A Dumb Bitch’s Comprehensive Guide to Buying Your First Home 

Introduction 

Hey! If you haven’t yet heard, I recently bought my first home. You can read more about the background and all my feels here, but this post is more about the tactical side of it. If you’ve ever interacted me for more than 5 minutes, then you will be wholly unsurprised how I, a Certified Dumb Bitch, was extremely dazed, confused, anxious, and overwhelmed through the whole journey of making the single most grown-up, big-girl decision of my entire life to date. So I thought I’d share some of my learnings, in plain fucking English, in case it’s helpful for anyone else to be less dumb about it when it’s your turn. 

This is a very lengthy post that will be wildly uninteresting to anyone who isn’t actively thinking about purchasing a home – and even then, still potentially quite dull if you’re even moderately well-informed and know things already. I will cover pretty much every single tedious step and minute decision I underwent in my home purchase process; you’ve been warned. I won’t be offended if you click away now, but I’ve broken down the sections for your relevant skimming convenience.    

Some quick facts to set context before we begin: 

• I bought a 2 bedroom 2 bathroom apartment in Yaletown to live in myself with my roommate as my primary residence (not to be a skeezy landlord lol) 
• I worked with Jordan and occasionally other Jordan from Howard Scott Real Estate, who were referred to me by a friend (both 10/10 hmu for an intro if you’re looking). 
• End to end, it took about three months to find and and put an offer on my property, 7 days to remove subjects, and 2 months after that to get my shit together and take possession. 

A few disclaimers for posterity: 

• I bought an apartment in downtown Vancouver. This is a pretty ridiculous area in which to be purchasing property, so much of my experience may not apply to you if you’re buying elsewhere or looking for a property that isn’t a condo. Use your judgement. 
• When I say I’m a dumb bitch, I truly mean the dumbest of bitches. Some of this advice may seem like obvious common knowledge that everyone should know but if I’m mentioning it here then it was news to me at the time. If you are a halfway competent adult who already understands how to function in society you may not learn a single new thing in this entire post. If so, I hope you at least got some entertainment value out of my fuckups and follies. 
• I AM NOT A PROFESSIONAL (duh). OPINIONS ARE MY OWN AND NOT ACTUAL LEGAL/FINANCIAL ADVICE. PLS DO NOT FIGHT ME IF READING THIS RUINED UR LIFE. 

Ok, let’s go. 

 

You & Your Realtor 

I suppose in theory you technically could buy a home without a realtor, but why would you? A realtor is your magical wizard guide through the end-to-end home-buying process. They show you listings, negotiate with the seller on your behalf, and hold your hand through all the administrative bullshit (see below) you need to deal with when buying a home to make sure you’re fully prepared for every step. They have a fiduciary duty to you, meaning they will advise you with your best interest at heart, and will do whatever you instruct them to (within reason). The best part – as a buyer, working with a realtor is 100% free! They’re paid by the seller via commission, so there is 0 cost whatsoever to the buyer.  

 

Like therapists (as which Jordan occasionally doubled), realtors are not always one size fits all. Sure, you could just pick one at random and they’ll get the job done, but it’s much nicer to have someone who’s a ~culture fit~. Some factors to consider when sourcing your realtor: 

• LOCATION: Obvi you want someone who knows your hood. This means that they will have strong working knowledge of the area, market prices, and streets or even buildings that you’re interested in. When I sent Jordan downtown listings, he was often immediately able to recognize and comment on the quality of the building, so we were able to eliminate subpar options up front without wasting time visiting them irl (crucial in a panorama). 
  • ASK YOUR REALTOR: In which areas do you sell the most homes? With which neighbourhoods do you specialize? Given my budget and criteria, what locations would you recommend to me and why?  

• AVAILABILITY: most people have day jobs and conduct their house-hunting outside the 9-5. Make sure your realtor is readily available when you need them on the channels that you prefer (i.e. email, text, phone, etc.), so they’re always within reach when you need them. I texted Jordan late into the night on the reg (not that I’m advocating bothering your realtor during unreasonable hours – sorry J lol), and always felt taken care of and prioritized no matter the time of day.
  • ASK YOUR REALTOR: What’s your most effective communication channel (email, text, calls)? During which hours can I expect you to be available? How quickly can I expect you to get back to me on each channel? 

• VIBES: TLDR VIBE CHECK YOUR REALTOR. You’re gonna spend a lot of time with your realtor – in person looking at listings as well as endless communication throughout the process. Why wouldn’t you want someone with whom you get along? Jordan and I aligned clearly on my expectations and concerns up front including what didn’t work for me in the past, so I felt comfortable and confident embarking on this ~journey~ with him. This won’t be the case for everyone, but for me it was really nice to work with someone a smidge closer to my age range where I felt I could truly be myself instead of needing to masquerade as A Competent Adult just to be taken seriously as a client. Jordan never (overtly at least) judged me for all my dumb bitch questions (trust, there were many), and that made for a truly delightful end-to-end home buying experience.
  • ASK YOUR REALTOR: How would you describe your working style and relationship with your clients? What’s your approach to finding homes for your clients? What factors would you recommend prioritizing in choosing a home? What’s the average value or range of homes your clients are buying and selling? 

But Yuna, where do I find a realtor with good vibes? 

IMHO, the best way to source your realtor is by word of mouth from your network, because they’ll have had first-hand experience working with theirs and can advise if they’d be a good fit for you (hi, me, happy to refer the Jordans if you’re looking). If you’re the lucky first in your circle to be buying a home, you can google “realtor [my area]”, but check reviews on an aggregator like Rate My Agent to make sure they hit on the notes you’re looking for. As a last resort, if you walk into an open house unrepresented, the listing agent may try to scoop you. This is a totally legitimate way of meeting your realtor in the wild (provided you don’t want to purchase the specific property they’re representing, cause that would be a conflict of interest which is no bueno).

Ok I found a good one, how do I hire them? 

This was surprising to me. For the vast majority of realtors*, all you need to do to start working with a realtor is literally… just say you’re gonna work with them. I assumed there would be some kind of contract or paperwork or something but no – call them up, and if you like them, then they’re your realtor. That’s it. They work for you. You are the captain now. 

*A select few (Jordan thinks under 5%)  might ask you to sign an “exclusive buyer’s agency agreement” to lock you in with them, but this is a fairly uncommon practice. Seems weird to force someone to stay with you if it isn’t working out. 

 

 

Le Hunt

I love the internet. In ye olden times I guess you’d just need to rely on paper flyers or walking past open house signs to find your property. Today, there are a few common sites like Realtor.ca or REW that will do all the work and aggregate all official MLS listings for you, you lazy piece of shit. Personally, I like REW for its ability to filter based on variables like square footage and age of property, as well as its map view so you can see where exactly the listings are located. Once you get deep enough in the search, you’ll also probably start getting targeted ads to listing agents’ own website posts. What a time to be alive. Regardless, a good realtor will keep a lookout for suitable options on your behalf, and send you regular roundups. 

I’m the bitch always holding back the table from ordering food because I just can’t make up my mind, so imagine my paralysis with higher stakes choices. It can be pretty overwhelming to peruse properties when there are so many options, so it’s a good idea to crystallize your own personal criteria beyond just budget to narrow down the pool. Remember that you can always make cosmetic changes like paint colour or flooring, so it’s more important to look at fixed things like layout during your search. 

I’ll share a few of mine here for inspo. Keep in mind that these are very specific to me and my needs; you may not care about some or all of my must haves, or you may have your own personal dealbreakers that I didn’t consider: 

MUST HAVE

• Gas stove, because I love cooking almost as much as I hate the environment (jk about the environment part pls don’t come for me it’s just objectively superior cooking) 
• Adequate dining space for minimum 6 people (for y’know, all my so many friends who are always coming over in a pandemic) 
• 2 bedrooms + 2 bathrooms (so I have options on where to cry myself to sleep) 
• Outdoor balcony/patio (so I can scream into the void) (jk don’t do this ur strata will fight u) 
• Ensuite laundry (so I never have to possess another coin ever again) 
• Pet friendly (so I can fulfil my destiny of becoming a crazy dog lady) 

NICE TO HAVE 

• Floor to ceiling windows with a view (to stare out of during my existential crises, plural) 
• In-building gym (for all the exercise I’m definitely doing all the time) 
• Bathtub in the master bedroom (as opposed to a stall even though I almost never take baths butlike, I want the option) 
• 9ft+ ceilings (because I intend on exclusively dating extremely tall men) 
• Walk-in closet (to house all the clothes I never wear anymore but have been hoarding since high school – Marie Kondo is quaking) 
• Southern exposure (to be hot enough in the summer for me to prepare for my eventual eternal burning in hell)  

 

DUMB BITCH TIPS FOR HOUSE HUNTING 

The following are Captain Obvious tips that most will but I did not already know prior to engaging in the home-buying process. Please do not judge me for not knowing these things before. I am a literal (figurative) fetus. 

Stratas

Apartment buildings will usually be run by a strata with a council comprising 5-10 elected fellow owners. This is basically like student council but for the building, complete with weird power tripping egos. As an owner, you’ll pay monthly fees to the strata for shared/common building maintenance, like garbage services and renovating the lobby when it gets too dank. The strata also sets the building by-laws aka house rules, including whether or not it restricts rentals or how much money to charge for booking the elevator when moving in. 

The smaller strata council meets regularly to govern the little things, like fining rulebreakers or arranging minor repairs, but big ticket items like expensive renovations or material changes to the existing by-laws are voted on by all owners in the building at the strata Annual General Meeting (AGM). Stratas will have varying degrees of proactivity and strictness from building to building. For example, my strata is pretty uptight and doesn’t permit bicycles to be brought into the building from the main lobby (to prevent mud from being tracked in – pretty common) or fake plants to be kept on balconies (for… unknown reasons – less common). 

Most (good) stratas will maintain a contingency fund, which is basically an emergency savings account funded by a portion of your monthly strata fees as well as any income from fining residents who violated by-laws. A healthy contingency fund will cover some if not all large expenses a building may incur, but requires higher monthly fees to maintain. Lower strata fees may mean a smaller contingency fund, which could lead to higher one off levies (aka extra money on top of your monthly strata fees to pay for something the strata doesn’t have money for) for non-routine work. That was a lot of words to explain that it functions pretty much exactly the same way as any savings account you’ll ever possess or encounter: save more now = spend less later; save less now = spend more later. 

Building age 

Typically, condos start to need big maintenance work like replacing the roof or pipes around the 25 year mark give or take, depending on the building’s construction quality and maintenance. If the strata hasn’t adequately budgeted for this, it may come up in the form of unexpected levies . If you’re looking at buildings in the 20-30+ year age range, it’s a good idea to look into what work has been recently completed and what is planned for the near term future. 

If you’re looking at a condo built between 1981 and 1998, make sure it’s not a leaky condo. What the fuck is a leaky condo? Well, back in the day, it was this super fire trend to use California style construction in Vancouver new builds. The thing is, it doesn’t fucking rain in California, and the designs didn’t have adequate rainscreening and roof overhang for the aggressive precipitation that plagues Raincouver. This resulted in a bunch of condos having severe leakage issues, amounting to around $4B of water damage over the 20 odd years according to Wikipedia, which contrary to what was drilled in by our high school teachers, is tbh probably a pretty reliable source given its stringent fact-check policies. So if you’re looking at buildings built in that time frame, especially 1995 +/-, triple check what the waterproofing sitch is before sliding in your offer. 

Unit entitlement 

Unit entitlement is a number calculated based on the square footage of your unit divided by the total square footage in your building, and is essentially the % ownership and therefore responsibility you have over the building. Your share of strata fees and levies are calculated based on this percentage, so a 3 bedroom apartment with a higher unit entitlement will pay more to the strata than a 1 bedroom apartment in the same building. Yay math. 

This is why an efficient floor plan that maximizes your space is ideal; it’s not necessarily a bad thing to have a higher unit entitlement – that usually means you have a larger floor area to live in. But if a significant chunk of your square footage is taken up by long hallways or useless foyers, it means that you’re paying for a larger share of the building’s expenses without being able to enjoy that space to the fullest. 

On that note – don’t get too caught up on square footage. While it’s a useful metric to estimate how big a unit is, the floor plan can drastically change how open or cramped it feels. A 750sqft apartment with an efficient floor plan can feel much more spacious and functional than an 850sqft apartment with a stupid layout (and trust, I’ve seen my share of stupid layouts). 

Freehold vs Leasehold 

If you come across a property listing that seems too good to be true – massive square footage for a significantly lower price than you’ve previously come across, check whether the title is freehold strata or leasehold strata before getting too excited. Most of the time, you’ll want a freehold strata over a leasehold strata. 

A leasehold strata means that the land is leased from the government over a certain period of time, for example 40 or 99 years. At the end of that term, the building may renew its lease with the government, but it’s not guaranteed so you could potentially lose your home at that time.  

A freehold strata means you have the title to the land indefinitely. You own it forever and no one can take it away from you. This is usually preferable if you have the budget, but will cost more than leasehold for obvious reasons.

 

Writing an offer they can’t refuse

Omg you’ve just found your dream home and are ready to put in an offer! 

The first and most important thing you’ll need to decide is the price. There are a couple of factors that may influence how you approach it: comparables (i.e. historical prices at which similar units sold) in the same building, comparables in the general neighbourhood (i.e. downtown Vancouver), appraised value of the unit (may be lower or higher than the list price) upcoming expenses and levies that you know of, and length of time that that particular unit has been sitting on the market. Your realtor should be able to help you pull all of these numbers. 

Your realtor will also probably have some recommendations on how to strategize, but ultimately this decision is up to you. You’re free to instruct your realtor however you want. As a rule of thumb, the longer a unit has been sitting on the market, the more amenable to a lowball offer they will probably be. Regardless, you’ll want to get your offer in ASAP once you’re ready, to prevent other buyers from moving in. Listing agents will usually let you know if there are other offers in the works, in which case you might have better luck going in with a more aggressive number to beat out the competition. Make sure you have firm numbers for a target price as well as a hard ceiling in mind before writing the offer, so you don’t get caught up in a bidding war and end up paying more than you’re actually happy to. 

There are a few more items that will be included in your offer, including time before completion for you to view the unit again. But other than price, the two major components to your offer you’ll need to decide, both of which can also be used as levers in your negotiation, are subjects and completion date. I’ll cover subjects in more detail than you want or need below, so I’ll skip straight to the latter, which is supa EZ. The completion date is exactly what it sounds like: the day the sale becomes complete, or when the land title is officially transferred from the seller’s name to yours. The day after completion, you’ll get your keys and can start moving in. Usually, you’ll want to leave a little wiggle room, for example leaving enough time to give your current landlord your 30 days, or if you’re close-ish to the end of your lease, running that time out. If you’re flexible on timing, you can use that to sweeten the pot for the seller as they may have a specific timeline they’re running on. In my case, I arbitrarily threw a dart at the wall and picked a date roughly 2 months out from the day I wrote the offer. 

Depending on the time of day you send them, offers should expire fairly quickly (i.e. in multiples of 6 hours or so). This puts pressure on the seller to make a quick decision, and saves you lots of anxious waiting time (though the handful of hours it took for my offer to close were the most high strung of my life). During this time, the seller might come back and negotiate, either verbally through the listing and buying agents, or via formal written counter offer. Here is where it’s super handy to have a realtor who is an excellent negotiator. Thanks to Jordan and his expert wrangling, he was able to close my first offer without coming back to me with a counter despite some very heated objections from the other side. 

Once you’ve mutually agreed and have signed the final offer, assuming you’ve included subjects, you’re not done yet. This position is most favourable to the buyer, as you’ll have time to really be sure about your purchase and can pull out if you need to, but locks in the seller at whatever you’ve agreed upon so they can’t solicit new offers from anyone else.

 

Administrative bullshit 

Ok, you’ve found your dream home, negotiated with the seller, and have an accepted offer in hand. What now? Well, there are a few more administrative hoops to jump through before you can pack your bags and move in. 

SUBJECT REMOVAL

When you write your offer, you will probably want to include subjects. These are caveats to your offer – i.e. I agree to pay you $x for your house provided that I don’t find anything wrong upon closer inspection. In a select few cases, you may exclude subjects as a bargaining chip on your offer, but it’s generally a good idea to include them, so you’re protected against surprises. Typically, subjects will include strata docs, inspection, and financing. More on each below: 

STRATA DOCS

Stratas can make or break a property. Whether or not a strata and its state is acceptable is up to you, the individual purchaser, so make sure to go through these documents carefully to fully understand what you’re getting into. 

• Meeting minutes 
  • Annual General Meeting (AGM): All members of the strata (owners of units in the building) are invited to attend the strata’s AGM. Minutes from these meetings over the last 3 years will give you an overview of any major upcoming plans, changes to existing major plans, annual budget status, and significant bylaw changes.

• • Special/Extraordinary General Meeting (SGM/EGM): These are usually called in case of unforeseen major crisis or emergency requiring special attention from strata members to vote on unforeseen action required. Think: huge earthquake hits, strata must vote to approve payment for major repairs that were not budgeted for. Some buildings will have not had any SGMs, but if minutes are provided to you, look through them carefully for anything that may impact your decision to purchase.

• • Council meetings: The smaller elected strata council will meet on a more regular basis (i.e. monthly) to discuss minor decisions and incremental status on ongoing projects. The level of detail in these minutes will vary by strata, but going through them will give you a good idea of how your strata runs. For example, after reviewing these minutes I was able to ascertain that my strata is extremely detail-oriented and strict with rulebreakers, which, while lowkey narc af, is probably ultimately in the best interest of the building as a homeowner.

• • Depreciation report: This is a big boi document. Very important, very good information that will help predict your upcoming strata costs. It’s an evaluation of the current state of your building from a financial point of view, and outlines projections for the dollar amount and timing of significant upcoming expenses. This will include things as small as replacing common area lightbulbs or painting the hall walls, to bigger things like replacing the pipes or roof. A depreciation report is usually produced every 5 years or so (as they cost money to do), and will usually provide a pretty long term outlook (mine was 30 years). They’ll usually also provide a few options for funding, either dipping into the contingency fund, special levying strata members out of pocket, or some combination thereof. A thorough understanding of this document will ensure you’re fully informed of the worst case scenario out of pocket strata expenses you may encounter in the next few years.

• By-laws: These are the aforementioned house rules of a building. Each strata will have different rules, but some common examples can include: whether or not rentals are permitted and under what circumstances (i.e. no Airbnb or minimum 3 month terms), how many pets if any are allowed, whether or not smoking is permitted and where, and fine amounts for breaking the rules. You will need to judge these based on your own needs and preferences

• Form B: This is your information certificate that tells you all the relevant information about the unit itself in the context of the strata. It has quite a lot of information on it, but some of the most important pieces include:
  • Strata plan LMS (unique identifier for the building strata) 
  • Your strata lot # (the specific unit you own in the strata) 
  • The amount of your monthly strata fees 
  • Any money either upcoming or currently owing to the strata
  • Information about the current strata budget / contingency fund 
  • Information about your allotted parking stall(s) and storage locker(s) if applicable

Inspection

If you choose to hire a professional home inspector, they will check to make sure the home is in good condition. This includes everything from serious or even irreparable issues like water damage or black mold, to easy fixes like broken appliances or sticky doors. Getting an inspection prior to closing ensures that your home will be move-in ready and you’ll have confidence that everything will be working as it should after the fact. If you don’t know where to find an inspector, your realtor will be able to recommend one. 

Financing 

• Mortgage

While it’s a good idea to get preapproved for a mortgage before you even start your hunt (more on this later), you’ll still need to do a final approval on the purchase once you’ve put in your offer. If you did get preapproved, there’s probably nothing to worry about; at this point it’s just about hammering out the fine print details since you’ve determined your specific home. If you didn’t, then this stage may make or break your purchase if you’re not actually able to secure the bag.

• Appraisal 

In some cases, your lender may want to do an appraisal on your property before finalizing the loan. This is to make sure that the amount you’re purchasing it for reasonably lines up against the appraised fair market value of the home. Specifically, they’re looking for the LTV or loan-to-value ratio, which compares the size of the loan to the value of your home. If the appraisal comes in much lower, your lender might ask you to put more money down up front to keep the preapproved interest rate.

• Paperwork 

The lender will want to see proof of a couple of things before giving the final sign off. This will vary depending on your specific situation, but may include things like: proof of employment (tenure, salary, title), proof of downpayment (bank statement showing that it’s already in your accounts or gift letter if someone else is providing some or all of it – hey no shame in the game), copy of your ID, or tax forms from the previous year. 

When you write an offer that includes subjects, you’ll give yourself a period of time (usually 7 days or less) to do all your investigations before removing subjects aka moving forward with the deal. In those seven days, you may, for literally any arbitrary reason, decide to not remove subjects and pull out. You don’t even need to tell the seller what your reason is, so don’t stress about cold feet after the initial offer. 

If you do find something weird, you can try to renegotiate. For example, if it comes out that the strata has a huge renovation with a giant levy coming up, you might try to cut your original offer price. Or, if the stove is busted, you may request that the seller repair it at their expense. In both these cases, the seller totally has the right to refuse, in which case you can either not remove subjects or just accept the original contract as is, but why not shoot your shot? If you try to open a negotiation with the seller, make sure to protect your original deal by including a clause that if you’re not able to come to a new agreement, the original contract still stands. 

Deposit 

Great news, you’ve looked through all the million pages of strata docs, found nothing sus in your inspection, and have gotten the green light from your lender on a multi hundred thousand dollar mortgage. You’re still very stoked about your offer, and you’re ready to remove subjects! Yay! Once you inform the seller that you’re removing subjects, you’re both locked in for realsies and your 5% deposit will be due within 24 hours, payable to your realtor’s brokerage in trust. So make sure you’ve got that amount liquid and ready to rumble before the deadline. 

Lawyer Up 

A minimum of one week before your completion date, you’ll need to meet with a specialized real estate lawyer or notary who will help you through the last steps of conveyancing and paying for the home. Conveyancing is basically the legal schmegal part of transferring the title of your home from the previous owner to you. Your lawyer will take care of a couple of things for you, including reviewing the sale contract, conducting due diligence (fancy words for a title search and making sure there’s nothing sketchy going on), preparing all the paperwork for completion, and explaining everything to you before you sign your life away. 

At this time, you’ll pay your lawyer (in trust) the remainder of your downpayment (cause you already paid a 5% deposit, remember?), your property transfer tax, any outstanding legal fees, and potentially also your first month’s strata fees if that’s how they want to do it. 

Then you’re done! Hang tight and wait that last week for your completion date, at which point your realtor will congratulate you on officially owning your property!

I worked with Rajesh of Soni & Company who was referred to me by a friend, before we recognized each other from debating against each other in university a few years ago. Small world. Your realtor will provide a list of lawyers and notaries if you don’t know anyone already, but Rajesh was pretty affordable for a legitsies lawyer and also a v chill dude so I’m happy to refer you if you’re interested.  

And that’s it! Once you’ve jumped through these administrative hoops, you’re done the hard part and can just chill and wait for your keys.  

 

 

Dolla dolla bills y’all 

 

There are three major money decisions you’ll need to make in your home buying journey: your budget, your offer, and your financing. There are also a bunch of smaller money decisions, but we’ll get to those afterwards. 

Budget

Conventional budgeting wisdom posits that you should spend ⅓ of your monthly after tax income on rent, spend ⅓ on your non-housing expenses and purchases, and save/invest/redistribute the remaining ⅓. I know not spending an entire third of your income isn’t always feasible for everyone, but this is a post for people on the housing hunt so I’m going to make some broad strokes assumptions that you’re in a financial position where this is a reasonable breakdown. 

For home ownership, most guides will advise you to budget for your housing expenses (mortgage payments, strata fees, taxes, insurance, etc.) to amount to no more than ⅓ of your gross (i.e. before tax) income. Due to the stupidly exorbitant housing costs in Vancouver (especially downtown), this can be unrealistic for our particular region if you’re looking for anything larger than a shoebox. The typical mortgage lender will usually qualify you for monthly mortgage payments up to a maximum ⅓ of your gross income, but that won’t account for your other recurring expenses when you look at your total budget.

I believe in transparency, so I’ll share some of my own actuals. While my monthly mortgage payments are only 26% of my monthly gross income, my total housing expenses (i.e. including mortgage payments, strata fees, property taxes, insurance, utilities, etc.) come to just under 39%. Personally I prefer to calculate these kinds of things based on net income aka after tax pay, which for me is just about 50%. However, as a frugal child of poverty, I only spend around 20% on the rest of my expenses, meaning with this budget, I’m still able to save and invest at least 30%. 

My current roommate (+ dog) will also be moving in with me because I’m needy and can’t be alone in quarantine, and the unit comes with two parking spots that I can rent out, all of which help to offset my costs. Regardless, I wanted to make sure my budget was realistic even without a buddy. Lastly, while home ownership is obviously expensive, it’s also a longer term investment that will (hopefully) eventually generate value back, so that’s how I justified its fatter share in my spending. 

Ultimately your budget will be personal to you and your financial situation. Just be mindful of all the other expenses beyond just your mortgage payments you need to consider. Let’s break it all down, shall we: 

PURCHASE PRICE 

• Deposit: 5% of purchase price 

The deposit is due within 24h of subject removal, which is usually 7 days after a signed offer. This is the only mandatory lump sum you don’t get to choose, but is deducted from the remainder of your down payment when you eventually pay that. 

• Downpayment: 5-20+% of purchase price 

The downpayment is whatever portion of the total purchase price that you pay up front right away. The % requirements will depend on where you’re buying, but in BC, the minimum amount is 5% up to $1M, after which you must put at least 20% down. 

• Mortgage: Purchase price – Downpayment 

K you should all know this but to keep it MECE, the mortgage amount is the amount of money you’re borrowing to be able to purchase this property. More on mortgages later. 

 

CLOSING COSTS 

• Inspection: $400-500 

Technically optional… but do it. 

• Appraisal: ~$300

May or may not be required depending on how your lender feels about you

• Lawyer/Notary + disbursements: $750-1500 

Mandatory. As I mentioned, You’ll need a lawyer or notary to complete the conveyancing process.They’ll have their own fees, plus disbursements aka anything else they need to pay to acquire documents etc. A notary will usually cost a little less than a lawyer, but both are well-equipped to do the job. 

• Property transfer tax: 1-3% of purchase price: Super mandatory and self explanatory. You want to buy property? Board man gets paid. This tax is paid to the province and in BC is calculated based on:

• 1% on the first $200,000,
  • 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000,
  • 3% on the portion of the fair market value greater than $2,000,000, and
  • If the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000
• Mortgage loan insurance: 0.6-4.5% of mortgage amount 

Either mandatory or not applicable. This one only applies if you purchase your property with less than 20% down, which is why it’s usually recommended to put down at least 20% if you have it. Essentially, this is an insurance against your high ratio loan, in case you default. Properties above $1M require 20% down by default, and don’t require MLI as a result. 

 

MOVING COSTS 

• Movers/truck rental: $100-120/h @ 4-8+ hours

Optional. It’s a pandemic so I couldn’t recruit all my muscle pals to come help me move. Instead, I spent a very worthwhile $600 to hire movers for this particular endeavour because I am so weak and can’t pick things up.  

• Strata move in/out fees: ~$400 

Many stratas will charge you a move in/out fee to book the elevator in the building. This is commonly a $200 one time fee, but can also vary from strata to strata. Doubled up cause you might have to pay a fee to both the building you’re leaving and the one you’re moving into.

• Cosmetic costs (renovations/decorating/furnishing): $???

The sky’s the limit. The amount itself is less important than the fact that you set a budget and are prepared for it on top of all your other costs. I’m spending about $3000 on painting, shelving, and new floors, and another $1500 on essential furniture (couch, dining set, etc.) up front – all else will slowly trickle in. 

 

ONGOING COSTS 

• Annual property tax: ~0.29% appraised value 

This is a twofer: municipal tax + school tax that changes from year to year based on your city’s needs. In Vancouver, it’s currently 0.29% of the appraised value of your home, not the price you bought it for.

• Strata fees: $100-600+/month 

Monthly dues you pay to participate in your strata. Calculated based on the total annual budget of the strata divided by your unit entitlement. This also tends to increase incrementally every year.

• Insurance: ~+/-$1000/year 

You definitely want to insure your home against emergencies. Your building will have a specific deductible that owners are personally responsible for, and the cost of your insurance will vary based on that deductible. If you haven’t heard, in 2020 BC condo insurance premiums jumped by over 65%, because fuck 2020 of course it did and also because insurers are getting spooked by our weird housing market. Which tbh, like, mood. While it’s more common for insurance to be paid in an annual lump sum, some insurers have the option to pay on a monthly basis.   

• Utilities + general maintenance: $50-100+/month 

This is the “etc.” category. One of the unique joys of home ownership is that you are now solely responsible for everything that happens in your unit! No more calling the landlord for your busted pipes; YOU are your landlord and that’s YOUR problem now! Yay! 

Overall, on day 1, I needed over 10% MORE than just the down payment on my condo in cash to cover all of those aforementioned extra expenses. 

 

FINANCING 

Who will lend me money?

• Mortgage broker

A mortgage broker is an independent middle man who has relationships with lots of different types of lenders, including retail (banks), and others. The benefit of working with a broker is that they’ll be able to find a good solution for your specific situation if you have any unique needs, given that they have a roster of diverse lenders that they work with. They can also save you the work of shopping around for the best rate, as they’ll handle that for you. The drawback is that they may take a cut you could avoid if you dealt directly with the lender yourself, depending on how their fees are handled. 

• Retail bank 

It can be super convenient to work with the bank that already handles your personal finance for your mortgage, so you can have all your shit in one place. However, you may be beholden to the limitations of the terms and rates that your bank follows, so you could miss out on a better deal elsewhere (alternatively: you need to personally put in the work to go check out other banks’ rates). I went with BMO because that’s the bank I use already anyway, and luckily they were able to beat the best rate that the mortgage broker I spoke to came back with.  

• Other lenders 

Mortgage brokers and banks aren’t the only source for mortgages, but they are the most common. If you’re interested in pursuing a different route, here is a good roundup of your other options.

Pre-approval 

You should definitely get preapproved for your mortgage as soon as you start seriously looking, so you know up front what your maximum budget is. The amount you’ll be approved for depends on a) the down payment lump sum you have available, and b) your monthly income

Mortgage rates

Mortgage rates will loosely follow the federal interest rate, with some variation between specific lenders. There are two types of mortgage rates you can choose from: 

• Fixed 

A fixed mortgage rate will stay the same for a certain period of time (ex 3-5 years), so for the duration of that period, you’ll always pay the same rate even if the federal interest rate changes. This is usually preferable if you think that the current mortgage rate is low and will increase in the near future, so you’re protected from future increases. At the end of the fixed term, you can either switch to variable, or renew another fixed rate term based on the interest rate at that time. If something drastic happens and you want to break the fixed rate term before it’s up, you’ll need to pay some cancellation penalties. 

• Variable 

A variable mortgage rate is pretty self-explanatory; it varies. You’ll basically always pay whatever rate the lender is currently lending at. If you’re buying during a time when you think the mortgage rate is abnormally high and you predict it will drop, it might be smart to start with a variable rate so you can take advantage of lower future rates. If you start with a variable rate, you do have the option to convert to a fixed rate term at any time. While you run the risk of losing a low interest rate if it increases soon after you sign, a variable rate mortgage will generally provide much more flexibility than a fixed one. 

A VERY IMPORTANT HOT TIP: never ever ever ever accept the mortgage rate that your lender offers at face value. Like buying a car, there is ALWAYS room to negotiate. For example, banks will often advertise their mortgage rates up front. However, when you actually engage with either an independent mortgage broker or a bank’s mortgage representative, they’ll have wiggle room to get you a better rate. Shop around with multiple sources and pit them against each other; I went with BMO and even after the final approval on my offer, I was still able to get them to match a bonkers promotion I saw later on with CIBC. 

• Mortgage terms 

Aside from the rate itself, mortgages can have different terms attached to them that make them more or less advantageous. When you take out a mortgage and make payments on it, you’re paying for two things: the principal, i.e. the lump sum # of dollars that you borrowed to purchase your home, and interest that compounds over the lifetime of your loan. For any mortgage, the most basic terms will be that every month, you make equal payments to pay back a portion of the principal plus interest. But, keep an eye out for a couple of other things that can change your experience: 

• • Permission to top up a certain percentage of your principal each year with a lump sum payment on top of your monthly payments without penalty
  • Ability to increase the amount of your monthly payments every year if your income increases and this becomes viable
  • Interest rate to take out a Home Equity Line Of Credit (HELOC) to have on standby for emergencies like unforeseen strata levies
  • The delta of interest paid on different payment schedules (i.e. weekly, accelerated/rapid weekly, biweekly, accelerated/rapid biweekly, or monthly)

How to pay – no literally, logistically, how do you pay 

Ok this may be the dumbest of all dumb bitch content (I’m so embarrazzed), but until I was literally purchasing a home, I had never needed to encounter or understand what the fuck a bank draft is. Yes, 25 whole ass years on this earth and I didn’t know what it was. For some reason I had it in my head that I could, I don’t know, ETRANSFER my several tens of thousands dollar deposit or something. Yes, I know, what the fuck Yuna??? Idk. I’d just never been in a situation where I needed to possess working knowledge of methods for offloading such a large quantity of dollars. Anyway just in case there is anyone else who’s currently under the same rock from under which I only recently emerged, let ya big sis ‘splain. 

A bank draft is basically a big ass cheque – like literally a physical paper cheque. Except instead of having the recipient cash it to trigger the funds being withdrawn from your bank account, a bank draft withdraws the money up front once it’s written. It must be processed by a human body at a bank, which you can either do in person day of or have snail mailed to you, which obviously requires more time in transit. This was all news to me when I found it out.

You will need to use a bank draft to pay three major sums of money: 1. Your 5% deposit due within 24 hours of subject removal, 2. Your property transfer tax due at completion, and 3. Your downpayment less the deposit you already paid due at completion. In a pinch, you could also wire the money provided you have enough time for the transfer to complete before your deadlines, but bank draft is by far the easiest, quickest, and cheapest method assuming you have access to a physical bank branch. 

Gov Perks, Kinda 

• Home Buyer’s Amount

Canada will literally just give you $5,000 back on your taxes if you’re buying a (qualifying) home for the first time. Suspiciously nice, full details here 

• BC first time home buyer’s tax exemption 

If, for your first time buying a home, you’re lucky enough to have found a suitable property under $500,000 you will be exempt from paying the full amount of the property transfer tax (<$8,000). Between $500,001-525,000, you will be eligible for a partial tax exemption – full details here 

• RRSP Home Buyer’s Plan (HBP)

First time home buyers are permitted to borrow up to $35,000 from their RRSP tax free to help fund their downpayment, provided they repay the amount in full over 15 years. Crucially, that $35,000 must have been in your RRSP account for at least 90 days prior to withdrawal. If you’re buying the home jointly with a partner, you’re both able to borrow the $35,000 amount, totalling $70,000. Full details here.

• TFSA

Some people prefer withdrawing from their TFSA over borrowing from RRSP, because of its flexibility. Money in your TFSA is yours to use when and how you wish, compared to the HBP where the amount borrowed must be replaced.  

• First time home buyer incentive 

If you’re making less than $120,000 and are borrowing less than 4x your annual salary ($480,000 max), then you may be eligible for Canada’s first time home buyer incentive. This is a shared equity mortgage, where the government will lend you either 5% or 10% of the mortgage, repayable either when you sell the property or at the end of 25 years, whichever comes first. The nuance here is that while you’ll have lower monthly mortgage payments, you will be repaying the government the same % of the value of the home (5% or 10%) at the time of repayment, NOT the same dollar amount that they lent you in the beginning. With this incentive, you’re sharing both the downside but also the upside with the government.

 

Famous last words

Well, there you have it. My exhaustive and complete guide to everything a Dumb Bitch needs to know about buying a home. If you’ve made it this far and still have questions, I’m happy to chat (or better yet, put you in touch with the very excellent Jordans who will do a much better job than I could ever). 

One thing that scared me the most about home ownership, beyond like, crippling mortgage debt, was commitment. Many of you are aware of my ambition to travel lots and live in different countries, so owning property anchoring me to Vancouver felt a bit like a barrier to that kind of exploration. For some, the mobility, freedom, and lower short term cost of renting can be more conducive to the lifestyle you prefer. Much like most things in life, purchasing a home isn’t the kind of decision anyone should make because of optics, or fear of falling behind the prescribed path of social success. It’s an extremely nuanced and personal decision, and anything anyone else is buying is completely irrelevant to you and your life. 

Now that we’ve made it to the end, I want to reiterate the very important point that this collection of ceaseless word-vomit has been a direct product of my individual personal experience. If you disagree with anything I’ve said or have had a different experience, that’s cool, man. Variety is the spice of life. 

Anyway, if this is a journey upon which you, young grasshopper, are embarking, then good luck, godspeed, and don’t be dumb like me!