ERNIE’S REAL ESTATE EZINE
4th Week of July 2010 edition:
A GOOD TIME TO BUY!
Now that the craziness of a few months ago is behind us in Real Estate, with the bidding wars and 1 day of listing a house, it is a good time to buy a house. The market has slowed down a bit in Toronto but that doesn’t mean people are not buying properties. The market is still moving. It has just stabilized in my opinion.
The interest rates have gone up and there is the dreaded HST. If you take a step back and look at the interest rates, they are still low. The HST yes it is an added cost on services and new homes but it is like anything in this world, add it to the price. The cost of living goes up every year.
The good thing is that there is a lot more selection for buyers right now. The selection is keeping prices and sellers in check with their egos. Agents who were taking advantage of the shortage are no longer. The days of no condition buying is over for now. Buyers can rejoice!
So here are some IDEAS to think about when finding a new home:
IDEA #1 GET PRE-APPROVED FOR A MORTGAGE:
Go to your bank or mortgage broker and get pre-approved for a mortgage. This will determine what you can afford and make sure that you are not shopping for a house you cannot afford. You don’t want to get into a situation where you put an offer on a house and sign all the documents and then after you find out your financing is not there. This is how you get sued and find yourself in court.
IDEA #2 FIND OUT THE HIDDEN COSTS
Like so many people buying a house for the first time, they are shocked to find out that there are costs associated with closing the deal. Some of these costs include lawyer fees, land transfer tax, home inspection, title insurance and there are many more. You need to find out what it will cost at closing. Do you have enough money to cover those costs. You do not want to be stuck trying to find money on the day of closing.
IDEA #3 RENOVATIONS
When you go take a look at the home and you like it, try to think what needs to be done to the house in order for you to match your dream of living there. What repairs are immediate? What luxuries do you want? How much will those cost? You need to figure out how much those costs are on top of the purchase price. You might want to try to negotiate those renovations into the deal. If you know that you want to renovate the property, bring in your sub-contractor to give you a rough estimate of those costs. It is better to know what you are going to have to pay in the future before buying your house.
IDEA #4 SEE COMPARABLES
Not only do you want to see other houses that are comparable, you want to look at houses that just sold that are similar. Comparing houses is a key in determining your offer. You don’t just want to go into an offer without taking a look at what else is selling in the neighborhood. You or your agent needs to know what is going on near by. You might see another house that is cheaper with more square footage, or with a bigger yard. This is how appraisers determine value on houses, as well as agents.
IDEA #5 EXAMINE THE HOUSE
I always suggest a home inspection. Inspectors are great, but you also need to examine the house yourself. Inspectors have insurance to cover them if they miss something, they are human and might miss something. You need to study the house. Study to see if there have been any renovations to roofs or floors, to hide water damage. Go over your inspectors findings and ask questions. This is the only way to determine for yourself if the house is a lemon.
IDEA #6 HIRE AN AGENT
I’m a little biased for this IDEA. Seriously, why not? Typically the sellers pay the commission, why not hire an agent that works for you? I don’t understand why some people will go to an open house and not already have an agent going in there? If you don’t have one, use the agent that is there? Multiple representation can work. Let an agent do the work for you. A good agent will do a great job finding you a house. Why would you want to look at out of date listings on the public MLS site. By the time you get them they are sold. There are many ways to find an agent, stand on a corner on a weekend and ten agents will be placing signs there for open houses. If you don’t like the house they are promoting then ask them to find you other houses.
Well that’s it for me this week. Have a great weekend and remember to have a great open house!