If you’re thinking about buying a home you probably have considered some of the following questions. As these are commonly asked questions I thought I’d share some answers to get you started:
1. Should I talk with a bank before looking at homes?
The answer is always YES. Getting ‘pre-approved’ from your mortgage specialist will alleviate some of the frustration and uncertainty as you get started in the home buying process. Most importantly, speaking with your mortgage specialist will help you to understand how much you can afford. Imagine looking at a $300,000 home only to fall in love with it! It is your dream home and you MUST have it. Now imagine the heartbreak when you go to your bank only to find out the maximum price you should be looking at is $250,000. Now you are upset and disheartened because you are missing out on a home you fell in love with. Don’t do that to yourself - find out where you stand BEFORE you look.
For first time home buyers, you need to speak with a bank beforehand as there are many first time home buyer programs out there (and they are ever changing) that you should be made aware of.
Another important reason to talk with a mortgage professional before you begin the house hunt is to prepare you with an outline of the expected costs associated with buying a home.
2. Before I look for a new home should I sell my current home?
That will depend on several factors. Can you afford to finance two properties simultaneously?
If you buy a home before selling your current home you may have to make your offer contingent upon the sale of your existing home. Owners usually will want to add in an option clause where they can look at other offers in the meantime and give you X amount of hours to remove your conditions or they will accept an offer from a different buyer. Thus you lose your new home and have to start looking all over again.
On the other hand, if you sell your home before you start looking for your new home what if there isn’t a suitable hew home that suits your needs at the time?
3. Do I really need a REALTOR® when buying a home?
There are so many reasons you should have a REALTOR® working to represent your best interests in this process. When choosing an agent consider looking for an Accredited Buyer’s Representative - we have specialized training to serve you better :) Don’t just call the agent on the sign - take your time to research and carefully consider who you want to represent you in this life event.
4. Who pays the REALTOR® fees when buying a home?
Cost - This is one of the reasons buyers consider NOT enlisting the services of a qualified REALTOR® to protect them. Of interest is that in most cases the seller pays the real estate fees so why wouldn’t you take advantage of having someone represent your best interest?
5. Should I buy or continue to rent?
One of the best investments you can make in your lifetime is the purchase of your own home. But, sometimes renting can be a better option and here is one situation: What if you know your job location is likely to change within a year and you will be asked to move? This may very well be one situation that renting is a better option for you. Are you ready for the extra cost and responsibility of maintaining your own home? If not, you may want to reconsider giving up that rental.
6. What about a rent-to-own property?
A rare find. Most home owners must sell their property in order to finance a purchase of another property so having their property tied up in a rent-to-own is not possible. Another fact is that offering a rent-to-own is usually a very high risk situation as most rent-to-own buyers don’t have a great credit score. Taking this high risk into consideration the rent-to-own must offer exceptionally favourable terms for the owner (leading to less than ideal terms for the buyer).
Those are just a few of the most frequently asked questions I come across in the buying process. If you still have unanswered questions please don’t hesitate to get in touch with me so that I can clarify things for you. If you are considering buying a property I’d love to work with you…