Buyer’s Guide to a Successful Purchase

Armed with your down payment and your pre-approval letter for a mortgage loan, the next step is finding the house that will best meet your family’s needs. With realistic expectations, patience and plenty of research, you’ll be well on your way.

Once you narrow the search to neighborhoods you like, you’ll want to determine the maximum house price you can afford. Even though you’re pre-approved for a set loan amount, it doesn’t mean you can afford it. You’ll want to factor in other expenses, including retirement and college savings, vacations, and home maintenance and repairs, when you calculate how much you can afford for a monthly payment. And don’t forget to budget for homeowners insurance and property taxes. There’s also homeowner’s assocation fees, especially in newer developments.

Next, differentiate your needs versus your wants. You need three bedrooms, but a fourth room would be nice for a play room or guest room. You need a two-car garage, but a larger one would be nice for storage. You need a functional kitchen but want hardwood floors. You need two bathrooms but want a luxurious master suite. You get the picture.

As you begin your house-hunting venture, prepare a checklist. Break it down between exterior and interior characteristics. Make notes on each feature and make notes. Some people give each a 1 to 10 score, which is fine, but the first few houses you see will score differently than the last few because you have many more to compare against. Also, after viewing many homes, the numbers begin to lose meaning.

Some of the exterior features to rate might include size of yard, quality of fence, paint condition, roof condition, window conditions, garage, back yard. When it comes to interior, think about square footage; the floor plan; condition of walls; the size, quality, and functionality of the various rooms and closet and storage space.

Your checklist should also include any other factors you deem important—the amount of traffic, the appearance of the neighborhood, safety in the area, the reputation of local schools, etc.

Here are some other suggestions from industry experts:

1 Take a camera with you to capture an image of each house you look at that makes it to the “maybe” list.

2 Don’t make a hasty decision, especially if you feel yourself becoming guided by emotion. Selecting a home takes time, thought and analysis. You should carefully weigh the pros and cons of each house you like.

3 Review your checklist and notes and compare it against your needs, wants and budget.

4 Bring your spouse, friend or family member with you to get a second opinion. They may notice a shortcoming that you’ve overlooked.

5 Find out how much utilities and maintenance cost.

6 Stay on top of newly listed houses via a Multiple Listing Service on the Internet.
7 Remain in close contact with your agent. This is extremely important if you’re in a strong seller’s market and/or in which homes that are priced right go fast. You want a good agent who will alert you of new listings and who will show you the houses as soon as they’re listed.

8 Be prepared to look at the potential of a house rather than what you see in front of you. Set your priorities and decide what can be sacrificed. It’s more important that the layout of the house and the number of bedrooms you need fit your needs and that all major systems are functional versus your dislike for the avocado green carpet or the lack of landscaping. Those types of cosmetic shortcomings can be easily remedied once you buy the house.
If you find a house you like, offer a competitive bid. Keep in mind you’ll likely be competing against other offers—especially if interest rates are low and the spring buying season is in full bloom.
And don’t forget—once you make an offer, make it contingent upon the findings of a professional home inspection. If any major defects surface, you’ll want to have the leverage to renegotiate or back out of the deal completely.

Copyright © by Realty Times

 

In a ‘buyers market’ it’s tempting to ‘do it yourself’ and shortcut necessary precautions but woe to the overconfident buyer. Here are five common missteps that home buyers make.

1. Not engaging a Realtor
With so many websites offering a mass of data on listings, who needs a realtor? Most people, actually. Finding a house and figuring out comps–the price of comparable homes on the market–is the easy part. Managing the nuances of offers, inspections, financing and all the other pivotal steps to buying a home is where many buyers tend to get tripped up.
When you hire a Realtor to act as your “buyer’s representative,” she’s obligated to put your interests first, even if her commission is paid by the seller and based on the sale price. Skeptical? That’s all the more reason to find an agent on your terms. Ask friends and acquaintances for referrals and interview two or three candidates before deciding.
In selecting your Realtor, consider her experience, availability, and customer-service record. Ask for references from previous clients who frequently are all too happy to speak to the qualities of a Realtor who has paid attention to their needs and proven trustworthy. Don’t necessarily default to the names you see everywhere – busy Realtors sometimes employ teams and you won’t be dealing with them in person. You’ll be spending quite a bit of time with your Realtor, so choose someone who matches your personality and has the ability to both manage your search, and help alleviate any anxiety that may arise through the process.

2. Guesstimating how much you can afford
Many buyers mistakenly take a do-it-yourself approach to financing. They use online calculators to estimate how much house they can afford, dive into the house hunt and then get a dose of cold water when lenders refuse to qualify them for that amount. The process is different than it was four or five years ago. Not only are lenders reading loan applications closely, they’re verifying employment and running credit checks multiple times during the process. Pre-approval is a misnomer I’ve seen confuse many clients as lenders will frequently require an appraisal once a home is selected so it’s important to provide time to do this in a subject to your offer.
Remember, too, that the costs of buying and owning a home go well beyond the sticker price. While online calculators do take into account property tax and insurance, it’s up to you to account for maintenance costs, legal fees and moving costs.

3. Letting charm cloud your judgment
No one will fault you for falling hard for a charming older home. But, unless the house has been painstakingly remodeled or you’re prepared to pay for repairs and upgrades, an old house can quickly lose its allure. Last year Alison, a senior manager for the Canada Fisheries, came dangerously close to saying “I do” to a seemingly fabulous heritage home in Qualicum. Ms. Koop was so smitten with the big windows and vaulted ceilings in the living room that she neglected to notice the exposed wires, shoddy roof and other structural problems. Any delusions Alison had were laid to rest in the guest bathroom. “When the inspector turned the faucet on,” she says, “the spigot fell off, hitting the floor of the tub with an exclamatory thunk.”
If you’re considering an old home, don’t let the inspection be your last line of defense,. Negotiate a longer due diligence period, that gives you time to get real estimates from contractors and back out if need be.

Even new homes aren’t without their drawbacks. Too many people were devastatingly affected by Vancouver’s ‘leaky condo’ phenomenon only a few years ago. Proceed with care whatever the home’s age.

4. Focusing on the house, not the hood
In hindsight, many buyers say they wish they’d taken their due diligence a few steps further to really get to know all the perks, quirks and hassles of living in a particular place. You can always fix up the house, but there’s no easy remedy for annoying neighbors, oppressive strata rules and marathon commutes. When Laurie and her husband bought their first home in 2010 they were so infatuated with the three-bedroom waterfront cottage that–in addition to brushing over some of the headaches of an old house –they didn’t give a whole lot of thought to its somewhat out-of-the-way location. If you allow yourself to be enchanted by a property, you may not be aware of all the things you should think about that aren’t about the house, says Laurie, who after living 20 minutes from town for 2 years, still hasn’t gotten used to driving everywhere.
Spend as much time as you can in your future neighborhood, ideally on different days and times. Check out the amenities, identify where you’ll shop, socialize and exercise and test drive your commute to work and such services you’ll use such as hospitals, airports and ferries.

5. Making arbitrary offers
With housing inventory running high and sales at record lows, in most markets, there’s no shortage of houses for sale and sellers desperate to get out from under them–all the more reason to hold out for the right house and the right price. But when you find that perfect house, don’t assume you can lob a lowball offer or make unreasonable demands. Even in hard-hit markets, nice houses in desirable neighborhoods are fetching multiple bids, ( despite a ‘buyers market’ in Oceanside, most homes will still sell on average for 96% of asking price).
If the house has been on the market for months, you probably don’t need to worry about other buyers lining up behind you. Make an offer based on recent sales for comparable homes, foreclosure activity and market trends, and don’t be afraid to start the bidding low. If the house is fresh on the market (or recently foreclosed) and other buyers are circling the block, put your best foot forward but beware of getting drawn into a bidding war.

Globe and Mail, 2010

Which is right for you?

A condo can offer a good location at a less expensive price.

Buying a home is one of the biggest and most important decisions you’ll ever make. Whether you are a first-time buyer, or a veteran homeowner looking to trade up or make a new start, you will inevitably be faced with a number of questions. Your answers will lead you to the home that’s right for you.

One of the most fundamental questions all homeowners face is whether to buy a condo or single family house. There are advantages and disadvantages of each and only you can know what’s right for you.

For Parksville newlyweds Michelle and Kevin, 31 and 36, it was an easy decision. With full time jobs and no children, they were drawn to the convenience of being in town and wanted to be close to the gym and shopping. They bought a penthouse apartment close to the beach with breathtaking views of the ocean.

“We enjoy everything town has to offer—the restaurants and cafes, street markets and proximity to Nanaimo for airport and ferry travel. We walk everywhere and find the easy access to the airport to be a plus since we travel frequently for work,” said Kevin. “When we have children, we may think about a house with a larger lot, but for now this is where we want to be.”

Like all things, living in town comes with tradeoffs. For the price of their two-bedroom/two-bath condo, they could buy a larger home, just a short commute away. They share decision-making for their building with fourteen other tenants and pay pricey condo fees to cover the costs of insurance and upkeep. Their RV sits idle most of the time in a $150 per month rented storage spot only to leave on long weekends and holidays. But for Kevin and Michelle who want to spend their spare time at the gym, hiking and kayaking, the location and convenience can’t be beat. They also like the freedom of feeling they can leave for vacation and business travel and their home is secure and they don’t have to worry about a garden.

On the other hand, Adriana Forte, 62, lives in a condo and misses all that a single-family home has to offer. Six years ago, after her divorce, she bought a “duplex,” with the belief that managing a home would be too much for her alone. But it turned out to be the wrong decision for her. Now, she is seeking a single-family house to call her own.

“It’s difficult to live with neighbors so close,” Forte said. “First there was the noise. My neighbors are night people, and every night they are just getting geared up when I’m trying to sleep. Then I found myself handling 100 percent of the finances and maintenance of the duplex—without compensation. I may as well be living in my own house!” Some Forte also misses the fresh air and private outdoor space. For her, maintaining a home and garden is pure enjoyment. The privacy is what she misses most.

Strata membership, in a duplex or patio home, is also difficult for some people who find it hard to have to seek permission for changes they’d like to make to the outside of their home to ‘personalize’ it, restrictions on rentals, parking, storage and use of common property. While these rules often contribute positively to the ‘look’ and maintenance of a strata complex, having to consult with other residents is stressful for them.

What is most important to you? Give consideration to the following:
• Location – Where do you want to be? Are there options for both condos and single-family houses in this area?
• Privacy – Is it important to you to have complete privacy or do you find close neighbors to be a comfort?
• Responsibility – Do you need total control over decisions affecting your home or are you attracted to the idea of sharing decision-making with your neighbors?
• Maintenance – Are you a homebody who enjoys getting dirty in the yard or are you delighted with the idea of never having to cut a blade of grass again?
• Budget – How much do you have to spend? Depending on where you want to live, a condo may be the only option that meets your budget.
These considerations and others will help you determine the best choice for you now. And just remember, if your interests and priorities change in the years ahead, you can always sell your home and make a move, this time with experience as your guide.

By Melissa Paul, Move.com

Cosmetic issues are easy to remedy By Michele Dawson

Home shopping for first-time homebuyers it’s an exciting, albeit nerve-wracking, experience. If you’re like others in the market for their first home, you probably have in mind exactly how your soon-to-be home will look.
But it’s important not to fall into the bad decorating, dingy walls and dirt-bare back yard equals bad-home trap. If you don’t see past the hideous wallpaper, funky light fixtures and avocado green carpeting, you may miss out on a home with great potential.

And, if you’re looking for a home in a seller’s market where homes are being snatched up as soon as they go on the market, you’ll come to realize you can’t be choosy if you want to make a competitive offer.

One of the first things to do is to get pre-approved for a loan and determine the maximum you can afford to offer for a house. Don’t look at homes that are asking for more than 5 percent above your maximum, otherwise you’ll be setting yourself up for disappointment if you find the perfect—but outside your budget—home.

So what to do?

The floor plan of the home is extremely important. If a floor plan isn’t quite to your liking, consider rearranging it or adding on. If you’re looking at an existing home and will need to remodel or expand to suit your needs, the estimated cost of renovation needs to be considered when making an offer.

Also, consider the features of a home:

• Walls. While these are among the easiest to remedy, they also make a huge first impression. If the walls need to be painted, are covered in wallpaper or are painted a color you find distasteful, picture them crisp and clean in the color of your choice—that’s how they could look after you paint them.

• Floors. Like walls, carpet or floor surfaces that are old or outdated can be easily replaced. You could even ask for a carpet allowance in your bid, especially if you’re in a buyer’s market.

• View. Things like old, ugly—even dirty—windows and window treatments can make a view appear less desirable. Those things can be improved, so unless the only view you have is of your neighbor’s clunker on the side of the house, don’t get hung up on what is surely a fixable view.

• Landscaping. Your best bet is a moderately landscaped yard because you can always improve landscaping without spending too much. Worst case, even if you’re looking at dirt, landscaping is one of the easier projects to tackle. Plus you get to design it however you’d like if you’re starting from scratch.

• Closets and garages. You can never have too much storage space, which is why so many newer homes have three-car garages. But if you encounter a converted garage that is now a bedroom or storage room, don’t give up. Converted garages can almost always go back to their original purpose without much cost or labor.

• Kitchen. The most popular room in the house, many homeowners want their kitchen to be large and have modern appliances. Don’t let outdated color schemes deter you because there’s nothing like a fresh coat (or two) of paint to make a kitchen your own. Plus, if you like the rest of the house enough to make an offer, you can give the kitchen a minor spruce-up with some new appliances or a major overhaul complete with new countertops, cabinets, and flooring.

• The exterior. If the home doesn’t have good curb appeal, try to picture it with a fresh coat of paint and revitalized landscaping.

• Pools. If you want a pool, buy a home with a pool already built in. Pools are expensive and you will not get a full return on the cost when you go to sell. Let someone else lose the return. The cost of repairing a pool is less than putting one in, so if you’re looking at a home with an old pool that looks like it’s in bad shape, it’s still a better bet than putting one in later.

When making an offer, consider what you can’t live without, as well as your budget. Also, be sure you hire a professional home inspector to inspect the house. If the home’s systems are in good working order and the house has everything you want except a minor item or two, make an offer accordingly.
Most importantly, keep in mind that unless you’re building your dream home from scratch, you’ll probably never find the perfect home. But seeing past a previous owner’s bad decorating choices to the core of the home and its potential for livability will yield you the home you’ve always wanted. It may take some work, but hey—it’s yours.

Copyright © by Realty Times

What to consider when making the final decision

As you find yourself heavily immersed in house-hunting mode, you may encounter a situation in which you’re torn between two houses. Perhaps you and your spouse each have a favourite, or perhaps you both like two houses equally – or think you do.

Making a final decision and determining which house to make an offer on shouldn’t be taken lightly. The decision should be made rationally and not guided by emotion.

Of course, you may not have the luxury of taking your time on deciding which house you’d like to pursue. You may be in a market in which homes in your price range get snatched up as quickly as they go on the market, perhaps even attracting multiple offers.

But in some situations, you may find yourself torn between two houses. Sometimes the easiest thing to do is take pen to paper and outline your family’s needs, your budget, and the pros and cons of each house.

Some things you’ll want to compare include:

* The neighborhoods. If the two final contenders are in different neighborhoods, evaluate the pros and cons. If you have kids and being close to a park is important, you’ll want to consider that. How close are shopping, restaurants, church, and other services? Are the streets maintained? Do homeowners landscape and maintain their homes nicely? How long will your commute to work/activites be?

* The schools. If you have school-aged children, you definitely want to consider the reputation of the neighborhood schools. You can usually find general district information online. But once you’re this deep in the process, you’ll want to visit the schools and receive the information first-hand from school officials. You should also talk to teachers and parents.

* Crime. Go to the local police and ask about crime in your specific neighborhood. You might find theft or vandalism to be more prevalent in one area than another.

* The houses compared to others in the neighborhood. While it may boost your self-esteem to have the biggest house on the block, it’s typically a better idea to stay away from purchasing the neighborhood monster. When it comes time to sell you’ll find that the lower value of your neighbors’ homes will shrink your home’s value.

* Appreciation. If the two homes you’re eyeing are in different parts of town or different neighborhoods, ask your real estate agent to retrieve sales of homes in those neighborhoods over the past few years. If one neighborhood shows an annual average 8 percent increase and another is skyrocketing at 15 percent, you may have your decision made.

* The sellers’ situations. If you don’t know already, ask your real estate agent how long each home has been on the market. Usually the longer a house has been listed, the better chance the seller will accept an offer lower than asking price. Conversely, if the house has been on the market for just a couple days, the sellers will probably wait for a better offer if you offer less than the listed price. Your real estate agent might also be able to dig up additional information about the sellers, like why they’re selling. If it’s a job-related move or a divorce, the sellers likely want to move as quickly as possible, meaning you have a better shot at them accepting a lower price.

* The houses themselves. If you haven’t already, you should make a list of the amenities and attributes you want your house to have. If you want that first-floor home office, a large, open back yard for the kids, or a gourmet kitchen, be sure to include that on your list. Then, rate how each house measures up to each need on your list.

* Drawbacks. Likewise, make a list of the cons associated with each house and determine how much of a negative impact each will have.

As you carefully weigh all the factors, it might become clear that one house is more enticing than the other. Or, you may find the houses are still equally appealing. If that is the case, be sure you look at the homes more than once. You may notice something you didn’t the first time around – something that could sway you one way or the other.

In fact, you should probably visit each home at least two more times, at different times of the day to get a feeling for how the house and neighborhood look and feel in the morning versus late afternoon or evening. Once you make a decision and an offer, you can take comfort in knowing you may still have a back-up if the deal falls apart.

Copyright © by Realty Times

You may save money in the long run
Looking for a new home can be exciting and frustrating. You can help alleviate the frustration by paying close attention to five key areas of the homes you’re considering buying; it may save you money in the long run.
Don Walker is an inspector and owner of Ace Home Inspections. He says there are five areas in homes that he frequently reports problems with. They are electrical, foundation, plumbing, the attic, and landscaping.

Electrical
Walker says sometimes homeowners assume with newer homes that all will work just fine but that’s often not the case. “I [inspected] a brand new house — four years old but the electrical was all done incorrectly,” says Walker.
Having a complete home inspection will help to rule out any problems and point out any areas of concern. However, even as you’re browsing homes, buyers can start to make note of the key areas that Walker mentioned, such as the foundation.

Foundation
Walker says a four-year-old home he inspected recently was already showing trouble signs which could result in a costly repair project. “It was a model home. What [the homeowners] did was plant trees for shade to make it look really nice, but they planted the wrong trees and they’re going to crack the foundation and it’s going to cut the property value down by $50,000,” says Walker.

Walker says in the case of that home, the trees were causing micro-fractures in the tile in various locations of the home. “As you walk through the house, 21 feet in and 30 feet deep, there’s just too much root invasion and it’s going to ruin their tile,” explains Walker.

He says some tell-tale signs with this home were the minor cracks in the foundation that were causing a lifting and separation of the foundation. Also, the windows were not opening and closing properly, “which means the foundation is moving.”

However, just because you see cracks doesn’t mean there is a foundation problem. “Most people don’t understand that there are natural cracks in a house. That’s why when we do an inspection report we have to look at it and say ‘Okay, this is a typical crack and this one is an untypical crack,’” says Walker. He says some cracks may lead to other problems while others won’t.

Plumbing
Walker says another big area of concern is the plumbing. It’s an area that you can’t always spot as easily but it can create expensive repairs if plumbing issues go either undetected or are not properly fixed. “Mold forms underneath sinks when people have a leak and they fix the pipe but they don’t take care of the mold,” says Walker.

He says things like caulking the sink can help prevent mold. “That’s my number one thing I always find — bad sinks,” says Walker.

He says that when you look at the sink, look behind it and most of the time you will discover a little crack. “What happens is, when you wash dishes or you wash your hands in the bathroom or the kitchen, the water gets in that crack and seeps down. Once the water gets behind the cabinet it’s in a perfect position to create mold,” says Walker. The dampness, humidity, and lack of light can turn that area beneath the sink into a mold-breeding ground.

Attic
“You can tell everything about the house by the attic,” says Walker. He says other areas of the home can be covered up if a repair had occurred. For instance, if there was a leak and it damaged a wall, with the right contractors and repairs it can be made to look like new and, hopefully, function like new. But Walker says the attic is sort of the eyes to the soul of the home. “In the attic you can tell where all the damage has been,” says Walker.
“If you’re in a 20-year-old house and you see that the insulation is brand new, you know that there was a water leak because it had to be replaced,” says Walker. He adds, “You can tell if the roof is good because you can look right at the wood.”

Landscaping
“There should not be moisture or plants next to your house,” says Walker. He says there should be a 12 inch barrier between the landscape and the house. Walker says otherwise you run the risk of having the foundation crack and affect the home. What happens is, as the landscape that is too close to the home is watered, the foundation and soil expand. Then, when no watering occurs, the foundation dries up and shrinks and this can cause it to crack.

Remember, knowledge is power, so learning about the home before you close the deal on it will keep you from making a mistake that may cost you extra out-of-pocket money later.

Copyright © by Realty Times