YOU DESERVE EXTRAORDINARY SERVICE
We understand that you’re embarking on one of life’s biggest decisions.
That means, you need sound advice with the experience and expertise to back it up. No matter where you are or where you want to live, you can count on us for unsurpassed local market knowledge and a vast referral network. When you see our Royal LePage sign on a lawn, you know it’s a sign you can trust, because Helping You is What We Do.
If you’re buying a home, here are some of the things that we will do:
• educate you about the current market conditions
• discuss and analyze your wants and needs against your budget
• guide you to homes that fit your criteria
• coordinate the work of other professionals you’ll need during the process
• negotiate with the seller on your behalf
• ensure paperwork is fully completed, accurate and that deadlines are met
• work with you to resolve any challenges that may arise
8 STEPS BUYER’S GUIDE
Step 1: Deciding to Buy
To buy a home, you need to be prepared and we are here to help you. Here are a few things to consider:
- Define your needs and wants– make a list of the things you simply can’t live without, like the number of bedrooms and bathrooms your family needs, proximity to schools and work, or storage needs. Then list some nice-to-haves: maybe a pool or deck, finished basement or mud room. This will help you further down the road when you start looking at homes.
- Brush up on types of home ownership– make sure you know the difference between freehold (it’s all yours), condo (you take care of the inside and pay fees to an association to look after the common areas and maintenance) and co-op (similar to condos but instead of “owning” your unit, you buy shares in the whole building and pay maintenance and repair fees).
- Understand market conditions– supply and demand can change from neighbourhood to neighbourhood, region to region. So, getting to know the market can help you get more bang for your buck.
Step 2: Choosing us as your Agent
Buying a home is personal and emotional. So the relationship with your real estate agent has to be built on expertise, trust and mutual respect. After all, we will be acting as your eyes, ears and voice throughout the process. We have a fiduciary duty to act in your best interests, to be completely transparent and accountable to you.
Here’s what we will do:
- Educate you about the current market conditions
- Discuss and analyze your wants and needs against your budget
- Guide you to homes that fit your criteria
- Coordinate the work of other professionals you’ll need during the process
- Negotiate with the seller on your behalf
- Make sure all the required paperwork is fully completed, accurate and that deadlines are met
- Work with you to resolve any challenges that may arise
Step 3: Understanding Financing
Like many things in life, planning ahead is the key to success. So, you should know the price range you can afford before you start shopping. Here are a few things to keep in mind:
- Down payment– this is usually the percentage of the total cost of a home that you’ll need to pay. The more money you put down, the more money you’ll save on monthly payments and, in the long run, interest paid.
- Knowing what you can afford– how much house you can afford comes down to 3 factors: your monthly mortgage payment, your down payment and the amortization period or length of time it will take to pay off the loan.
- Getting pre-approved– this will really help you figure out what you can spend on a home because you’ll know before you start shopping. And you’ll be protected against rising interest rates as well.
Step 4: Finding the Right Home to Buy
So now it’s time to get out there and find your dream home. Most people start off by having a neighbourhood in mind but a great agent may suggest options that you may not have thought of. Here are some considerations as you set out to house hunt:
- Choosing the right neighbourhood– Do you need to be close to schools, public transit, highways or where you work? Those can be huge factors when choosing an area to live. And let’s not forget proximity to other amenities like parks, grocery stores, doctors and recreational centres. Drive around and check out the appearance of other homes in the area. Are they well taken care of? Of course, your agent will be able to inform you of property values in the area and how they’ve changed over the years.
- House hunting– the hunt can be a lot of work but it can also be a lot of fun. So when you visit homes, go with a partner – spouse, parent, friend – because two sets of eyes are better than one. Don’t be shy about asking some tough questions regarding the home. Take some pictures or video on your smartphone so you can reference it later. And remember that wish list you made? It will come in handy now
- View open houses with open eyes– curb appeal is one thing but try not to focus on the bells and whistles. Keep a lookout for things like doors and windows (are they new/old?), water leaks, squeaky floors, soggy areas around the yard that indicate poor drainage and could lead to a wet basement, missing shingles, lighting, etc. You’ll be getting a home inspection later, but it doesn’t hurt to start with your own observations
Step 5 : Making an Offer on a Home
You’ve fallen in love. But it’s important that you don’t let your emotions get the better of you when making an offer. Remember, real estate is an investment. Fortunately, we are here to help you put together an Offer to Purchase and discuss all the details. These are a few things you should know:
- Not all offers are the same– the main factors on most offers will include price, deposit, terms (which includes financing details), conditions, specific items that are included or not with the home and the closing date. From there, you can decide to make a “firm” offer which means that you’re willing to buy the home exactly as it is. Or, you could make the offer “conditional” on things like a home inspection, approval of financing or the sale of your existing home
- Negotiating may come into play– the seller will either accept your offer, reject it or make a counter offer based on things like price, closing date or other conditions. While receiving a counter offer may be unsettling, keep in mind that we have plenty of experience to help you. Some good tips for negotiating are: making sure what you’re asking for is fair and equitable; be polite and collaborative; hold fast to your “needs” and be flexible on your “wants”; and know when to walk away no matter how hard that may be.
Step 6: What to do Before Buying a House
In addition to using us as your real estate agent, you will now need to bring in a few pros to help get you to the finish line and make sure the investment you’re about to make is sound. We can put you in touch with these people and make recommendations. Here are a couple of key people you should be talking to:
- A home inspector– an absolute must in saving you from some unpleasant surprises later on. A home inspector will check your property for any structural damage; perform a thorough examination of the heating and cooling system, plumbing and electrical systems, the roof, attic, walls, ceilings, floors, windows, doors, foundation, basement and more; then prepare a complete written report detailing all their findings
- A legal professional– when it comes to complex legal documents, it takes a lawyer experienced in Canadian real estate law to help make sure that you and your investment are protected. A real estate lawyer will review the agreement of purchase and sale, do a property title search, check that your home complies with current building and zoning codes, ensure utilities and property taxes are paid up, review the mortgage agreement, and get all the paperwork ready for closing
Step 7: Closing on a Home
Closing day is the day you officially take ownership of your new home. It’s an exciting time for sure. But there are a couple of details you need to keep in mind before you get handed the keys:
- Closing costs– these fees need to be paid by or on the closing day and include mortgage application fees, inspections, legal fees, insurance, registration and more.
All these costs might make your head spin. But you can take solace in the fact that using as your real estate agent will be a great help in managing all of this and get you to your last step…
Step 8: Home Moving Tips
The day has arrived. And there will be as much excitement as there will be sore backs. But you can take the pain out of moving day by planning ahead. Here are some tips for a smooth move:
- Make a moving checklist that details a plan for things that need to be done weeks before you move all the way up to moving day itself
- Plan for packing by clearly labeling boxes with the rooms they are to go to. You might even want to provide a small floorplan for the movers so they know exactly where to take them
- Make sure you get competitive quotes from reliable moving companies. Or, to save money, find out how much it would cost to hire a moving van yourself (And bribe your friends to help you)
- If you own your current home, cancel your cable and utilities and transfer any rented appliances (like water heater or furnace) to the new homeowners. While you’re at it, make sure to have the gas, electricity, cable and phone hooked up at your new home
- Inform your key contacts– work, Canada Post, doctors, friends, pharmacy, etc… – of your change of address
- If you have children, make sure you talk to them and explain why you’re moving and reassure them that the friends they’ve made can continue to be their friends. Ask for their opinion too on things like what colour to paint their rooms. Try and make it exciting for them
- On moving day, plan an easy meal like picking up some take-out. Moving is stressful enough without having to cook
10 COMMON BUYER’S MISTAKES
Shopping for a home is exciting, exhausting and a little bit scary. In the end, your aim is to end up with a home you love at a price you can afford. Sounds simple enough, right? Unfortunately, many people make mistakes the prevent them from achieving this simple dream. Arm yourself with these tips to get the most out of your purchase and avoid making 10 of the most costly mistakes that could put a hold on that sold sign. Investopedia
- Not Knowing What You Can Afford
As we’ve all learned from the subprime mortgage mess, what the bank says you can afford and what you know you can afford or are comfortable with paying are not necessarily the same. If you don’t already have a budget, make a list of all your monthly expenses (excluding rent), including vehicle costs, student loan payments, credit card payments, groceries, health insurance, retirement savings and so on. Don’t forget major expenses that only occur once a year, like any insurance premiums you pay annually or annual vacations. Subtract this total from your take-home pay and you’ll know how much you can spend on your new home each month. When calculating this figure use a mortgage calculator to research current interest rates. This will give you an estimate of what your total mortgage payments will be.
If you end up looking at homes that are outside your price range, you’ll end up lusting after something you can’t afford, which can put you in the dangerous position of trying to stretch beyond your means financially or cause you to feel unsatisfied with what you actually can afford. You may even learn that you can’t afford the type or size of home that you desire and that you need to work on reducing your monthly expenses and/or increasing your income before you even start looking.
- Skipping Mortgage Qualification
What you think you can afford and what the bank is willing to lend you may not match up, especially if you have poor credit or unstable income, so make sure to get pre-approved for a loan before placing an offer on a home. If you don’t, you’ll be wasting much time and effort to discover later that the bank won’t lend you what you need, or that it’s only willing to give you a mortgage that you find unacceptable.
Be aware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, like finance a car purchase. If you cause the deal to fall through, you may have to forfeit the several thousand dollars that you put up when you went under contract.
- Failing to Consider Additional Expenses
Once you’re a homeowner, you’ll have additional expenses on top of your monthly payment. You’ll be responsible for paying property taxes, insuring your home against disasters and making any repairs the house needs (which will occasionally include expensive items like a new roof or a new furnace).
If you’re interested in purchasing a condo, you’ll have to pay maintenance costs monthly regardless of whether anything needs fixing because you’ll be part of a homeowner’s association, which collects a couple of hundred dollars a month from the owners of each unit in the building in the form of condominium fees.
- Being Too Picky
Go ahead and put everything you can think of on your new home wish list, but don’t be so inflexible that you end up continuing to rent for significantly longer than you really want to. Homebuyers often have to compromise on something because their funds are limited. You may have to live on a busy street, accept outdated decor, make some repairs to the home, or forgo that extra bedroom.
- Lacking Vision
Even if you can’t afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford. If the home otherwise meets your needs in terms of the big things that are difficult to change, such as location and size, don’t let physical imperfections turn you away. Besides, doing home upgrades yourself, even when you have to hire a contractor, is often cheaper than paying the increased home value to a seller who has already done the work for you.
- Being Swept Away
Minor upgrades and cosmetic fixes are inexpensive tricks and are a seller’s dream for playing on your emotions and eliciting a much higher price tag. Sellers may pay $2,000 for minimal upgrades or pay several thousand dollars on staging. If you’re on a budget, look for homes whose full potential has yet to be realized. Also, homebuyers should always look for a house they can add value to, as this ensures a bump in equity to help you up the property ladder.
- Compromising on the Important Things
Don’t get a two-bedroom home when you know you’re planning to have kids and will want three bedrooms. By the same token, don’t buy a condo just because it’s cheaper when one of the main reasons you’re over apartment life is because you hate sharing walls with neighbors. It’s true that you’ll probably have to make some compromises to be able to afford your first home, but don’t make a compromise that will be a major strain.
- Neglecting to Inspect
It’s tempting to think that you’re a homeowner the moment you go into escrow, but not so fast – before you close on the sale, you need to know what kind of shape the house is in. You don’t want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs. Keeping your feelings in check until you have a full picture of the house’s physical condition and the soundness of your potential investment will help you avoid making a serious financial mistake.
- Not Choosing to Hire an Agent or Using the Seller’s Agent
Once you’re seriously shopping for a home, don’t walk into an open house without having an agent (or at least being prepared to throw out a name of someone you’re supposedly working with). Agents are held to the ethical rule that they must act in both the seller and the buyer parties’ best interests, but you can see how that might not work in your best interest if you start dealing with a seller’s agent before contacting one of your own.
- Not Thinking About the Future
It’s impossible to perfectly predict the future of your chosen neighborhood, but paying attention to the information that is available to you now can help you avoid unpleasant surprises down the road.
Some questions you should ask about your prospective property include:
- What kind of development plans are in the works for your neighborhood in the future?
- Is your street likely to become a major street or a popular rush-hour shortcut?
- Will a highway be built in your backyard in five years?
- What are the zoning laws in your area?
- If there is a lot of undeveloped land? What is likely to get built there?
- Have home values in the neighborhood been declining?
If you’re happy with the answers to these questions, then your house’s location can keep its rose-colored luster.
The Bottom Line
Buying a first home can seem stressful and overwhelming, and it isn’t without its share of potential pitfalls. If you’re aware of those issues ahead of time, you can protect yourself from costly mistakes and shop with confidence.
For many people, a home is the largest purchase they will ever make, but it need not be the most difficult.