REAL ESTATE, A GUIDE TO BUYING
Buying a home, whether it's your first time or as an existing homeowner, is a little overwhelming and it’s easy to get swept up in the excitement. So here is a guide to help you navigate the ups and downs of buying real estate.
Visit a financial institution and get pre-approved for a mortgage to figure out how much you can afford. With the new mortgage rules, it's more important than ever to obtain a pre-approved mortgage even before starting your search. Not only will a pre-approved mortgage reward you with interest rate protection during your home search, it will help give you a realistic perspective when determining your options. I have seen a number of deal fall apart, especially in a fast market as the property sells before you can get your financing in order. Mortgages are not as simple as going to an ATM.
Seek qualified, professional help through a real estate agent. This helping hand won’t cost you a dime since the seller pays the commission. Often when people try and ‘figure it out’ on their own, they end up with a lot of additional after closing costs. A full time agent knows the market, have seen a lot of the homes already, knows the property history and knows what to look for to mitigate after closing risk.
Find an agent with a successful and proven track record who understands your situation and can assist with what’s best. Not all agents are created equal. Some are better at hand holding, others negotiations, others the long term view. You want to find an agent (such as me, hint, hint) who has a very solid background in negotiations and the ability to find you what you need. It’s all about getting the best deal for you, that’s what we do! If you're thinking of buying new from a builder instead, your real estate agent will be happy to investigate the many builders who co-operate with brokers and take you personally to several sales offices.
What to consider before looking. Before you even start to look for a home, the first thing to do is seek financial advice and qualification. Check your credit rating by calling either Trans Union of Canada or Equifax Credit Information Services Canada.
The home search. Understand the best location for your investment and weigh your options. Even if you have a pre-determined notion of what kind of home you would like, keep an open mind and be prepared to see a variety of housing styles -- everything from a new downtown condo to a 25-year-old bungalow. Many times I have been told a specific list for a house, within a set area and they end up loving a place that is outside of those limitations. Once we get to know you a bit our experience lets us see the ideal match. You may have discounted an entire neighborhood because of perception, only to find out that it was just a small section of that neighborhood many kilometers away that had issues and the rest is a nice area with lots of playing children, parks and other awesome amenities. Other items to think of are the Land Transfer Tax’s and the potential replacement of large ticket items such as the roof, windows, or furnace and will play a part in making such a decision.
Keep the future in mind. Buyers need to be aware of future developments that will positively or negatively affect resale value. For example, if there is a large vacant lot surrounding a subdivision of homes, consider if it will this site be a future school, strip mall or gas station. Your realtor will be able to research this for you. Often shifts in government policy lead to a boom or bust in certain areas. Ensure that your agent knows about these district plans, after all selling real estate is not just about the single house. With my clients I often discuss the 3 year, 5 year and 7 year plan to figure out the best way to get what they want out of life, using real estate as just one component of that plan. An overall picture helps to understand motivations and get you results!
Consider estate sale/power-of-sale properties. If you consider yourself fairly handy and are looking for a fixer upper, then estate sale and power-of-sale properties are something to think about. In an estate sale, the standard clauses on the 'agreement of purchase and sale' are kept to protect both buyers and sellers. In a power-of-sale, several standard clauses are scratched out, no inclusions are allowed and the properties are sold as-is. Under the guidance of an effective agent this can be an excellent option. On your own, I would recommend you avoid this scenario as it has a lot of nuances to it and mistakes are easy.
Don't forget the taxes. If you are looking at new builds, be aware that they often need to charge GST. That’s very important as that can add a lot of cost to your final out of wallet expense. When buying from another party and not a builder you still need to budget the taxes on the home inspection, legal fees, moving costs and other related expenses. It all adds up, so plan ahead.