House-Hunting Tips
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Buying a home? These eight tips can help make your house-hunting experience positive and rewarding.
By Marcie Geffner
- Location counts. You've probably heard the old real estate joke about "location, location, location," but the point still bears repeating. Location is crucial. How far are you really willing to commute to your place of employment? How good are the local schools, shopping centers, public transportation, seniors services and other public amenities? Will your new home be next to a vacant lot or a commercial property? Even a picture-perfect dream home can be a mistake if it's in an undesirable location, and a poor-location home can be a particularly bad choice if you anticipate reselling the home within a few years.
- Make a list. Do you (and your spouse, if you're married) really know what you need and want in your home? You'll save yourself many hours of shopping (and potentially arguing) if you make a list ahead of time. Zero in on the features you must have, would like to have, definitely don't want and would prefer not to have. Your goal is to find the right home for your family without falling in love with one that doesn't suit your needs. Tip: Start compiling your wish list by thinking about what you like and dislike about your current home.
- Do your homework. Not long ago, consumers had very little access to information about recent home sales prices, market trends, homes on the market, neighborhood statistics and the home-buying process. Today, all this information and more is available on the Web. Go surfing. Get educated. Become empowered.
- Get preapproved for a mortgage. Your top-dollar home price is a function of your household income, your creditworthiness, interest rates, the type of loan you select and how much ready cash you have for the down payment and closing costs, among other factors. Rather than guessing or estimating how much you can afford to spend, ask a lender or mortgage broker to give you a full assessment and a letter stating how much you're qualified to borrow. The true amount may be much more or much less than you think.
- Use a checklist. Touring multiple homes is a confusing experience for most people. Rather than relying on memory, make notes about the homes you visit. Turn your priorities into a personalized home-shopping checklist and use it track the features of each home.
- Wear comfortable clothing and sturdy shoes. House-hunting can be tiring, especially if you're relocating to a distant community and want to see a dozen homes in one day. There's no sense in torturing your feet unnecessarily.
- Be prepared to make an offer. House-hunting can also be frustrating, especially if you know in your heart you're not really emotionally or financially ready to buy a home. If you're not ready, don't put yourself through the exercise. If you are ready, go through a blank purchase contract ahead of time so you'll know what decisions you'll face when you make an offer.
- Relax. Granted, buying a home is a major life-altering event. But it's not worth making yourself insanely crazy or super-duper stressed. Save time at the end of your house-hunting expedition to unwind, calm your thoughts and emotions and keep the whole experience in perspective.
Copyright © 2000 Marcie Geffner. All rights reserved.
Making an Offer
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You sometimes hear that the amount of your offer should be X% below the seller's asking price, or Y% less than you are really willing to pay. In practice, the offer depends on the basic laws of supply and demand: if many buyers are competing for homes, then sellers will likely get full-price offers and sometimes even more. If demand is weak, then offers below the asking price may be in order.
How do you make an offer?
The process of making offers varies from place to place. Typically, you will fill in a pre-printed 'offer form' with your terms and conditions of purchase and we will present it to the owner and the owner's representative. The owner may in turn accept the offer, reject it or make a "counter-offer".
Because counter-offers are common (any change in an offer can be considered to be a counter-offer), it is important for buyers to remain in close contact with us during the negotiation process so that any proposed changes can be quickly reviewed.
Making a Successful Bid
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Don't throw away all the hard work and preparation you have done by making a ridiculous offer on a well priced home. Nothing will turn a seller off more than a low ball offer on a house that has been realistically priced. Often, negotiations will stop, rarely to be revived again. If they are re-opened, the sellers generally will show their displeasure at the initial low offer by locking at or near the listing price.
An example: Mr. and Mrs. Buyer have been looking at houses for months. Finally, they find the perfect house, which is an ideal match for their needs and wants. The house is listed at $255,000. Mr. and Mrs. Buyer have a CMA in hand that shows average selling prices in the neighborhood to be in the $248,000 to $253,000 range. Ignoring the information they have, they make an offer of $220,000. Mr. and Mrs. Seller, annoyed at the low offer, counter offer at full selling price, $255,000. The Buyers, still convinced that they can "steal" this house, make a 2nd offer of $225,000. The Sellers, now very frustrated, do not move from their $255,000 price. Suddenly, there is word that another offer is forthcoming, this time from Mr. and Mrs. Smith. In fear of losing the house, Mr. and Mrs. Buyer up their offer to $254,000 (still needing some concession) and the Sellers accept. Consider, though, that a realistic first offer in the $250,000 range (remember, the CMA showed $248,000 to $253,000) may well have been accepted by the Sellers. If this were the case, the Buyer's paid $4000 more than they had to.
The moral: An unrealistic offer on a house that meets your needs and is priced correctly could end up costing more than it would with a realistic offer.
How to Win the Bidding Wars
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Knowing a few tricks of the trade can make the difference between walking away disappointed and purchasing the home of your dreams at a fair price.
By Marcie Geffner
In many of today's strong real estate markets, home buyers can expect to face multiple offer situations. Multiple offers are a classic example of economic realities because they appear when the supply of homes for sale is limited and the demand for good-condition homes is strong. Buyers hate multiple offers because they push up home prices and create an extremely stressful home-buying experience. Knowing a few tricks of the trade can make the difference between walking away disappointed and purchasing the home of your dreams at a fair price.
How can I make my offer more attractive to the sellers?
Offer the highest price you can. Get pre-approved, not just pre-qualified, for your mortgage and attach a copy of the preapproval letter to your offer. Make as large a downpayment as you can and provide documentation showing the source of your downpayment (e.g., a bank statement). Avoid unnecessary contingencies. (Waiving your inspection or financing contingency can make your offer attractive, but it's foolish.)
It is advisable to be readily available throughout the process of buying your home, and it is crucial that you be there whilst your offer is being presented and negotiated with the vendor are in progress.
Buyer's Checklist
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- Decide what your budget for buying is and how much down payment and monthly payments you can afford.
- Visit our office and have yourself pre-approved for your mortgage. This will ensure that your finding a home will not be an exercise in futility, that on finding your dream home, you find out that you are not able to get a mortgage to buy it. We will get the interest rate locked-in , so that you are not caught off guard by interest rate hikes. We will also get you the lowest mortgage rates and save you thousands of dollars.
- Spend ample time with us discussing your specific requirements, market conditions and availability of homes in your price guidelines. Best of all, keep in touch.
- Zero in on an area keeping in mind whatever is most important for you, i.e.
- Schools
- Transportation
- Proximity to your workplace, expressway etc.
- It is advisable to sign a Purchaser's Agreement with us. The Law requires this agreement if we are to negotiate your purchase at the minimum price and the overall contract in your favour.
- Please make sure you keep all your appointments. It takes several hours of time, sometimes stretched over days for our office to coordinate the appointments for you and to make sure that you can view the properties in a brief span of an hour or so. It is not uncommon for the owners of homes to shuffle their own schedules simply to make their homes available for your visit.
- Make notes while looking at properties, you do not want to mix the kitchen of one property with the washroom of the other.
- Your down payment should be in your account at least 2 weeks before the closing date
- Your land transfer tax will be 1% less $275 for the initial $250,000.00. For exact amount please check our website.
- Your closing cost generally will be about 1.75%-2.25% of your purchase price and this will include the appraisal fee for your mortgage, loan fee, mortgage processing fee, insurance and lawyer's fee.
- Be prepared to provide verification of income (including a pay stub and recent tax returns), bank account numbers and details of your long term debt (credit cards, auto loans, child support etc.). If you are self employed you are also required to provide financial statements for your business. Lenders require specific information from borrowers in order to approve mortgage. If you change jobs or your financial status changes between the time you submit an application and the time it is funded or if you change jobs, there is a change in salary or your marital status changes, it could affect your mortgage application.
- Your mortgage payments will normally start at the end of the month, however the actual date of your first payment will be included in your closing documents and you should check with your lawyer
- If you purchase a condominium apartment or townhouse, maintenance fee are paid at the beginning of each month.
- We can provide detailed information on almost any property currently listed for sale by any real estate company, as we have access to all the data, so if you see a 'For Sale' sign or a newspaper or magazine ad, call us for any further details that you may wish to know and to arrange an appointment to view the property.
- During Final inspection, if it is included in the Agreement of Purchase and Sale, please check and measure whatever you need to on this inspection as you will not have another access to the property till after closing. Please give yourself ample time to confirm this appointment. It is recommended that this inspection is done closer to the day of closing of your home.
- Please get a copy of every document you sign and maintain a file of these and on closing make sure that your lawyer forwards all the relevant closing documents to you and do not forget to remind him often as he will take his time doing this
- If purchasing a condo make sure you book elevators well in advance by calling the management office of the corporation.
- Inform the Post Office of the change of address
- Inform the Ministry of Transport for the change of address on your driving license
- Inform the telephone company, your cable provider, OHIP, Insurance companies and banking institution(s) and your children's schools
- And of course don't forget to inform all your friends and family
Home Buying Timeline
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There are no absolutes on a time-frame for buying a home (some buyers find a home their first day out while others may take weeks or even months) but there are some general guidelines that can help with your overall planning. These time-frames can vary by the type of Real Estate market you are in. In an active market, they can be compressed (you will need to move quickly for desirable homes) but in a less active market you may have the luxury of a bit more time.
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