One of the most important decisions a homebuyer must make is choosing the right neighbourhood. While this is a very personal decision that often hinges on hundreds of different factors, you should always keep in mind the following:
The asking prices of most properties that are for sale reflect present market conditions and recent sale prices of similar homes in the area. When homeowners price their homes they try to walk the fine line between getting the highest price and ensuring the asking price is competitive enough to attract serious offers. While most Selling Agents advise their clients to realistically price their homes in order to attract acceptable offers within a reasonable period of time, some properties may not be properly priced and you should know this before making an offer.
Before making an offer to purchase a home, you should ask yourself the following questions:
By having this information at your fingertips you will be in a better position to negotiate the best price and take advantage of any opportunities that may show up. This is where the experience and knowledge of a good REALTOR is invaluable. REALTORS spend a lot of time and energy making sure they know their local market inside and out. They keep their finger on the pulse of the market and have the resources, connections and ability to keep you up-to-date with its constant changes. They know all of the properties currently for sale in your area and are literally your best resource for finding the perfect home.
The main factors that affect market value are: |
Location:
Property:
Condition of the Home:
Comparable Properties:
Market Conditions and the Economy:
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Market Conditions: |
No matter what the condition or desirability of a property, its value will be affected by current market conditions. Here are the various conditions you may encounter and how they will affect you: Balanced Market: The number of homes on the market is equal to the number of buyers (supply equals demand). In this market, prices are stable and homes sell within a reasonable period of time. It is a calm atmosphere with Buyers having a satisfactory number of homes from which to choose. Seller's Market: The number of Buyers exceeds the number of homes on the market (demand greater than supply). In this market prices are increasing and homes tend to sell quickly. As a Buyer you will probably have less negotiating room and may experience competing offers when trying to purchase your home. Buyer's Market: The supply of homes exceeds the number of Buyers (supply greater than demand). In this scenario prices tend to drop and the properties stay on the market longer. As a Buyer you will have more selection and less competition and thus be better able to negotiate a good deal. In Summary: When you understand current market conditions, you are better able to position yourself as a Buyer. It helps to know if you are in a Seller's, Buyer's or balanced market when deciding what price to offer. In a Seller's market, there is little selection and you may have to make a full-price (or even higher) offer if the home is properly priced in order beat the competition. In a Buyer's market, you have a lot more selection and plenty of room to negotiate. In a balanced market you will find a good selection of homes for sale and have a reasonable amount of time to decide on a home and negotiate the price. |
Few of us would consider buying a used car without first having a mechanic look it over, or at least taking it out for a test drive. Yet that is exactly what many buyers do when buying a resale home. They often fail to have a professional home inspection performed on the home they are interested in, even though it is probably the largest and most important investment they will ever make.
Fortunately, there is a growing industry of home inspectors to fill this gap. Unless you are an expert, it is highly unlikely that you will catch a home's minor, or sometimes even major, problems during a typical house viewing. This is why it is important to obtain a professional unbiased second opinion before making such an important decision.
A good home inspector will give you an unbiased assessment of the structural and mechanical soundness of the home. He or she will identify any existing or potential problem areas, and give an overview of the condition of the foundation, basement, roof, windows, doors, walls, ceilings, floors, plumbing, electrical, heating & cooling systems. The best inspectors will also make suggestions on how to solve any problems they discover and give a general estimate of possible costs.
A Home Inspection is the best way to 'test drive' your new home. It allows you to make your purchase with confidence. It avoids nasty surprises once the deal has closed, and it offers the chance to rethink or renegotiate an offer if serious concerns do arise.
When hiring a home inspector, make sure of the following:
The selling and buying of a house can be a stressful and confusing process. Not only is it very expensive to 'learn from your mistakes' but very few people move often enough to gain the needed experience.
Although there is no substitute for doing your homework (start by asking your family and friends who have recently moved for their experiences) the following list of common pitfalls may be helpful.
When you are pre-approved, you are effectively a cash buyer. This makes it much easier to negotiate with the seller. Do not mistake pre-approval with pre-qualification; pre-qualification is only the first step in gaining pre-approval. Ask your Banker or REALTOR for details.
How do traffic patterns change depending on the day, or even the time of day? Are there any future developments in the works? Is that nice greenspace down the road actually zoned for high-rise development? Ask around - check it out first.
Do your homework. What have similar properties sold for in the immediate area? How long were they on the market? How does this one compare? Is it over-priced, under-priced, or fair value? Ask your REALTOR for an up-to-date market summary.
There are entire books written on how the first impression of a home is the single most decisive factor affecting many purchasers' decision to buy. Don't let bad décor or messy housekeeping scare you away from a structurally solid home that meets all your needs. Remember, you are buying the house, not the furnishings.
When buying a house, consider getting a professional property inspection. Not only will you know what you are buying, but these reports will protect you from unforeseen nasty surprises in both the short and long run.
Like many industries, banks are experiencing increased competition and are often willing to negotiate mortgage rates. Depending upon the market and profit spreads, it is sometimes possible to negotiate substantial savings. Ask your Banker or REALTOR for details.
If you wait until the last minute, you will be rushed in finding insurance. Allow time to shop around and get the best deal.
Do not wait until the last minute before reading the documents; there probably will not be time. Try to get copies of all documents early on in your home search so that you can peruse them at your leisure.
Not only are they harder to enforce, but any written contract you sign will override a verbal agreement. Contract law says that verbal agreements are not enforceable when they deal with Real Property. Always get it in writing!
If you do not know your rights, then you can be taken advantage of. If you do not know your obligations, you may inadvertently cause friction between yourself and those with whom you are about to enter a contract. Both your REALTOR and Lawyer are great sources of information concerning this - make use of their expertise and resources.
The majority of purchasers are not overly surprised by the findings of their home inspection. Before getting this far, they have usually had a very close look at the property. And yes, they already know about the peeling paint and old furnace. They may even have noticed the wet basement and taken that into account when making their offer.
It is when an inspection uncovers something unexpected that an inspection condition could save you from making a major mistake. Below are some of the more common problems found in a typical home inspection. While most of these problems are usually obvious and have already been reflected in the purchase price, a home inspection lets you know if your personal opinion of the structural condition of the property is correct (i.e. is it in as good of shape as I think it is?).
Poor overall maintenance usually leads to a large range of problems that will require the new homeowner's attention. These can include everything from peeling paint to rotting decks.
These problems are typical in older homes, and can cover everything from cracked plaster to small movements in the foundation. While they are not likely to cause the house to fall down, they should be corrected before they become more serious.
This is the most common problem found. It often leads to damp or even wet basements. Correction can range from installing new roof gutters and downspouts to digging up the weeping tiles or simply re-grading the surrounding lawn to channel surface water away from the house.
It is very common to find older homes with undersized services, aluminum wiring, knob-and-tub wiring or inadequate/poorly-renovated distribution systems. It is important to have these problems looked into since they are potentially dangerous.
It is also very common to find plumbing problems in older homes. Repairs can range from a simple 10-minute fix to expensive replacement. It is a good idea to get an expert opinion.
On average an asphalt roof lasts 15 to 20 years. It is difficult to estimate roof age accurately from the ground unless the roof is either very new or very close to the end of its lifespan. You also need to know how many layers are under it in order to determine if the roof needs to be completely stripped before installing the new shingles.
Older and poorly maintained heating/cooling systems are inefficient and could pose a serious safety and health risk. While replacement may seem expensive, the newer more efficient systems do reduce heating/cooling costs substantially, thus helping to recoup your investment.
Excessive moisture from unvented bathrooms and cooking areas can damage plaster, promote the growth of mold and fungus, deteriorate windows and cause allergic reactions. These problems need to be corrected before the damage becomes excessive.
Poor weather stripping, badly fitted doors, deteriorated caulking and poor attic seals all contribute to a cold and drafty home. Repairs are usually simple and inexpensive.
These can include asbestos, formaldehyde, leaking underground oil tanks, nearby gas stations, contaminated drinking water, lead-based paint and radon gas. It is important to discuss these potential hazards with a professional and arrange for a specialized inspection if necessary.
Buying a home is a complex and stressful undertaking; Getting an expert to help will save you time, money, and aggravation.
The Advantages of working with a REALTOR® are: |
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