Buying Property on an Island - The Steps 

Whether it’s your first home, a retirement or part-time residence, or a piece of property on which to build your dream home, buying real estate in a new and unfamiliar place is filled with challenges . . . local building regulations, island water and septic requirements, sloping coastal properties and many others.

Where do you start? Who can answer these questions? How do you select the right property and then negotiate the right price? The questions surrounding buying island real estate can seem endless.

The following steps will help you through the buying process:

Hire a local Real Estate Professional.

The first step is to find the right local realtor. A skilled and knowledgeable real estate agent will answer your questions and make you aware of things that you would never have thought of on your own. He or she will save you time . . . and money.

The agent is legally responsible for representing the buyer’s interest in a real estate transaction. The realtor explain the process to you.

The seven real estate professionals at Pender Island Realty are the most experienced on the Islands. They can guide you through every step of the home buying process. Pender Island Realty sells more real estate than any one else.

Pre-qualify for a Mortgage.

How much can you afford to spend on real estate? The mortgage lender has this answer and the financial institution that you come to terms with should be willing to pre-qualify you for a mortgage loan. This allows you to move quickly when you find the right home or property, especially when there are other interested buyers. It also tells the seller that you can afford to buy their property and that you are serious.

Shop around for Mortgage Rates and Terms.

Most buyers of real estate talk to a mortgage broker. A mortgage broker does not charge the buyer and they shop for the best rate available. Even half a percentage point difference can result in significant savings over the life of a loan. Consider the difference in the monthly payment on a $100,000 mortgage at 7.5% versus 8%. Just $35 per month. Over 30 years, that’s $12,600!

Decide what you are Looking For.

Now you know how much you can afford. The next step is to list your requirements; what you can't live without and, if you can afford it, the features you would enjoy. Search our listings page to see what is currently available on the market with the features you are looking for and in the price range that you can afford. Your Pender Island Realty agent can then show you the homes that meet your expectations and help you refine your list as you view these properties.

Visit your list of Properties.

You’re ready to visit your list of island homes. Ask your Pender Island Realty agent to arrange these showings. Bring along a note book and camera. Note how each property fits when compared to your needs and wants list. Ask your agent questions and record his or her answers so that you can refer back to them when comparing various properties. Take pictures.

Ask your agent to point out features that may help the resale value of the individual homes that you are viewing. Might an ocean view open up across the street in the near future? Is a built-in hot tub a selling asset on an island where water conservation is important?

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Rank the Properties you have Toured.

Revisit your notes immediately after a showing while your memories of the property are fresh. Make more notes, eliminate certain properties and rank your favourites. What did you like and didn’t like? Remember that no home is perfect. By remembering this you avoid much of the anxiety that can come with buying a home. Don’t forget to have fun.

Make an offer.

You’ve decided on the one you want; now it’s time to write a Contract to Purchase. Let your Pender Island Realty professional guide you through this detailed, legal process. You and the seller have different goals. Your agent’s experience and expertise will help facilitate a satisfactory outcome.

Arrange for a Home Inspection.

Once your offer is accepted, it’s time to arrange for a building inspection. Your realtor will provide you with a list of qualified building inspectors (see Resources). It's common to find problems, some serious and others just superficial. When asked, the building inspector will offer an approximate cost to repair the problem. If you negotiate “repairs” in the Offer to Purchase, ask for a “walk through” before finalizing the paperwork. Ask your real estate expert about home protection plans, which may save you money in the near future.

Closing the Deal.

Before your closing date, your agent will ensure that you’ve made all necessary deposits and completed the paperwork – including mortgage, title, homeowners insurance and any other paperwork required by local, regional or provincial governments. Your Pender Island Realty agent will be there to help you complete that closing checklist and avoid any last-minute snags or surprises.

Before moving in.

Some moving basics: arrange to switch BC Hydro and telephone service into your names, clean or replace the carpet and notify Canada Post of your new address.

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Especially for Out of Town Buyers

Foreign Buyers

The British Columbia provincial government does not require the purchaser of real estate in British Columbia to be of any particular residency or citizenship, however, to legally occupy a residential premise, a non-resident must comply with immigration laws and requirements. These requirements depend upon the nationality of the real estate purchaser. United States residents are permitted to occupy a residential premise in Canada for up to 180 days per calendar year. You should check with your nearest Canadian Consulate to confirm your specific rights or to enquire about residency in Canada.

Property Transfer Tax

Property purchases in British Columbia are subject to a provincial transfer tax equal to 1% of the first $200,000 and 2% on the balance. The final amount is calculated based on the "fair market value of the property," which is usually the purchase price. Buyers who have not owned property anywhere in the past are exempt from this tax. For detailed information and other exemptions, contact the Property Transfer Tax Information Line at (250) 387-0604.

Property Taxes

The primary factor determining property tax owed on a property is the assessed value of the building(s) and/or land, as determined by BC Assessment, the provincial assessment authority. The assessed value is set as of July 1 each year and is meant to reflect the market value of the property as of that date. Property owners may appeal their assessment if they think it is too high. The local Islands Trust used these assessed values to determine the rate of property tax to be levied on each property annually. School and other taxes are included in the annual tax notice. When viewing properties, buyers should make note of the current property tax amount and any new assessment information on the property.

Goods and Services Tax (GST)

Buyers purchasing a newly built home are usually subject to the federal Goods and Services Tax (GST). As of January 1, 2008 this tax is 5% of the purchase price, though a partial rebate is normally granted if the buyer will be a permanent resident. To confirm whether GST is applicable in your case, and whether there are any other issues about which you should be aware, 
contact the Canada Revenue Agency at (250) 363-0121.

Canada Revenue Agency and the local Islands Trust can also provide you with information about the implications of renting and earning income from property (e.g. capital gain on the future sale of your property). It is important to be aware of the tax implications when a non-resident property owner dies or when a property is transferred from a person to his or her company or relative, even though there may be no financial transaction.

British Columbia Medical Services Plan (MSP)

A person must be a resident of British Columbia to qualify for medical coverage under the Medical Services Plan (MSP). A resident is a person who: 1) is a citizen or lawfully admitted permanent residence of Canada; 2) makes his or her home in British Columbia; and 3)  physically resides in B.C. a minimum of six months in a calendar year. All British Columbia residents must enroll themselves and their dependents in the Medical Services Plan (MSP) and to pay the appropriate annual premiums which are determined by income. Dependents of MSP beneficiaries are eligible for medical coverage if they are residents of British Columbia.

For complete information, visit: www.hlth.gov.bc.ca/msp/infoben/eligible.html

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E-Match - Matching you and your New Home by Email

It’s easy. Just send us an Email and let us know what you are looking for in a property. If you are looking for a vacant lot or home with a view, let us know and whenever a new Pender Island real estate listing matching your criteria hits the market, it's flagged and automatically emailed to you. You’ll never miss seeing appropriate new listings that come to market on Pender Island. And unlike MLS® listings which provide a limited amount of information, we provide all of the information you will be looking for.

This e-mail notification service is offered to you absolutely free and with no obligation. Take a few moments to send us a note and Pender Island Realty will start searching for your new home or investment.

Click here to send us an email»

 

 

Mortgage Calculator

How much can I afford?

Mortgage lenders will first look at your gross household income, the amount of the down payment you have available and current mortgage interest rate. They will also factor in your current assets and liabilities.

Using this information, lenders follow two rules in determining the amount of mortgage you can afford: 1) your monthly housing costs should not exceed 32% of your gross monthly household income (housing costs include monthly mortgage payments, taxes, heating expenses and half of monthly condominium fees) and 2) your entire monthly debt load should not exceed 40% of your gross monthly income (includes housing costs, and other debts such as car payments, personal loans, and credit card payments).

Some people find these lending percentages uncomfortably high and opt for a less financially onerous mortgage amount.

Click here to CALCULATE your Pender Island mortgage payment

 

Selling Property on an Island - The Steps

The easiest and most effective way to sell your home or property on Pender Island is to enlist the expert direction of a Pender Island Realty agent. He or she will provide you with seasoned advice on how to show your property at its best which, in turn, will maximize the selling price.

A positive first impression

What will a prospective buyer see first? A well-kept yard, freshly planted flowers, a tidy, clutter-free deck and a fresh coat of paint welcome the prospective new owner. A stacked wood pile and a home that appears to have been well maintained give prospects confidence in your home. Clean up after your pet, not everyone is a pet lover.

Highlight its best attributes – it pays

Prospective buyers would prefer to see how great your home really looks than have to listen to your agent tell them how great it could look "with a little work here and there."

The most reliable way to improve your home's appeal is to enlist the services of a home staging professional. He or she will help you get everything in order - from removing the clutter to providing a thorough cleaning and repainting of particular rooms. You will get his or her fee back, and more, in the final selling price.

If you opt to be the “stager” here are a few tips. Thoroughly clean and tidy every room. Touch-up any scuffed woodwork, and repair and repaint marked or damaged walls. Consider updating the hardware on kitchen cabinets, reaupholstering or adding a new slipcover to chairs or sofas and removing window coverings. Let the sun shine in! Place a vase of fresh flowers in the entryway.

Check all light bulbs. Burned-out bulbs suggests neglect or faulty wiring. Turn on all your lights, inside and out, when showing your home, especially in the evening. Soft lighting makes people feel welcome, and adds warmth and colour to a room.

This “prep” work will pay off . . . your home will take less time to sell and will sell for more money.

And there’s more you can do

Bathrooms sell homes, yours should sparkle. Discoloured sinks and dripping water faucets suggests faulty or worn-out plumbing. Repair damaged caulking in the tubs and showers. Put your best towels, mats and shower curtains on display.

Potential buyers are always looking for storage space. Make sure your closets, attic and basement are neat, clean and free of unnecessary items. The better organized a closet, the larger it appears. If any doors or cabinets stick in your home, now’s the time to fix them.

And make your home as safe as possible. Ensure that sidewalks, stairs, decks, flooring and sometimes dangerous throw rugs are safe to walk on.

Setting the price of your property

Once your home is in tip top shape it’s time to set a selling price. The Pender Island Realty agent that you have chosen will visit your home to view the property inside and out, take measurements and discuss your financial expectations. With this information in hand, he or she will undertake a Comparative Market Analysis.

He or she will compare your home to others with similar characteristics that have sold recently on Pender Island. He or she will return with a written document outlining a couple of pricing options and a plan for how Pender Island Realty will market the sale of your property.

If you must be present for a showing

It's best if you're not there but sometimes that’s just not possible. If you must be there, of course be friendly, but stay in the background and keep the conversation to a minimum. Potential buyers want to view your home with the least amount of distraction. Your Pender Island Realty professional is best able to articulate the virtues of your home and to answer the buyers questions in the most beneficial way. He or she know the buyers needs and what they want.

Never apologize for your home's shortcomings. If a prospect makes a negative comment about your home's appearance in your presence, let your experienced Pender Island Realty agent handle the situation.

If a prospective buyer wants to talk price, terms or other real estate matters when you are present, politely ask him/her to speak to the expert - your PENDER ISLAND REALTY agent.

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Comparative Market Analysis

Looking to sell your home?

Would you like an estimate of how much your home is worth in today's growing market?

Talk to us and take advantage of Pender Island Realty's knowledge and expertise in selling your home. Get the best dollar value for your most important investment.

We look forward to meeting you to evaluate your home and property.

 

Real Estate News   March 2008 Edition (click on the image below for a printable copy)

Highlights:

Greater Victoria and Greater Vancouver markets are forecast to remain strong and stable for 2008, but there will not be the rapid acceleration in prices seen in the past four or five years. It is forecast that prices will continue to rise but at a more moderate pace.
The large majority of buyers of Pender Island real estate originate in these two major market areas so their relative slowing could affect the market here to some extent.
The number of properties for sale on Pender Island are noticeably fewer than a year ago.

ANALYSIS B.C. Real Estate Association (BCREA)
In 2008, will B.C. housing markets suffer a similar fate of many in the US? No.
While the province is not immune from the trials and tribulations south of the border, demand is expected to remain strong in markets not dependent on the forest industry.
Home sales likely won’t post any records this year—eroding affordability will see to that. However, the number of transactions is expected to be above the ten year average. Home prices still face upward pressure, but that pressure is waning. After six years of a bull real estate market, a return to more balance between demand and supply may be the best scenario for the long term.
B.C. home sales edged down in January for the first time in nine months. The combination of fewer home sales and an increase in active listings is pulling the B.C. housing market toward balanced conditions. While unit sales are no longer breaking records, consumer demand for housing is evident. The units sold last month in the province were well above the 10 year average for the month of January.
Second home purchases by equity-rich empty nesters drove up sales and prices in the recreation and retirement markets of the Kootenays, Okanagan and Vancouver Island.
Cameron Muir, Chief Economist, B.C. Real Estate Association

Real Estate News October 2007 Edition (click on the image below for a printable copy)

Highlights:

A market analysis by two leading real estate economists suggests that the Pender Island real estate market will continue to be attractive throughout 2008.

ANALYSIS Canadian Real Estate Association (CREA)
The national resale housing market will be more balanced next year [2008], but will continue to favour the seller in most provinces. Resale housing markets in Western Canada will remain the tightest [strongest] and annual increases will be greatest in that region. Gregory Klump, Chief Economist, CREA Source: Canada.com

ANALYSIS B.C. Real Estate Association (BCREA)
British Columbia’s strongest markets are in retirement and recreation areas, like the Islands [including the Gulf Islands], the Okanagan and the Kootenays.
B.C. is seeing the “tip of the iceberg” of demand by retirees. The number of people in B.C. at age 65 years or older is expected to rise by more than 250,000 in the next decade.
Many empty-nesters are now getting a head start by buying recreation properties that will serve as their retirement homes in the future. Baby boomers are continuing to hunt for retirement homes or are using the equity in their primary residences to buy a recreational property.
The market will moderate next year because of higher prices and higher mortgage rates.

Recent Articles

Strong Real Estate Sales Mark Start to 2008

Sales of homes and other properties in the Greater Victoria area got off to a solid start in the first month of 2008. There were 464 sales through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) in January, up from the 442 sales in the same month a year ago. There were 408 sales in December. Meantime, the total number of properties available for sale rose to 3,027 - a 14 per cent increase over January of last year.

Victoria Real Estate Board President, Tony Joe, says the market remains very healthy and the strong sales and increase in inventory represent good news for sellers and buyers. "There continues to be strong demand for homes that are realistically priced and the increase in the number of properties available for sale means more choice for buyers," said Joe. Joe noted that nearly 29 per cent of single family homes sold for less than $450,000 last month while nearly 37 per cent of all condominiums sold for under $275,000 in January.

Joe added that 19 sales of over $1 million had an upward impact on the average price of single family homes, "The average price of single family homes sold in January in Greater Victoria was $606,449 but it is important to note that the median price was considerably lower at $530,200." The six-month average for single family homes was $586,338. The average price of all condominiums sold in January was $349,045; the average for the last six months was $326,904. The median was again lower at $304,450. The average price of all townhomes sold last month was $423,774; the six month average was $419,926. The median price was $392,950.

MLS® sales last month included 249 single family homes, 125 condominiums, 43 townhomes and 16 manufactured homes.

Source: Victorial Real Estate Board - Feb/2008

Strong & Balanced Real Estate Market Predicted for 2008

Tony Joe, 2008 president of the Victoria Real Estate Board, says the Victoria area housing market should remain strong and stable in the coming year."During the past couple of years we have seen a return to a more balanced market. Demand remains remarkably strong and prices continue to rise, but at a more moderate pace than we have seen in recent years. Barring unforeseen circumstances, all indications point to continued strength and stability in 2008."

Joe added that the Board will enhance its efforts to "go green" in the coming year. "One of the Quality of Life principles adopted by our Board is ‘preserving the environment’ and we intend to further our efforts to promote green values as part of the real estate transaction," he said. Joe noted that the Board has had some initial discussions with the Ministry of Energy, Mines and Petroleum Resources about new ways to encourage home owners to heat their homes more efficiently. "We've volunteered to run a pilot project in Greater Victoria to inform buyers of the energy efficiency rating of various homes. We think growing public interest will prompt more and more sellers to do all they can to get their homes ‘energy-ready’ before they list for sale," said Joe.

Joe noted that the Board has also volunteered with the Ministry of the Environment to run a pilot project in our Board area to notify buyers of a home’s "water-conservation measures". "We think REALTORS® can play a key role by helping to rate a home based on its use of such items as low-flush toilets, low-flow shower heads, front-end loading washing machines and the use of grey water and rain water," he added.

The 2008 Board of Directors is as follows: Tony Joe - President; Chris Markham - President Elect; Bev McIvor - Past President; Carol Crabb - Secretary-Treasurer. Other Directors are: Jane Logan, Randi Masters, John McVie, John Smith and Lorraine Stundon. The 2008 Directors take office effective January 1

Source: Victorial Real Estate Board - December 7, 2007

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Helpful Links

Victoria Real Estate Board
MLS Listings
Canada Mortgage & Housing Corporation
Bank of Canada
Insurance Bureau of Canada
British Columbia Real Estate Association