Buyer's - Frequently Asked Questions (FAQ)Q: As a Buyer should I have my own Realtor rather than use the listing Realtor?A: Realtors are involved in the majority of typical Real Estate Transactions - in most cases there's a Seller’s Agent (aka Listing Realtor) and a Buyer’s Agent (Realtor). Please read on...The very first thing a Seller does is select who they feel will be the best Listing Realtor to market their property and help negotiate the selling price when an offer(s) come in. If you hope to get the absolute best deal possible as a Buyer, you should have your own (Realtor) representation; someone who will truly look after YOUR best interests.When you deal directly with the Listing agent of a property be aware they have a fiduciary (held, given in trust) duty to the Seller to get them the most amount of money they can for that property. They cannot provide you with any information that would jeopardize that duty and responsibility to the SELLER. Both Buyer & Seller Agents (Realtors) are paid for their services from the proceeds of the sale by the SELLER of the property when the home is purchased. In essence the SELLER is paying for an agent to represent the BUYER to negotiate a lower purchase price and more favorable conditions/terms from their own SELLER agent!....go figure.As your Buyer Agent my service and expertise to you the buyer is FREE! Before we submit an offer together, I can provide information to you that the Sellers agent may not. I will do a Comparative Market Analysis of the area to ensure that the property is not overpriced based on market activity and the price of your offer reflects the market conditions at the time of the offer and you are getting value.
I guide you every step of the way through the close, the completion and to final possession.
Q: Should I get pre-qualified for my mortgage before I start looking?A: In a word...YES! Actually, your FIRST step is one most home buyers don’t necessarily think of – Get Thee to a Lender! You’re excited about the idea of owning a home and you’re thinking about areas of town you like, what style of home, etc…. oh yeah, and the price range you think you can afford. You want to check out properties (lots of houses) right now! – on the Internet, at open houses, and in person. To the Buyer who hasn't been properly educated "finding the perfect house" before getting pre-approved seems like a good idea.
Lending rules have changed significantly over the past couple of years. Sitting down with a professional Mortgage Broker or Mortgage Specialist is critical– it will save you time, reduce frustration, and allow you to move forward with confidence, knowing that you can actually buy that dream home you're putting an offer in on.By getting pre-approved, you will know:
Exactly what you can afford (this means how much money the bank is able to lend you).
If you have enough money for the down payment and closing costs.
If you don’t have enough money, how will you get it and where will it come from.
If you have any ‘credit issues’ and what you might need to do about them in order to get a loan.
The paperwork the bank is going to need to approve a loan.
The time frame it will take to get a loan approved.
Once you have this knowledge, you can then get a good idea of the area of town that has the type of home in the price range you are qualified for….and then the fun begins!
Q: What is actually in an Offer to Purchase?A: When it comes time to make an “Offer to Purchase” I will provide current
market information and assist in drafting and communicating the offer to the seller
or seller's agent.
Price - Depending on the local market conditions, comparative information and your opinion of value, the price you offer may be different from the seller’s asking price.Deposit - The deposit shows your good faith and will be applied against the
purchase of the home when the sale closes. The deposit is typically due when you remove your conditions (subjects) and the amount varies, depending on the purchase price of the property.Terms - Includes the total price offered, amount of the deposit, included items, etc.Conditions - These might include for example “subject to” ; home inspection, financing, buyer selling their property, title search, etc.Closing & Possession Dates - On closing day the title of the property is legally transferred and the transaction of funds is finalized—Possession Date is usually 1-3 days after the closing.
Q: If you have a current home - Should we Buy first or Sell first?A: If you are considering looking for a new house, and are a current home-owner, then chances are you’re wondering what your strategy should be: do you wait to find the perfect new home before you put your current home on the market, or do you sell first and then look around? You have a few options. Use the following as a guide to explore what might be the best move for you.
There are several benefits to selling your current house before searching for your next home. So before you opt to sell first, you should determine whether you have alternate, temporary options, in case you have to move from your house before you’ve found a new one. How would you and your family deal with living in a transition home for an undetermined period of time?
With your house SOLD you know exactly how much money you have to work with
With a firm price range, you’ll be able to narrow the pool of houses before you start looking.
Able to immediately make firm offers on houses you are serious about purchasing.
First in line with unconditional offer you know you can afford.
Leverage negotiating with Sellers as they take unconditional offers more seriously.
Wider opportunity to look around, negotiate, and find the best deal and fit for you and your family.
If you don’t find the right property before the closing date of your home you may have to secure temporary housing until you find the right home.
Make sure you are familiar with all aspects of the financial reality this scenario would create before you purchase another home. You should get afinancial appraisal or market evaluation of your home prior to putting it on the market, but this doesn't guarantee the price you will ultimately receive for the home after the negotiation process has run its course.
Allows you to react immediately to a specific property, a good deal, or a very unique opportunity.
Could be financial burden by financing two properties before yours is sold.
Jumping into a purchase could be a gamble, particularly if your budget is tight.
Stressful situation by gambling as to when your home will sell and for exactly how much after negotiations.
You may be forced to sell your existing home at a reduced price in order to align closing dates of both properties.
An additional option involves making your offer to purchase conditional upon the sale of your current property within a specific period. Make sure you are familiar with all aspects of the financial reality this scenario would create before you purchase another home. You should get a financial appraisal or market evaluation of your home prior to putting it on the market, but this doesn't guarantee the price you will ultimately receive for the home after the negotiation process has run its course.Q: What are the typical out of pocket expenses expected to be?A: Budgeting for a new home can be tricky. Not only are there mortgage installments and the down payment to consider, there are a host of other—sometimes unexpected—expenses to add to the equation. The last thing you want is to be caught financially unprepared, blindsided by taxes and other hidden costs on closing day.
These expenses vary: some of them are one-time costs, while others will take the form of monthly or yearly installments. Some may not even apply to your particular case. But it’s best to educate yourself about all the possibilities, so you will be prepared for any situation, armed with the knowledge to budget accordingly for your move. Use the following list as a guide only to determine which costs will apply to your situation prior to structuring your budget:
GST: NO GST is payable on pre-owned homes.Deposit: Usually 5% of purchase price payable when conditions are removed. Deposit is part of the purchase price.Home Inspection: Optional to the buyer but recommended. ($350 - $750) depending on type of home (mobile,condo,townhome,detached). Call around for estimates.Appraisal: Your lending institution may request an appraisal of the property. ( $250 - $500 ).Survey fee: May be required by your mortgage lender( $200 - $300). The cost for this survey will be your responsibility.Legal fees and Disbursements: A lawyer should be involved in every real estate transaction to review all paperwork. Experience and rates offered by Lawyers range quite a bit. ( $700 - $1000+).Homeowner’s insurance: Your home will serve as security against your loan for your financial institution. You will be required to buy insurance in an amount equal to or greater than the mortgage loan.
BC Land transfer (purchase) tax: This tax applies where there is a change in registered owner of a property. The tax imposed at a rate of 1% on the first $200,000 of the fair market value being transferred and 2% of the balance of the fair market value. Note some conditions and exceptions may apply.Moving expenses: Expenses vary greatly here. Get estimates unless you are moving on your own.Service charges: Utilities you arrange for at your new home, such as cable or telephone, may charge an installation fee.Adjustments: These expenses will also vary and can include, interest adjustment, municipal property tax, prepaid expenses etc.
Q: What the most common Buyers Mistakes made?A: You’ve been saving for awhile, weighing your options, looking around casually. Now you’ve finally
decided to do it—you’re ready to buy a house. The process of buying a new home can be incredibly exciting, yet stressful, all at once. Where do you start? It is essential you do your homework before you begin. Learn from the experiences of others, do some research.Of course, with so many details involved, slip-ups are inevitable. But be careful: learning from your mistakes may prove costly. Use the following list of pitfalls as a guide to help you avoid the most common mistakes.
Searching for houses without getting pre-approved by a lender:
Do not mistake pre-approval by a lender with pre-qualification. Pre-qualification, the first step toward being pre-approved, it will point you in the right direction, giving you an idea of the price range of houses you can comfortably afford. Pre-approval, however, means you become a cash buyer, making negotiations with the seller much easier.
Allowing “first impressions” to overly influence your decision:
The first impression of a home has been cited as the single most influential factor guiding many purchasers’ choice to buy. Make a conscious decision beforehand to examine a home as objectively as you can. Don’t let the current owners’ style or lifestyle sway your judgment. Beneath the bad décor or messy rooms, these homes may actually suit your needs and offer you a structurally sound base with which to work. Likewise, don’t jump at a home simply because the walls are painted your favorite colour! Make sure you thoroughly investigate the structure beneath the paint before you come to any serious decisions.
Failing to have the home inspected before you buy:
Buying a home is a major financial decision that is often made after having spent very little time on the property itself. A home inspection performed by a competent company will help you enter the negotiation process with eyes wide open, offering you added reassurance that the choice you’re making is a sound one, or alerting you to underlying problems that could cost you significant money in both the short and long-run. I can suggest reputable home inspection companies for you to consider and will ensure the appropriate clause is entered into your contract.
Making an offer based on the asking price, not the market value:
I can provide you a current Comparative Market Analysis. This will provide you with the information necessary to gauge the market value of a home, and will help you avoid over-paying. What have other similar homes sold for in the area and how long were they on the market? What is the difference between their asking and selling prices? Is the home you’re looking at under-priced, over-priced, or fair value? The seller receives a Comparative Market Analysis before deciding upon an asking price, so I make sure you have all the same information at your fingertips.
Failing to familiarize yourself with the neighborhood before buying:
Check out the neighborhood you’re considering, and ask around. What amenities does the area have to offer? Are there schools, churches, parks, or grocery stores within reach? Consider visiting schools in the area if you have children. How will you be affected by a new commute to work? Are there infrastructure projects in development? All of these factors will influence the way you experience your new home, so ensure you’re well-acquainted with the surrounding area before purchasing.
Not looking for home insurance until you are about to move:
If you wait until the last minute, you’ll be rushed to find an insurance policy that’s the ideal fit for you. Make sure you give yourself enough time to shop around in order to get the best deal.
Not recognizing different styles and strategies of negotiation:
Many buyers think that the way to negotiate their way to a fair price is by offering low. However, in reality this strategy may actually result in the seller becoming more inflexible, polarizing negotiations. Benefit from my knowledge and skills as an experienced realtor. We will explore what strategies of negotiation will prove most effective for your particular situation.