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.
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