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. 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. 8 things to look for when you buy When you fall in love with a home, the things you like about it can blind you to its problems. Next time you go to an open house or tour a property with an agent, keep your eyes open with these top tips: 1. Take a look at general upkeep. Is it clean? Are lawns left uncut? Do walls need paint? If the small stuff hasn't been taken care of, there's a good chance that bigger issues have been ignored as well. 2. Test it. Try out lights, faucets, toilets, air conditioning and major appliances. 3. Check for water damage. Look at ceilings and drywall for stains and bulges. Water that works its way in through a leaky roof or a cracked foundation can rot wood, create mildew and destroy possessions. 4. Watch for "spongy" floors. Take note of soft, springy sections, squeaky or uneven areas - these can be a sign that costly floor repairs are needed. 5. Check doors and windows. Make sure they fit snugly in their jambs and operate smoothly. Feel for drafts. Look for flaked paint and loose caulking - if wood isn't protected from moisture, it will rot. 6. Look at the foundation. If you see deep cracks or loose mortar and bricks, there may be a significant structural problem. Soggy areas near the foundation are also a warning sign. 7. Make sure there's enough storage space. If you are moving from a home with large closets and a shed, make sure your new house is able to store an equivalent amount of belongings. 8. Measure. Make sure your furniture will fit into your new house. These tips are for your own first (or second) look at a home. For true peace of mind, you should always hire a certified home inspector before you buy. 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. Making an offer When it comes time to make an offer, your Royal LePage Real Estate Professional will provide current market information and help you draft a suitable offer. He or she will then communicate the offer to the seller (or the seller's representative) on your behalf. Sometimes there may be more than one offer on a property coming in at the same time. Your agent will guide you through this process. An Offer to Purchase* An Offer to Purchase is a legal document which specifies the terms and conditions of your offer to purchase the home. The offer can be firm or conditional. Firm Offer to Purchase: preferable to the seller because it means you are prepared to purchase the home without any conditions. If the offer is accepted, the home is yours. Conditional Offer to Purchase: means that you have placed one or more conditions on the purchase, such as "subject to home inspection," "subject to financing" or "subject to sale of buyer's existing home." The home is not sold until all the conditions have been met. *In the province of Quebec, this is referred to as a "Promise to Purchase." Acceptance of the Offer Your Offer to Purchase will be presented as soon as possible. The seller may accept the offer, reject it, or submit a counter-offer. The counter-offer may be in reference to the price, the closing date, or any number of variables. The offers can go back and forth until both parties have agreed or one of you ends the negotiations. 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. Buyers' market The supply of homes on the market exceeds demand. Characteristics High inventory of homes Few buyers compared to availability Homes on the market longer Prices tend to drop Implications More time to look for a home More negotiating leverage Sellers' market The number of buyers wanting homes exceeds the supply of homes on the market. Characteristics Smaller inventory of homes Many buyers Homes sell quickly Prices usually increase Implications May have to pay more Must make decisions quickly Conditional offers may be rejected Balanced market The number of homes on the market is equal to the number of buyers. Characteristics Sellers accept reasonable offers Homes sell within an acceptable time period Prices generally stable Implications More relaxed atmosphere Reasonable number of homes to choose from