Road map to real estate ZoomBookmarkSharePrintListenTranslateBuying guide walks first-time home owners through process It’s a buyer’s market out there and first-time home buyers who resisted the urge to take the plunge when the market was hot are now finding good things come to those who wait.

DEBRA BRASH, TIMES COLONISTMatt and Nicola Priestly rented while many of their friends were plunging into a high-priced real estate market. Now the young couple has been able to buy a home in Langford for a more affordable price.

Softening home prices, a larger number of homes to choose from and lower interest rates all help to make home buying more affordable and a lot less stressful for those deciding to buy their first home.

First-time buyers such as Matt and Nicola Priestly had been watching in the market, but held back in the past two years because of soaring prices.

“We decided to ride it out,” says Nicola, 25, a teacher. “We just socked away one of our incomes towards our down-payment.” Their patience was rewarded recently when the couple finally bought a house that had been languishing on the market for about four months. They managed to shave $50,000 off the $450,000 asking price of a three bedroom, two-bath house in Langford from the motivated seller.

“Waiting gave us the upper hand,” says Matt, 30, who works at Costco. “Over the years, we watched as a bunch of our friends bought when the market was hot. We’re glad we didn’t.”

The couple found it refreshing to be able to take their time, confident that there would not be any bidding wars on properties they were interested in.

As first-time buyers, the Priestlys get an added benefit by getting a break on paying the B.C. property transfer tax. Under the First Time Home Buyers Program, which was introduced in 1994, they can claim an exemption to the tax if the fair market value of the home is less than $425,000. The tax, which is one per cent for the first $200,000 and two per cent of any amount over that limit, would have been $6,000 on their $400,000 house.


“Buyers today know they have the upper hand,” says Carolyn Heaney, a mortgage manager for the Bank of Montreal. “They know they don’t have to feel rushed in this market. These are the same individuals who have been sitting on the fence, waiting for the market to correct. These were the people who had traditionally rented but decided to act when they could see they could convert their $1,600 to $1,800 in rent into a mortgage payment instead.”

Banks are quick to recognize a growing market. To reach this market, the Bank of Montreal has introduced a reference guide, BMO First Home Essentials, that walks a novice through the home-buying process. The Priestlys say they got good tips and value from the guide, which can be ordered from the bank.

But while most people assume first-time buyers are young individuals and couples, some who are looking for their first home today are older, sometimes in their 50s.

“Even if they are older they all face the same issues,” says Heaney.

“Affordability and finding enough for a down payment are common to all age groups.”

Despite an industry-wide slowdown, realtors are reporting a lot more activity this winter, a season when business is usually quiet.

“People know money is cheap,” says Tony Joe, a realtor and past president of the Victoria Real Estate Board. “The cumulative savings on tax, lower house prices and interest rates are bringing out people who previously were not able to qualify.” But don’t expect to be able to steal a property, says Joe. He points out the properties that have the biggest discounts lately are frequently those that have been on the market the longest.

Victoria’s stable economy and low unemployment means few sellers are in financial distress, leading to a more orderly decline than in other parts of the country.

But he does say the real estate landscape has changed. In a strong market, the most recent sale would be seen by the market as the floor for subsequent (higher) prices.

In today’s market that same sale would be the benchmark for the ceiling. It indicates to sellers that the list price for their property has to be under the ceiling in order for it to have any chance of selling quickly.

“If priced right, a newly-listed property can still sell in six to eight days at close to, or slightly below, the asking price in today’s market,” says Joe.

This renewed surge is far from over, according to experts. Although many, like the Priestlys, have already bought, banks report they still have a significant number of pre-approved mortgages still on their books. These represent individuals and couples who have been approved for a loan but have yet purchased a house yet.

“There are some who think the market can still come down a bit more,” says Heaney. “They are waiting for the other shoe to drop.”




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