Guide to Buying Your First Home in Kelowna

Welcome to my Guide to Buying Your First Home!

We’ll go through things step by step so you’ll know what to expect. We’ll then examine some of the advantages and pitfalls of Buying now versus waiting until next Spring, together with the current Provincial and Federal government incentives available.

Let’s dive in!

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Guide to Buying Your First Home: The Home-Buying Process.

Before you Start Your Search

1. Assess Finances:

• Obtaining financing is becoming a more complicated & lengthy process than it used to be. Ask your Mortgage Professional (Bank, Credit Union or Mortgage Broker), at the start, how much mortgage you can afford.
• What deposit should you put down and the maximum house price that you should be considering?
• Where will your deposit come from? E.G. Savings, Parents, and other sources.
• Obtain a Pre-Approval – this makes the home-buying process less time-consuming & stressful. You will need to gather the necessary documents: proof of income, tax returns, and bank statements and complete an application with your Financial Advisor. Also, make sure you have a budget planner completed, or at least know what your monthly income and expenses are.

2. Research options:

• Investigate mortgage types (fixed vs. variable, terms, etc.).
• Explore government incentives for first-time buyers.
• Create a ‘Wants & Needs’ List for your New Home – think about ‘must haves’, such as size, location, price, quality of finishing, transit nearby, etc and what might be a ‘deal breaker’.

3. Make a List of Costs:

• Make sure you are aware of all the costs you will incur during the course of your purchase E.G. Property Purchase Tax, Lawyers Fees, Appraisal Fees, Property Inspection Costs, Bug & Termite Inspection Fees, is GST applicable, City Taxes, Utility Costs & Strata Fees payable.

4. Define Your Priorities:

• List must-haves vs. nice-to-haves (e.g., location, size, amenities).
• Research neighbourhoods for schools, amenities, and commute times.

5. Choose a Real Estate Agent

• Choose an experienced agent familiar with the local market (e.g., Kelowna).
• Discuss your needs and expectations with your Agent.
• Read my article Do you really need to use a Real Estate Agent to Buy your Home
• Make sure you can allot sufficient time to view homes with your Agent, as this can be a time-consuming process sometimes.

6. Choose a Lawyer or Notary:

• Ideally choosing your Lawyer before you start the process is a good idea so that you can ‘build in’ that cost.
• Remember to tell your Agent who you will be using.

During the Offer Process

1. Search for Properties:

• Attend Open Houses and view homes with your Agent.
• Take notes to compare options.
• Ask about the property’s history, condition, and recent upgrades.
• If Buying in a Strata, ask how much the monthly Strata Fees are and what is in the Contingency Reserve Fund.

2. Make an Offer:

• Review comparable property prices with your agent.
• Include all your ‘due-diligence’ conditions for financing, inspection, and appraisal, etc, and the terms of your offer. Your Agent will make recommendations of what terms and conditions to include, in order to protect you.
• Be prepared to negotiate on price, conditions, & / or closing date.

3. Schedule a Home Inspection

• Hire a qualified inspector to check for structural or system issues.
• If needed your Agent will be able to provide you with some suggestions for you to get quotes from.
• Undertake the inspection as soon as your financing has been agreed.
• Review the inspection report carefully and renegotiate if needed.
• Also, consider a Termite Inspection and a Radon Test.
• Permit your property Inspector to share the report with your agent. Sometimes there will be items that come up in the inspection that the agent will need to negotiate with the seller on your behalf.

4. Secure Financing:

• Immediately advise your Bank / Mortgage Broker that the deal is now confirmed. Your Agent will often need to work closely with your Mortgage Broker and/or Bank, so make sure you let them know they are acting as your Real Estate Agents. If you need your Agent to send a copy of the contract through to them let the Agent know.
• Lock in an interest rate if possible.
• Finalize your mortgage approval with the lender. This should be in writing.

5. Lawyer to Review Contract and Title

• Ask them to review the Contract, Title and any other relevant documents before you remove your subjects.
• Book your appointment to sign documents about 2 weeks before closing.
• Your Agents Conveyance Department will send all the documents through to your Lawyer / Notary.

6. Obtain a Quote for Fire Insurance.

• This is especially important if you are purchasing a home during fire season here in the Okanagan. If there is a forest fire within say 50 km of your new home, you may not be able to gain insurance.
• Make sure your agent has put a clause in your contract to cover contingencies if there is a flood or wildfire during your purchase.

7. Life Insurance

• whilst this is optional, it is something you should consider.

8. Review Strata Documents

• If you are purchasing a Condo or Townhome review all Minutes, By-Laws, Rules, Financials and Depreciation Reports. See my Questions to ask when Buying Strata Property in British Columbia

9. Moving Van / Moving Company

• Once you have removed subjects book your Movers or Moving Van early to avoid disappointment, as they do get busy at certain times of the month and/or year.

10. Give Notice to Your Current Landlord.

• If you are currently living in rental accommodation, make sure that you arrange to give the correct amount of notice to your Landlord.

Just Before Closing

1. Ensure that you have arranged for your funds to be available for a deposit and down payment.

• Make sure you have given the correct notice if your funds are in a term deposit.

2. Prepare for Move-In

• Arrange for utilities (electricity, water, internet) to start on closing day.
• Schedule movers or rent a truck.
• Start packing and labelling boxes clearly.

3. Final Walk Through

• Ensure all agreed repairs have been completed.
• Verify the property is in the agreed-upon condition.

4. Buying in a Strata Complex

• Make arrangements to advise the Strata Manager that you are moving in. They will advise you on the procedure for paying future Strata Fess and moving in. Sometimes you need to have an Elevator Key, for the move.

5. Set up / Cancel Utilities

• Now is the time to set up Water, Electricity, Gas, Phone, Cable and Internet.
• Make sure you cancel your utilities in your current accommodation.

6. Forwarding Mail

• Consider setting up Mail Transfer.

7. Appointment with your Lawyer or Notary

• Sign all necessary documents with your Lawyer or Notary.
• Transfer funds for the down payment and closing costs.

8. Prepare to change your Driving Licence address

Possession Day

• Keys: Your Agent will arrange to collect the keys to your new home and will meet you at the Property.
• Check that you have all Keys, Front Door Fobs & if moving into a Condo, Post Box Keys & Garage Remotes.
• Walk-Through: while you are with your Agent, undertake a thorough walk-through of the home together to make sure the home is in the condition you had expected it to be in and make sure all the appliances, furnace and air conditioning are in full working order.

 

DOWNLOAD: First Time Buyers Checklist  

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Guide to Buying Your First Home: Should you Buy Now versus Wait Until Spring in Kelowna?

1. It’s a Strong Buyer’s Market
The Kelowna’s real estate market is favouring Buyers right now. We have increased inventory (especially condos) and more motivated Sellers. That can mean more options and leverage to negotiate prices, terms, or even extras like upgrades and closing costs. Once Sellers start to get more showings as we head into Spring, they are likely to become less willing to negotiate, especially on price.

2. Few Bidding Wars
The colder months generally see fewer ‘out of town’ buyers actively searching in Kelowna, reducing competition and making your home-buying experience less stressful.

3. Government Support = Big Savings
There are several Federal and Provincial programs for first-time buyers which is great news. These incentives can cut down your upfront costs, lower your mortgage, or even provide tax breaks (we’ll unpack them below!).

4. Rate Locking for Stability
Mortgage rates remain higher than they’ve been in recent years, but pre-approving a rate now protects you from potential changes and helps with budgeting.

Guide to Buying Your First Home: What You Need to Watch Out For.

1. High Monthly Costs
Continuing higher interest rates mean higher mortgage payments. Make sure your budget can handle the squeeze without sacrificing essentials—or your social life! If not, you may need to wait until interest rates come down further.

2. Slow Equity Growth
Don’t expect your new home’s value to skyrocket immediately. Kelowna’s market is steady, not soaring, so think of this as a long-term investment.

3. Hidden Expenses Add Up
Beyond the deposit, prepare for closing costs, inspections, legal fees, and moving expenses. A cushion of 2-4% of the purchase price is a good rule of thumb.

4. Flexibility is Key
Buying your first home means committing to the unknown—interest rates, market trends, and your future plans. Be prepared to roll with it.

Guide to Buying Your First Home: First-Time Buyer Incentives

Buying your first home in Kelowna is easier with these programs designed to save you money and expand your options:

1. Home Buyer’s Plan (HBP)
Tap into your RRSP savings:
What It Does: Withdraw up to $35,000 tax-free for your down payment.
Why It’s Great: Use your own savings to cut upfront costs without penalties.
Payback: Replenish the funds over 15 years to avoid additional taxes.
Explore the HBP

2. BC Property Transfer Tax (PTT) Exemption
Slash your closing costs:
What It Does: Exempts you from the property transfer tax on homes priced under $500,000.

And the property must:

• Only be used as your principal residence
• Have a fair market value of $835,000 or less (effective April 1, 2024)
• Be 0.5 hectares (1.24 acres) or smaller, and
• Contain only residential improvements

Why It’s Great: Saves you up to $8,000 on a $500K home!
Read more about PTT

3. GST New Housing Rebate
Cut GST costs on new builds:
What It Does: Offers a partial rebate on the 5% GST for homes priced under $450,000.
Why It’s Great: Keeps those extra costs from breaking the bank.

Read more

4. Insured Mortgage Limits
Good news for buyers:
What It Does: Recent updates to CMHC’s insured mortgage caps mean more homes in Kelowna are eligible. The Government is increasing the $1 million price cap for insured mortgages to $1.5 million, effective December 15, 2024. this will help more Canadians qualify for a mortgage with a downpayment below 20 per cent.
Why It’s Great: Easier qualification and lower down payment options.

How Much Will You Need for a Deposit?

Minimum Down Payment:

5% for homes up to $500,000.
– 10% on the portion of the price between $500,000 and $1 million.

Why It Matters: Prepare for these thresholds while accounting for additional costs like mortgage insurance if you’re below 20%.

 

Should you Buy Now or Wait Until Spring?

Kelowna is full of opportunities for first-time buyers who play it smart. By leveraging incentives, capitalizing on a slower market, and locking in rates, you can make your first home a solid financial move.

But don’t wait too long—if rates drop in 2025 (as predicted), competition could heat up again, especially with more affordable homes & homes with suites, driving prices higher.

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Ready to Start Your Journey? Let’s Connect!
Do you have questions about buyer programs, deposits, or finding the perfect neighbourhood? I’ve got answers! Reach out today, and let’s make your first-home dream a reality!

Trish Cenci Tel 250 864 1707

Contact me here