Tips for Buying a House

 Steps Involved In The Process Of Buying A Home 

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.

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. 


Why Should You Use Your Own Real Estate Agent When Buying: 

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.