|
TIPS
FOR WHEN YOU ARE BUYING A HOUSE
Determine
what you can afford. Visit
your banker or a mortgage broker to determine what your income can
support. Consider the total
budget for your lifestyle and determine if you wish to spend all you are
allowed, or leave yourself some room for other things. Determine
the costs. These include
the down payment, legal fees, land transfer tax, costs of processing the
mortgage, fees for high ratio mortgage, survey or title insurance, extra
furniture or appliances, decorating or repairs, moving costs.* Define
the right house for you. Do
not assume this is your last and best house.
Chances are you will buy again as your needs change or as your
finances change. Define
your needs on a 5 to 7 year horizon. Your
definition will include location, type of home (semi, condo, investment,
detached), school and transportation issues, size of home, number of
bedrooms, garage and any other features you feel are important to you. If
you already own a home, you need to decide what approach you are going
to take. Are you going to
find a suitable home and then put your existing home on the market, or,
are you going to put your home on the market while you look for the
right home. Either approach
is acceptable. Both
approaches have disadvantages. Discuss
this with your Realtor. Select
a Realtor and develop a strategy. (
This should be the first step, but it sounds self-serving to put it at
the top. A Realtor can walk
you through the steps above and make these decisions so much easier to
handle) *
If you are a first time home buyer, spend extra time on this topic and
speak at length with your banker or mortgage broker.
It is important to note that you must have at least 5% of the
purchase price in the bank before you buy, plus the costs of closing the
transaction. Failure to
have these funds in advance will likely mean you cannot get your
mortgage approved, no matter your income or credit rating. TIPS
FOR WHEN YOU ARE BUYING A HOUSE The
Buyers of this millennium are much more sophisticated than ever before.
Consumerism is requiring all businesses to be much more open and
sensitive to the needs of today’s customer.
Real Estate Council of Ontario has made some major steps in this
area. In
the past, when people saw a sign on the front lawn of a home, they
called the agent, inspected the property, and, if they liked it, asked
the agent to prepare an offer for them. After the sale some people found that there were things about
the house they had not seen nor had they been told of. Upon investigation, they discovered that the Realtor was
under contract to the Seller and therefore was obligated to protect the
Seller’s interest by not revealing anything that was not required or
asked. To
counteract this, today’s Buyers have the option of hiring their own
Realtor to represent them in the search for a suitable home.
The contract they enter into is very similar to the one the
Seller has. That is, the
Realtor is required to protect the interest of the Buyer and to be sure
all of the disclosures are made and all of the questions are asked, that
will make for an informed decision. Further, to make it even more appealing, the Seller pays. This
arrangement is called “Agency”.
So, we can have Seller Agents and Buyer Agents.
This makes for a more comfortable arrangement for both the Seller
and the Buyer. To
be fair, it must be pointed out that in most situations where the
Seller’s Realtor handled the sale for the Buyer there were no
problems, however, there were sufficient that changes were made.
The new process is in place for those who simply have a
preference to be formally represented by their own Realtor.
It
is my personal recommendation that all Buyer’s enter into an agreement
with their agent. Life is
better if you do! Sometimes,
we have the Buyer Agent faced with selling a home
has been listed by their own office and the Agent is therefore
acting as a Seller’s Agent as well.
This is called “Dual Agency”.
It sounds complicated but speak to your Realtor about it and you
will find it really doesn’t have to be. Ask
your Realtor for a brochure called “Working With a Realtor” This
Ontario Real Estate Association document goes into this business of
Agency further. How
To Choose An Agent To Help You Purchase a Home Selecting
an Realtor to help you Purchase has many of the same considerations as
when you decide with whom you are going to list your home.
Once again, this step is perhaps the most important decision of the
whole process for if you have
a Realtor
that you are comfortable with, you will find the whole process much
less stressful and the decisions easier. As
this is probably your biggest single investment - real estate - you need
to be sure you have confidence in the person with whom you are going to
work. If you checked out the
information elsewhere on this web site entitled “Why You Should Use Your
Own Agent”, you will see that you really should have someone who is
dedicated to your interests. If
you know someone you trust with this project, speak to that person and get
some information about their approach, and, if you are satisfied, enter
into a “Buyer Agency” contract with them.
If you are not sure, the following tips may help you. Ask
around for who your friends are using or have used and get recommendations
on who you might choose. Ask
them why they like the person or what happened that they didn’t like. Interview
at least 2 Realtors to have them describe what they will do for you in
specific terms. The key here
is to understand the Realtor’s approach and see if it matches your need
for assistance. Look for a
helpful and supportive attitude. Your
needs and your timing should be a priority for the Realtor. Ask
the people you interview for at least 3 references: Have the Realtors explain the costs involved in buying a house and get some idea of how informed they are in terms of the price range you are considering. |
You
may have your own list but this list is a basic set of steps you should
consider when you begin the process of searching for a home to purchase.