Buying Kamloops Real Estate > Home Buyer's Guide > Viewing Homes > Don't Pay Too Much for Your Next Home

 

KAMLOOPS REAL ESTATE

HOME BUYER'S GUIDE: DON'T OVERPAY


dont overpay

This article helps you become a savvy buyer by pointing out some of the pitfalls inherent in the home buying process. These include things like knowing what you want before you begin shopping, taking your time to shop, choosing the right real estate professional, and remaining objective while viewing potential homes. With this information, you'll be closer to finding your ideal home while saving yourself some money!

BEFORE YOU SHOP, MAKE A NEEDS VS. WANTS LIST

Everyone has a picture of their ideal home. While it's nice to think about having a beautifully landscaped backyard, a solarium, or built in appliances, these are usually considered luxury items that can add considerably to the price of your home.

Before you start shopping, make a list of your needs and wants. With this list begin with items you really need like adequate space, a garage and number of bedrooms. For most people basic needs should be considered first. After that you could consider additional desires if you can manage these benefits financially. By thinking about this early, you're less likely to be caught up in the excitement of the pursuit: you'll have a good idea of what you want, within your price range, and whether or not you can afford any additional items.

GET PRE-APPROVED PRIOR TO SHOPPING

Visit your financial or lending institution prior to home buying. You'll quickly know the amount of mortgage you qualify for. Be sure to get a mortgage commitment in writing. Most importantly, this tells sellers that you're a serious prospect. Depending upon market conditions, a seller may lean towards an unconditional offer. You'll have less negotiating power if you have to wait for mortgage approval. Banks and financial institutions have developed many programs especially for home buyers, be they first-time buyers or those with equity in their homes. When you review your needs and objectives with a lending officer, you'll be one step closer to purchasing your home.

CHOOSE YOUR TEAM

Buying a home is a complicated process with many people involved. From choosing the right mortgage, to finding a home inspector, to viewing available properties, there are many steps involved for even the hardiest person. With one of our REALTORS® on your side, you'll have access to these services, already in place and highly recommended. A good agent will have the knowledge and experience developed from many years of helping both buyers and sellers. During this time they will have developed a network of people from lenders, lawyers, home inspectors and movers to assist both home buyers and sellers.

COMMUNICATE CLEARLY WITH YOUR REALTOR®

Spending time with your REALTOR® will reap huge dividends. When you have a clear picture of the type of home you're looking for, your REALTOR® can come closer to finding the home you want and you'll spend less time looking at homes that don't match your needs.

IT'S STILL TRUE — LOCATION, LOCATION, LOCATION!

You've heard it so many times and it's because it's true! A home isn't a standalone item - rather the value of a home is greatly affected by the surrounding homes. Don't let your emotions determine your purchase - think resale. The desirability and resale value of your home depends largely on location more than any other factor. People want a desirable community that includes character, quality of schools, access to work, major transportation arteries, recreational facilities, etc.

Walk around the neighbourhood to get a feel for the people living in the area. You may want to speak with a few neighbors to get their comments. If you like the community, carefully examine the home you like. Generally speaking, extremely large homes surrounded by smaller homes tend to appreciate less than a large home among other large homes. Alternatively, the smallest home in the neighbourhood tends to stand out by the other homes on the block. Sometimes it could take a bit longer to sell a smaller home, as some people are reluctant to pay extra for the neighbourhood. Additional factors that affect the property value of a home include traffic, zoning bylaws, sounds, smells. Be objective. Don't rely too heavily on your emotions. If you choose a neighbourhood with problems, you likely won't get as much as you'd hoped when it comes time to sell!

USE YOUR REALTOR'S® KNOWLEDGE OF THE COMMUNITY

Your REALTOR® is trained in all aspects of real estate, including understanding supply and demand, economics, and the neighbourhoods of the city in which they practice. As they regularly view homes as they're placed on the market, they're at the heartbeat of knowledge and information about housing trends and prices. They can save you time and money by narrowing your prospects to only those that meet your requirements. It's a very time-consuming process to view every home available that meets your needs. A real estate professional can do much of the work for you by reviewing your needs, reviewing the properties, and then hopefully advising you of a potential match. A comprehensive knowledge of the available homes in your neighbourhood is one of your real estate professional's strongest assets. With the aid of technology a real estate professional is notified within minutes when a home becomes available.

CHECK YOUR EMOTIONS & SHOP WITH YOUR HEAD

When people purchase a home on emotion without an objective view of the property, problems may develop later. Shopping for a home is an emotional process. Using your head and asking for an objective opinion from your REALTOR® could help you avoid costly errors. When evaluating a home be sure you know the difference between acceptable and unacceptable problems. Cosmetic items like peeling paint, worn carpeting, unattractive wallpaper can be easily remedied. You could use these as negotiating items as there will be costs involved in updating the home. Major problems however are clearly "red flags." Look for items such as major foundation cracks, water damage, outdated electrical systems and inadequate plumbing. These items could cost you in the future!

HIRING A HOME INSPECTOR IS A WISE INVESTMENT

A home inspection is an inexpensive way to gain peace of mind and guard your wallet. A proper inspection will cover all areas of the house including foundation, electrical, heating, plumbing, floors, walls, ceilings, attic, roof, etc. A professional inspector can give you an objective view of the property with a written report indicating the present condition and things that will need repair.

BE CAUTIOUS WITH FIXER-UPPERS

Some people may be inclined towards purchasing a home that needs some work. This could be both a challenge and an opportunity to make money. Sometimes a fixer-upper can be purchased below market value and sufficient repairs made to bring it to a good sale condition with a profit realized. However, not all fixer-uppers will bring in the profits you might expect! It depends upon the price of the home, the amount of repairs needed and the market conditions at the time of sale. If the home isn't priced low enough you may not recover your investment of time, trouble and money. Before you purchase carefully consider the condition of the home and ALL the repairs that need to be made. Get several estimates, complete a comprehensive budget, and be sure to consult with your REALTOR®. He or she can give you an idea of what you can reasonably expect to recover when the home is put back on the market.

CONSIDER YOUR FUTURE NEEDS

Take a look at your lifestyle now and in the future. Will you need extra space for a home office, a child or perhaps a child moving back home? It may be easier and less expensive if you purchase a home that can meet these needs now rather than moving up to a larger home a few years later.

PROCEED QUICKLY

When you're ready to buy, move fairly quickly - good properties sell fast. This is especially true when there's a shortage of homes available! Remember that when you work with a REALTOR®, you have access to the most current access to properties within hours of when they are listed. When a REALTOR® knows your needs, they'll notify you quickly when properties that meet your needs become available. REALTORS® or brokerages often have web sites which allow you to sign in as a client and receive notifications of these listings via email. You save time, effort, and you can view only those homes that come closest to your needs!

Remember, while you definitely want to move quickly, once you have made the decision to purchase you don't want to cave in to pressure for a quick close. Someone who's trying to pressure you into buying a home is likely doing so for a multitude of reasons.

CLARIFY RELATIONSHIPS

In any real estate transaction be very clear about who's working for who and what the relationship represents. Many people believe that the agent they're working with automatically represents them and their interests. Yet without specific disclosures this isn't always true. Unless otherwise stated, the agent represents the seller in transactions for the sale of a home. This agent, as part of his or her fiduciary duty must ensure his loyalty protects the seller's position throughout the entire process. If you're ever unsure, speak to a REALTOR® that is uninvolved in the transaction.

ASK FOR A CMA

A Comparative Market Analysis (CMA) shows you the sale prices of comparable homes in the neighbourhood, along with the listed asking prices of other homes in the area currently on the market. A REALTOR® can request this report for any home and neighbourhood in Canada. With this valuable document, you'll have the appropriate evidence for either a too-high asking price or one that is a bargain.

KEEP PERSONAL INFORMATION TO YOURSELF

Information could be used to your detriment. Information about your mortgage, size of down payment, move-in deadline, or circumstances for buying, could be negotiating factors. While you want your REALTOR® to know these details, don't reveal any of this information to the seller.

EXERCISE YOUR NEGOTIATING SKILLS

Even if you prefer not to haggle it's worth it - especially when it's your home and your future! Your REALTOR® will do most of this for you with your guidance in pricing. Sellers often set a bit higher price than whats reasonable to leave room for negotiation. A REALTOR® will be able to get you the best home possible for the least amount of money - but negotiation is the only way to get a good deal!

INSIST ON A WRITTEN DISCLOSURE OF ALL KNOWN DEFECTS

Legally, sellers must disclose all known material defects of a property. It's important to ask for this in writing. Be sure to consider the ramifications of these defects... Will it be costly down the road? How serious are they?

BE AWARE OF YOUR HIDDEN COSTS

There's more to a home than simply a mortgage. You may be responsible for other items including mortgage insurance, appraisal fees, legal fees, inspection fees, transfer taxes, title insurance, inspections, etc. Your REALTOR® can give you a good idea of the costs associated with buying a home that are beyond the final negotiated price of your home.