Kahootz for buyers

By assessing your financial situation, you will be able to determine how much money you have available for a down payment. If you’re a first time buyer, this is the amount of money you have to put toward the purchase, which has not been borrowed – usually personal savings. If you already own a home, your down payment usually comes from the equity you have in your home. Equity is the difference between the amount your home would sell for, and the amount remaining to pay on your mortgage. Establishing your down payment helps you determine the price range of homes you will be shopping for.

Whether you’re purchasing your first, second, or third home, it’s likely you have lots of questions. Can I afford the type of home I want? Will we be able to purchase more home than we originally thought? Other than the down payment, what expenses will we incur?
One expense you don’t have to wonder about is the cost associated with working with an experienced realtor. If you purchase a home being marketed through the MLS (Multiple listing service) in most cases your realtor will be compensated through an agreement with the listing Broker. As a result the cost to you, the purchaser, is nothing.

So before you turn the page, start thinking about locating an experienced realtor who will work with you to help you determine your wants, needs, and must haves.

A lender does not know what your personal lifestyle may be or what expenses you have that are not part of the equation they work with. Do you like fine wine? What about those season tickets to the ball games? You may find yourself having to give up some pleasures you really enjoy. That’s no fun.

What happens if interest rates have doubled when it comes time to renew? Or maybe when you purchased there were two incomes and now there’s only one. Play it safe. Consider what your circumstances could be in the future. Purchase a home today that you will be able to keep, even if your situation changes.

Without a doubt, the best way to find your new home is through the relationship you will establish with an experienced and professional realtor. One who will undoubtedly spend hours with you seeking out and selecting homes that fit your criteria. Your realtor should enjoy working with buyers, as well as taking the time to help you obtain your goals. You will benefit from their knowledge of the market, their experience with drafting offers, and their negotiating skills.

Many homebuyers don’t know what to expect from their realtor. An experienced professional will advise you on your choices, and suggest compromises that may have to be made. They can suggest ways a home could be easily improved so it would better suit your needs, and also increase the future value of the property.

Take the checklist provided in the back of this book, and fill it in. During your initial meeting with your realtor provide them a copy of it. You’ll be asked questions to find out information you may not have considered. As you and your realtor spend more time together, your list will probably change. Options will be considered, choices narrowed down – if you keep an open mind you may end up with that ensuite bathroom you’ve always wanted.

Your realtor should be in tune with your comments, listening and tuning in to you as you are viewing homes. Your comments will provide the feedback they require in order to better qualify the homes they show you. Think out loud as you walk through a house, but a note of caution here: be courteous in your comments, the seller may be present and naturally, they have pride in their home. Remember too, any information the seller’s agent overhears will be repeated to them.

A professional will not try to answer a question that they feel is outside their scope of knowledge. They’ll refer you to a lawyer if it’s a legal matter, or to a banker if it’s about finances. Over the years a realtor accumulates contacts they can use as resources to get answers to any questions you may have. This is another benefit of working with an experienced realtor – they have a network of contacts to support you.

Ask the seller to replace the furnace prior to you moving in. If they accept, and increase the price, then so be it. You’ve bought the home you want, and the furnace was financed through the mortgage. This strategy could be applied to any major expense that comes to light as a result of what the inspection reveals.

Add insulation to the attic ($22). Change the ground floor bathroom sink ($65 on sale and brown). Re-grade around the foundation (2 yards of topsoil $85). Repair the dryer’s electrical outlet ($18). Repair skylight (1 tube of caulking $6).

Two friends, $200 and a signed statement confirmed the work had been completed. The offer was now firm and binding.

The realtor representing the buyer should have been very specific as to the details of the work to be completed. How much insulation? What colour of sink? The realtor didn’t even request that their client be given the right to go back in with their inspector and confirm that the work had been completed in a professional and workmanlike manner.

Be specific. And remember that you and your inspector have every right to request that you be able to return to the home to verify to your satisfaction that the work has been completed.

It can happen innocently enough. You are out visiting open houses. The realtor is showing you the home and asking you qualifying questions. You happen to disclose that you have recently sold your home in another city. You wish to live in this area because of its proximity to your work. This is also the zone you must live in for your children to go to the school you want them to attend. Over the course of the conversation you have disclosed your motivation for wanting this area. Whether you have a realtor, or submit your offer through the listing agent, the seller will be made aware of the facts you have disclosed. It’s the responsibility of the listing agent to share the information.

Remember – if you have entered into a Buyer Agency Agreement, then any information you share with your realtor is confidential and cannot be disclosed to the seller or their realtor without your permission.

I knew on this particular property we would not have that opportunity. Sure enough, one of the other realtors brought their clients with them and had them wait in the laneway. Because they were there to deal with the offer immediately, the sellers countered them first. Having been given the first opportunity, they took advantage of it and accepted the seller’s counter. The opportunity for a bidding war didn’t interest the sellers. They simply countered at full price, it was accepted and my clients never had a chance.

Colleagues of mine go one step further. They ask the listing agent if they are anticipating other offers. Should they get the impression that there may be other offers, they prepare more than one offer to suit any given situation. If they arrive to deliver the offer and are told the purchaser is not competing, which offer do you think the seller’s realtor is given? Now that’s good realtoring!

Do you really think prices will drop by more than that? This will more than likely be the scenario should you wait.

Interest rates will continue to rise and fall. I have yet to meet the person who can accurately predict the future. Just last week I had a lender in my office informing me that rates were going up the following Monday. They dropped by 1/10th of a percent.

You think you’re paying less in rent? Have you calculated the appreciation you have lost? I will not debate here whether the financial market has outperformed the real estate market. Frankly, this would depend on where you live and the history of values in your area.
Most people dream of owning a home one day. If not for themselves, then for their family. I don’t think homeowners put a price on the pride and security they feel when they own their home.

Mistake Number One. Don’t wait. Start planning. Call a realtor today.