Finding the right agent
You want to find the right home, in the right location, at the right price - and you want to do it quickly, with minimum hassle. The best way to do that is to work with a professional realtor who understands your wants and needs, your time frame and your financial boundaries.
Why work with an agent?
- You’ll save time. An agent can pinpoint homes that fit your needs and dismiss those that don’t.
- You benefit from an experienced negotiator. Your agent will manage your offers and counter-offers, ensuring that you get the best possible price for your home.
- You’ll get the right information. Your agent knows the neighbourhood and can give you accurate information on local real estate values, taxes, utility costs, services and amenities.
- You can always count on great advice. Because your agent is familiar with the entire home purchasing process, he or she can advise you of your legal and financial options, and recommend appraisal, home inspection and contracting services.
Choose an agent who understands your needs
Here are a few questions to ask to help you determine if an agent is right for you:
- Will you be representing my interests?
- Do you have access to MLS information?
- Will you provide market evidence to support the price?
- Will you look after closing and possession details?
- Can you be contacted at any time?
Working with an agent
Let your real estate agent do the searching for you. The best buys aren’t in the newspaper ads; most great opportunities are on "hot sheets" that are available every morning to salespeople with access to MLS information.
An agent’s job is to:
- Provide information on the property and the area
- Negotiate a price and terms that are agreeable to both buyer and seller
- Help arrange a source of financing
As a homebuyer, you must work with your agent to find the home that’s right for you. Communication is key - tell your agent what you want, and be specific.
- Offer a detailed description of your property needs and wants. If you will absolutely not consider a house without a hardwood floor, say so. And if air conditioning is a "nice to have" rather than a "must have," communicate that, too.
- Be specific about where you want to live. If you refuse to live outside a certain area, it might take longer to find you a home, but your agent will know not to waste your time with anything not in your chosen neighbourhood.
- Tell your agent what you can afford. He or she can help you get a pre-approved mortgage so you know for sure what your price range will be.
- Communicate your likes and dislikes for each property you see. It will help your agent narrow down the possibilities.
- Commit to one salesperson.
- Respect and perform the terms of the purchase agreement.
- Keep an open mind. Agents know about those charming little areas that you’ve never even heard of. You might find your dream home in a completely unexpected place.
Qualifying for a mortgage
Your Royal LePage agent can arrange to have you pre-qualified for a mortgage before you start shopping for a home. It’s easy, and you’ll avoid possible disappointments down the road if you fall in love with a place, then find out you can’t afford it. Plus, once you do find the perfect home, it will mean you can make an offer immediately.
Here’s how mortgage approval works: the amount of money you qualify for, plus the amount of cash you can put down equals the amount you can afford to spend on a home. Most lending institutions won’t allow more than about 30% of your income to support a mortgage. If you have other debts, they usually won’t allow your debts and your mortgage to exceed 40% of your income.
Finalizing your mortgage
Once you’ve found the home you want to buy, you’ll need to finalize your financing. You’ll need to provide your lender with the following documents:
1. A copy of the real estate listing of the property. If the home is still to be built, the mortgage lender will need to see the architect’s or builder’s plans and details on lot size and location.
2. A copy of the offer to purchase or the building contract, if this document has been prepared.
3. Documents to confirm employment, income and source of pre-approval.
4. If you have a pre-approved mortgage, it’s a simple matter of finalizing a few details with your mortgage specialist.
Choosing a neighbourhood
You’re not just buying a home - you’re buying a location. And even the most perfect house won’t feel right if you’re in the wrong neighbourhood. Educate yourself about the area so you’ll choose wisely - and end up being happy with your decision.
- Are you close to shopping and recreation? Being close to stores, parks, recreational facilities, a post office and dry cleaners will save you time.
- Do people in the area take care of their homes? Explore the neighbourhood, keeping an eye out for signs of neglect (overgrown lawns, houses in need of paint, trash and junked appliances littering yards). A run-down neighbourhood can drive down your property value.
- Are there schools nearby? If you have children, the proximity and quality of schools is key. Some schools will provide data (i.e. average test scores) that can determine quality. Talking to neighbours with children can be helpful, too.
- Is there good access to transportation? Living near public transport and/or major highways can mean an easier commute to work.
- Is it safe? Check with the local police department - they may be able to provide statistics about break-ins or other crimes.
- Will the home increase in value over time? Homes in some neighbourhoods appreciate faster than others. Research the selling prices of homes in over the past decade or so to predict future trends. Your agent may be able to provide helpful data.
- Is it quiet? Listen for traffic noise, barking dogs, airplanes and any other noises that might bother you. Return to the neighbourhood at different times of the day to get an accurate impression.
Protect yourself with a home inspection
That gorgeous house on the corner lot may look great, but it could be hiding all sorts of expensive, annoying problems, from a leaky roof to faulty wiring to a mouldy basement.
Make sure your home is solid and secure inside and out before you buy it. A home inspector will determine structural and mechanical soundness, identify problem areas, provide cost estimates for any work required, and generate a report. It’s a great way to avoid headaches and costly problems that can turn a dream home into a money pit.
If you decide to go ahead and buy a home with issues that have been flagged by your inspector, you can base your offer on how much potential repairs and upgrades may cost.
Home inspection costs range according to size, age and location of the home. Your Royal LePage sales representative can recommend a reputable home inspection service or arrange for an inspector to visit your property.
Determine what you can afford
Buying a home involves both one-time costs and more regular monthly expenses. It’s important that you take both into account when you’re figuring out how much you can spend on a home.
The largest one-time cost is the down payment, which usually represents upto 25% of the total price of the property. Then, in addition to the actual purchase price, there are a number of other expenses that you may be expected to pay for.
Typical One-Time Expenses
- Mortgage application and appraisal fee (paid at time of application)
- Appraisal fee (paid at inspection)
- Property inspection (optional) (paid at closing)
- Legal fees (paid at closing)
- Legal disbursements (paid at closing)
- Deed and/or mortgage registration (paid at closing)
- Property survey (sometimes provided by seller) (paid at closing)
- Land Transfer, Deed Tax or PropertyPurchase Tax (in Quebec within3 months following signing) (paid at closing)
- Mortgage interest adjustment andtake over fee (if applicable) (paid at closing)
- Adjustments for fuel, taxes, etc. (paid at closing)
- Mortgage insurance (and application fee if applicable) (paid at closing)
- Home and property insurance (paid at closing and on-going)
- Connection charges for utilities such as gas, water and electricity (paid on date of move)
- Moving expenses (paid on date of move)
Other costs may include landscaping, decorating, furnishings, appliances and repairs. Typical monthly costs include mortgage payments, maintenance, insurance, condo fees, property taxes and utilities.
Protect your home with insurance
When you purchase a home, you have several insurance options that will protect your investment in different ways.
Most mortgage lenders insist on fire insurance coverage that is at least equal to the loan amount or the building value, whichever is less. You should also consider a homeowner’s policy that combines fire insurance on the building and its contents with personal liability coverage. Consult your general insurance agent for professional advice.
Mortgage Life Insurance
When lenders refer to mortgage insurance, they’re referring to coverage that’s provided by CHMC or MICC for a high ratio mortgage. Mortgage Life Insurance (MLI) is optional, inexpensive coverage on your life, which protects your beneficiaries by paying off your outstanding mortgage in the event of your death. MLI premiums are based on your age and mortgage amount. The premium is added to your mortgage payment so there’s no extra paperwork, and it remains the same until your mortgage is paid off.
Disability Insurance provides replacement income if an accident or illness prevents you from working.
Job Loss Mortgage Insurance
Job Loss Mortgage insurance covers the mortgage payments in the event that you involuntarily lose your job.
Understanding market conditions
The real estate market is always changing, and it helps to understand how market conditions can affect your position as a buyer. Your agent can provide you with info on current conditions and explain their impact on you.
The supply of homes on the market exceeds demand.
- High inventory of homes
- Few buyers compared to availability
- Homes on the market longer
- Prices tend to drop
- More time to look for a home
- More negotiating leverage
The number of buyers wanting homes exceeds the supply of homes on the market.
- Smaller inventory of homes
- Many buyers
- Homes sell quickly
- Prices usually increase
- May have to pay more
- Must make decisions quickly
- Conditional offers may be rejected
The number of homes on the market is equal to the number of buyers.
- Sellers accept reasonable offers
- Homes sell within an acceptable time period
- Prices generally stable
- More relaxed atmosphere
- Reasonable number of homes to choose from
Figuring out classified ads
Are you mystified by some of the abbreviations and terms that you see in newspaper real estate ads? Take a quick look at the list below, and you’ll sail through the classifieds.
air conditioning - a/c
apartment - apt
appliances - appls
bachelor - bach
balcony - balc
basement - bsmt
bathroom - ba, bath, bth, bthrm
bedroom - br, bed, bdrm
building - bldg
bungalow - bung
cathedral ceiling - cath ceil
central air conditioning - c/a
central vacuum - cvac, c/vac, central vac
condominium - condo
detached - det
double - dbl
exposure - exp
exterior - ext
family room - fam rm
fenced - fncd
finished basement - fin bsmt
fireplace - fpl
floor - fl
garage - gar
hardwood floors - hrdwd flrs
included - incl
kitchen - kit, kitch
large - lrg, lge
luxury - lux
parking - prkg
penthouse - ph
piece - pc
private - priv
renovated - reno, reno’d
room - rm
separate entrance - sep entr
solarium - sol
spacious - spac
storey - stry
subdivision - subdiv
suite - st, ste
townhouse - twnhse
wall to wall - w/w
washer/dryer - w/d
w/o - walkout (generally refers to basement)
workshop - wkshp
yard - yd, yrd