proceeds. That money is then split with the buyer’s agent. (If the seller isn’t using an agent, ask your agent how they will be paid.)

There are advantages to working with an agent:

• they are connected to networks of potential sellers

• they can help you clarify the type of home you need and can afford 

• they can help you make a written offer to purchase

• they can explain the steps and paperwork to complete the purchase

When it comes to choosing an agent, reputation matters. Ask for recommendations or look online. How well do they know your preferred neighbourhoods? Do they understand your lifestyle needs? As well, real estate agents must be licensed. You can find a professional on the BC Financial Services Authority site to see if an agent is currently licensed.

If you decide to look for a home on your own, good places to start looking are local newspapers and the internet. Online listing websites include REW, Realtor.ca and Realtylink.

It’s a good idea to get “pre-approval” for a mortgage before making an offer to purchase. Shop around to get the best terms. Our guidance on getting a mortgage has more information on what to expect when you meet a lender or broker.

Once your offer is accepted, get in touch with the lender straight away. Typically, they’ll need:

• a property appraisal done,

• proof that you’ve arranged to get fire and liability insurance for the home,

• title insurance, and

• a survey certificate, showing the home is within the property boundaries.

Ask your lender to give you a written commitment letter. You’ll need this letter to complete the sale.

When you find a home you want to buy, make an offer to purchase. In most residential sales in BC, a realtor will help write up the offer on a standard contract of purchase and sale form. We have a deep-dive on the standard purchase contract. Here's an overview of what's involved.

Your offer should include the following items. These are all negotiable terms. The seller can choose to accept, reject, or propose a change to any of them. You’ll need to decide what terms you’re willing to settle on.

• The purchase price. Set the purchase price you’re willing to pay. A realtor who knows the local market can help you put in an offer that’s competitive, but not overpriced. Also, find out if you have to pay GST on the purchase price.

• Time limit. Give the seller a time limit to accept your offer — normally a day or two. If the seller doesn’t accept it by then, you can make an offer on another property. 

• Deposit. You’ll have to pay a deposit. This is typically 5% to 10% of the purchase price. The deposit should be paid to your realtor in trust, not directly to the seller. 

• Your desired completion date and possession date. The completion date is when your name will be registered as the legal owner of the property. It’s also when you’ll need to pay the balance of the purchase price. The possession date is when you can legally take physical possession of the home. Usually, it’s the date you get the keys to your new home.

• List of fixtures. When someone sells a home, all the fixtures are included in the deal. A fixture is anything that’s attached to the home such that removing it would cause damage or require repair. If there’s something that you want to make sure is included in the sale, you can list it in your offer, such as appliances, curtains, mirrors, or chandeliers. Add a sentence that the purchase price includes these items.

Include any subject clauses for conditions that are important to you. It’s risky to make an offer with no conditions.

Before you sign the offer, read it carefully. Remember, it may lead to a legally binding contract! If there’s anything in it you don’t like or that doesn’t apply, you can change it. If you’re making major changes, consider getting legal advice before you sign.

Typically, buyers ask for a week to remove subjects, but you can ask for a longer time frame. Once agreed upon, it’s a strict deadline. To avoid scrambling, get on top of things straight away.

Here are some steps you might take to remove some common subjects:

• Obtain loan approval. Let your lender know you’ve made an offer to purchase. Most lenders require an appraisal of the home before they commit to the mortgage. 

• Complete a home inspection. Make time to attend and take notes. If the inspection turns up any problems, you can ask the seller to fix them or to reduce the purchase price. Consumer Protection BC has some more information on what to expect from a home inspection.

If you don’t remove the subject clauses, the contract ends. On the other hand, if you want to move ahead with the purchase, you must give written notice to the seller that you’re removing or waiving the conditions. (The notice is a schedule to the standard sale contract.)

After you’ve removed or waived the subjects

Here are some things that should happen shortly after the subjects are removed:

• Give the seller the deposit to secure the sale.

• Arrange for “all risk” insurance coverage from 12:01 am on the completion date onwards. Most lenders require proof of insurance before they’ll provide any funds for the sale.

• Find a lawyer or notary and let them know the deal is firm. 

You should touch base with your lawyer or notary well before the completion date. Then you’ll meet with them again on, or a few days before, the completion date to sign the closing documents. Don’t be afraid to ask questions. It’s important you understand each document you’re signing. We walk you through the common documents a buyer signs when closing a deal.

It’s your lawyer or notary’s job to make sure you understand the process. Here are some other things you can expect them to do (and explain to you):

• Ask how you wish to hold title to the property. If there are going to be multiple registered owners, you can hold the property in joint tenancy or tenancy-in-common. Unless indicated otherwise, co-owners are deemed tenants-in-common, meaning each has an equal interest in the property.

• Examine title. They’ll be looking for any charges against the property that reduce the value of a property, or restrict the property’s use. 

• Coordinate payments. Your lawyer or notary will tell you how much money you must pay on closing. They’ll also arrange to forward this money to the seller’s lawyer or notary. 

• Deal with your lender. If you have a mortgage, your lawyer or notary will receive instructions from your lender. They’ll make sure any documents your lender requires are in place. They should also explain the terms of your mortgage to you.

• Prepare the transfer documents. Your lawyer or notary prepares the transfer documents and sends them to the seller’s lawyer or notary. The seller signs the documents and returns them.

• Register you as the owner. Your lawyer or notary will register the transfer documents and the mortgage with the land title office. 

When your lawyer or notary has received all of the purchase money — and the land title office has confirmed the registration of the transfer documents — they pass the money to the seller. 

Your realtor will give you the keys to your new home on the possession date. Remember to set up hydro, telephone, and internet accounts. 

Enjoy!

If a seller accepts your offer (or any counteroffer is accepted), you have three business days to get out of the contract. This is called the cooling-off period. If you decide to back out, you’ll have to pay a fee equal to 0.25% of the agreed purchase price.

After the cooling-off period has passed, it may be possible to revoke (that is, cancel) the offer. Revoking an offer can lead to legal problems. You’ll probably lose your deposit. The seller may also seek other legal remedies, such as damages. If, before the completion date, you clearly indicate that you don’t intend to complete the contract, the seller is entitled to treat you as being in default. This is called an anticipatory breach of contract. It’s absolutely critical to ask for legal advice as soon as possible. A lawyer can help you minimize negative outcomes.

If you made an offer with subjects, you may still be able to walk away from the contract without consequences. Don’t consider subject clauses a free pass to get out of the contract, though. Legally you must use your best efforts to remove subject clauses. If you refuse to remove the subject simply because you’ve had a change of heart, the seller might be able to keep the deposit. 

If you or a close family member want to occupy the rental unit, you’re allowed to do so. A close family member is a spouse, a child, or a parent (or your spouse’s child or parent). You can ask the seller in writing to give the current tenant a three-month notice on your behalf. (All the conditions of the sale must first be satisfied.) If the tenant is on a fixed-term lease, the notice will start running from the end of the fixed term.

If you or a close family member don’t plan on occupying the rental unit, then you must honour the existing tenancy agreement. You can only end it by following the same eviction rules the previous landlord (the seller) would have had to follow. 

You can’t just evict the existing tenant because you want to raise the rent. If you do this and are caught, you may have to pay the former tenant 12 months of rent as compensation.

The Tenant Resource & Advisory Centre has more on your rights and obligations in this situation.

Buyers often get home inspections to check the physical condition of the property. Lenders will typically get an appraisal to assess the property’s current market value.