If you only remember five things when purchasing real estate, they should be these tips, advises Vancouver agent Alyssa Dotson
Alyssa Dotson
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There’s a lot to remember when buying real estate, and much of the available advice is scattered all over the internet. So what are the most important rules to stick to? Before you decide to invest in your and your family’s future by purchasing a home, it is important to keep these key points in mind above all else.
1. Know Your Limit, Stay Within It
Getting a pre-approved mortgage should always be step one towards home ownership. Most buyers start off with searching the MLS system to see what is on the market. But, wether you are a first time home buyer or a veteran in the real estate game, although this home search is important, getting preapproved at this initial stage is more important.
If you first identify your budget limitations, you can then sort potential properties by price and neighbourhood. This will allow you to apply a streamline approach to house hunting enabling you to search more effectively and efficiently with realistic expectations.
Mortgage brokers and financial advisors at banks provide preapprovals that guarantee a mortgage rate hold for a specified period of time – usually between 90 and 120 days. You will need to fill out a mortgage pre-approval application where you will be requested to provide income information and verification. You will need to sign to give permission for your credit to be checked as well. A favorable credit report is crucial for getting a mortgage funded.
2. Get the Undivided Loyalty of a Buyer’s Agent
Many buyers believe that if they go directly to the listing agent it will be advantageous to them, but having the undivided loyalty of your own real estate agent is extremely beneficial to a buyer. A buyer’s agent is an advisor and an advocate for their client’s primary needs and best interests. They research, educate, negotiate and protect with exclusive attention to your preferred details.
When you approach a listing agent directly, the agent has the choice to provide you with representation or to decline it. They may enter into a limited dual agency relationship with permission from their seller. A limited dual agency occurs when the designated agent represents both the buyer and seller in the same transaction, or two buyers competing for the same property. In this arrangement, the Realtor cannot be concerned exclusively with your interests in the transaction, since they are acting on behalf of the other party as well.
Another option for the listing agent is to enter into a customer relationship with a buyer. In this case, you will be using their services without having any kind of agency relationship. In this situation the agent is not permitted to recommend or suggest a price or negotiate on your behalf.
3. Be Extra Careful if Making a Subject-Free Offer
In this current, somewhat exceptional, real estate market we are seeing offers being made completely void of subject clauses. Subject clauses are put in place to protect the buyer by granting the course of due diligence. When these clauses are omitted the buyer is vulnerable. Although it is necessary to remain competitive in this market, you must be aware of the potential consequences of submitting a subject-free offer. To ensure some safety, request that the seller provide your Realtor with the title, property disclosure statement and any other necessary documents that can be incorporated into the contract when drafting the offer to purchase, thus allowing it to remain subject free.
As a general rule of thumb, I insist on my buyers having a home inspection carried out. This is not a clause that I am comfortable removing. That being said, I have occasionally ventured out of my personal and professional comfort zone on the insistence of my buyer and with a signed inspection waiver. In these cases, I educated my buyer and they made an informed decision to proceed.
4. Skeletons Do Live in Closets
What you don’t see is what you get. Since walls can’t speak, let a licensed, certified home inspector speak for them. A typical home inspection includes an assessment of: exterior features such as outside walls, the roof, gutters, eaves, fascia, balconies, decks, chimneys and drainage conditions; interior items, such as the condition of windows, doors, plumbing fixtures and electrical outlets and switches; heating and cooling systems etc. A home inspector that also checks appliances is a bonus and in some circumstances a necessity if there is an appliance warranty clause incorporated into the contract.
5. Insure Your Home and Mortgage
All insurance is not created equal. Mortgage insurance is imperative but you do have options. Speak to a licensed insurance agent outside of your mortgage provider to learn more alternatives regarding products and pricing. In addition, content insurance is essential for complete protection.
© 2015 Real Estate Weekly