A few weeks ago I held a first time home buyer’s seminar. A lawyer, a mortgage advisor, an inspector and I talked about some of the important things first time home buyers should have knowledge of prior to purchasing, and I just thought I would share some of that information with you.
ADVANTAGES OF BUYING
[two]One of the first things discussed were the advantages of buying. One of the advantages of buying versus renting is that your payment remains the same. You don’t have to worry about your rent increasing on a year to year basis; you get to choose whether you want a fixed, variable, closed or an open mortgage rate. Another benefit of buying is that with each mortgage payment you are making an investment and building equity in your home.
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Conversely, once rent payments are made the money just disappears and you only help build someone else’s equity. Buying also guarantees you security for retirement because once your mortgage is paid, you will be rent free. Also, owning property enables you to make any changes to it that you want. You are able to colour the walls the colour you want and make improvements and renovate. Renters on the other hand are much more restricted in this department and are often not able to make any changes to the interior of their space.
THE SIX STEPS TO OWNING A HOME
The six steps to owning a home were also discussed. The first step to homeownership is selecting the right real estate representative for you. Interviewing a few real estate agents is a good way of determining which agent would best meet your needs. Making an appointment with a lender for getting a pre-approval is the second step in the process. This is an important step because you want to know you are pre approved prior to actually looking at houses. You don’t want to find a house you absolutely love only to find out you cannot afford it, and have your heart broken. Once you have been preapproved and you know what you can actually afford, you can start looking at houses with your real estate representative. Once you found the house you love you can place an offer on it, and your agent will negotiate in your favour. The next step is closing the deal. The agent should guide you so that you satisfy any and all of the conditions. The next step after having all the paperwork done is setting the moving date, making appointments and getting ready to move into your new home!
USING A REAL ESTATE AGENT
Going to the first step discussed in the paragraph above. When choosing an agent, you can choose to work with a Buyer’s Agent or the Listing Agent. Working with a buyer’s agent would make them your representative during the process, and you their client. She/He would be fully committed to you, would be obliged to advise you, protect your interests and negotiate on your behalf to get the best deal possible. When working with a Listing Agent, the buyer alternatively enters a customer relationship. The listing agent is obligated to give you honest information, but they do not necessarily need to keep your interests in mind, since they are in a contract with the seller.
WHAT DOES THE AGENT NOGOTIATE?
[two]The sales representative can negotiate the price of the home. The agent should provide you with information that will help you make an informed decision regarding the offer and price of the home. The agent can also negotiate the deposit. The deposit is generally about 5% of the purchase price, but your sales representative can suggest and negotiate a different amount for the deposit. The agent can also negotiate things that are included or excluded from the purchase price.
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For instance, if the buyer wishes to keep some of the appliances, fixtures or window coverings, the agent can attempt to have these items included with the purchase price.
If you would like to receive the full First Time Home Buyer’s Guide, call me at 647-504-0690, or email me at steven.ho@ssbhg.ca
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