Buying is a Big Decision
As the cost of rental accommodations climb and interest rates drop, we are seeing an increasing number of first time home buyers in the marketplace. Here are some quick, albeit hard driving, tips to assist you in making one of the biggest financial decisions you will face in your lifetime. Be realistic in your expectations. Start by securing pre-approval of a mortgage and maximum purchase price from a financial institution of your choice. Don't rely on Internet based questionnaires; get face to face with an experienced lender. Should you not qualify because of one factor or another, take the time to satisfy that requirement before moving on. If you don't like the terms being offered by that bank, go to another and see what they have to say.
I know it's fun to window shop at the Mall, or kick tires on a car dealer's lot Sunday afternoon, but asking families to disrupt their lives so you can browse through their home without knowing you can afford it in my opinion is just downright rude. Period. When you make an appointment, show up with your spouse, and please, be on time. Leave the kids with Grandma or a friend. They can live without you for an hour.
Be honest with yourself. Have a heart to heart discussion with your significant other on what would be the ideal property starting with location, features, and age. Be focussed on where you would be willing to live. If you have children, consider the schools you want them going to. There is no use shopping in a small town because the asking prices are lower if you have no intention of living there or it is located on the wrong side of the provincial border.
Find a good Realtor and stick with him or her in the search. 98% of all homes sold in Canada are through the Multiple Listing Service; a system that allows Realtors other than the one that is marketing the property to represent the buyer and get paid for providing that service. If the relationship starts to be uncomfortable, tell them how you feel and why. Maybe they misunderstood your needs, or you changed some important specifications mid-stream and didn't communicate it clearly to them. If it proves to be still difficult, then move on.
Listen to the professional advice your Realtor gives you. Too often, first time buyers create unnecessary stress for themselves (and others) because they are guided by amateur advisors who don't know the market or how to effectively negotiate. Taking instruction from coffee table experts will almost always get you outcomes that are not favourable to your interests.
Looking at five or six properties in a particular price range should give you a sense of what you will get for your money. Ask your Realtor for a list of recent sales of comparable properties, and closely examine the relevant features that impacted on the final sale price. Recognize good value when you see it and act on it quickly. Even in today's market, a buyer who hesitates too long will only get to drive by the house they should have bought, not into the driveway. Smart vendors today are pricing to sell, have their property in show condition, and have already made plans to move if they get a respectable offer.
Make an initial offer that is courteous and prepare for negotiation. A disrespectful start to the relationship often gets the vendor's back up, and it will almost certainly cost you in a) lost opportunity, b) hard cash, or c) good will. Even after facilitating hundreds of negotiations over the years, I am always amazed at what can be achieved when two parties bargain in good faith and from a logical set of facts.
Vern McClelland is an associate broker with RE/MAX of Lloydminster. For more helpful tips on buying and selling real estate, visit www.mcclelland.ca