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Buying a home, especially your first home, can be an emotional roller-coaster ride: one moment you’re filled with excitement when you find the home of your dreams, followed by anxiety as you decide how much to offer. Later on, you might second guess if you made the right decision


Knowing the right questions to ask and steps to take before starting the house hunt is one way to help keep those emotions in check. And, many common home buying missteps can be avoided by following these five tips:


1. Leave your emotions at the door:

As a buyer, decide where you want to live and which features in a home are important to you. Determine your maximum budget by speaking with a mortgage broker or financial institution and then stay firm, even if a bidding war arises. By making a plan and sticking with it, you will have an easier time walking away from a deal if it’s outside your comfort zone.

2. Read and understand everything before you sign:

Written agreements that you sign in the process of looking for and buying real estate, such as a representation agreement with the brokerage that is acting on your behalf and the agreement to buy or sell a property, are legally-binding contracts. That means you generally can’t back out of the agreement once you’ve signed on the dotted line. That’s why it is important that you understand everything in an agreement before you sign. If you don’t understand something, ask your real estate representative to explain it to you.

3. Be sure you and your representative are on the same page:

When working with a real estate representative, it’s important that both of you have a mutual understanding of what services he or she will be providing to help you buy or sell a home. Have a thorough conversation about the details and then make sure they are documented in any agreement you sign.

4. Know your tolerance for risk:

In a hot market, you may be tempted to submit an unconditional offer to get a leg up on the competition. But you need to consider whether you’re comfortable taking on that level of risk. Can you afford to fix a major issue with the home that an inspection may have detected? Or potentially lose your deposit or find yourself facing legal action by the seller if your lender denies your financing application and you’re unable to complete the deal? If not, then waiving conditions may not be the way to go to win a multiple offer situation for a home. If you do end up waiving conditions, be sure you have a contingency plan in place to manage any financial risks should they arise.

5. Be flexible and have a back-up plan in place:

Real estate transactions can happen at lightning speed, which means even the best-laid plans might have to be adjusted. What if your moving dates don’t line up? What if you have unbudgeted repairs? Think ahead and have a contingency plan in place. By preparing ahead of time, you will be well-positioned to respond to quick developments in your real estate transaction.

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  • Moving costs can vary based on volume, distance and whether you hire a professional mover. Have wiggle room in your budget to cover the cost.

Protect yourself

Make your offer conditional on mortgage financing, a home inspection, the sale of your existing home, and/or other factors that are important to you. These conditions provide you important protection as a buyer.

Check what’s inside the walls

As your real estate professional we look into the age and condition of the home’s systems, such as the plumbing and electrical. Find out if proper permits were pulled for any renovations. Consider a home inspection to further examine the home and don’t hesitate to ask questions.

Be specific

Make your offer as detailed as possible. Outline what will be included with the sale (e.g., appliances and light fixtures) and be clear if certain renovations need to be completed, based on the home inspection.

Plan ahead

If you encounter a bidding war, enter with a strategy. Set ground rules in advance about what you want from a home, what you’re willing to spend and what conditions must be met. Once your rules are set, stick to them.

Competing offers

It can be tempting to waive your conditions, such as a home inspection. Think twice before doing this.

Expect the unexpected

Does your closing date on your new home align with when you need to move out of your existing home? Have a contingency plan in place in case the dates don’t match up.


Above all, working with us as your registered real estate professional we will help you navigate the many steps and decisions involved in the home buying process. 

TEN MISTAKES MADE WHEN BUYING A HOME

Tips for making the selection process easier

 When your REALTOR™ accompanies you on the showing, take a few minutes to take some notes. With multiple back-to-back showings purchasers often remark to us that they are mixing up details and features they have seen as they make comparisons. Record any notable features, architecture and design elements. List what changes you would make and what details really stand out . You will especially want to write down your first impressions of each home.

Pay attention to the homes’ surroundings. Generally, avoid the most upgraded home on the block. Is it a friendly neighborhood? Will parking be an issue? Are there schools in the area?


MISTAKE #1: Choosing a real estate agent who is not committed to forming a strong business relationship with you.


HERE'S HOW TO AVOID IT: Interview more than one REALTOR™. When you compare, you see that we’re committed to making a professional connection with you and are dedicated to serving your needs before, during and after the sale. We live, work, play and invest in the communities we serve.


MISTAKE #2:Making an offer on a home without being pre-qualified


HERE'S HOW TO AVOID IT: Mortgage financing has become of highly specialized area and you need to rely on more than just your REALTOR™ for sound financial advice.

Pre-qualification of your financing arrangements will make your life easier.

Take the time to talk with your bank or mortgage broker. Their specific questions with regards to income, debt and other factors will help you determine the price range that you can afford.

This is one of the most important steps on the path to home ownership.

Banks will have a relatively rigid set of products and tools to work with. Brokers will shop the mortgage financing market to try to find you specialty products or private mortgages that will accommodate your requirements. In either case there should be no up-front fee for the service of these lenders.

Getting pre-approval helps to avoid hiccups or obstacles before you begin shopping.

Being pre-approved also helps determine your potential monthly costs and a price range in which you can work. And it protects you from fluctuating rates by guaranteeing that rate for a period of time, typically 90-120 days.


What does a Lender consider when looking at your mortgage application?

Income and Job stability: income determines how much you can borrow. In most cases it is 32 per cent of your gross income. All other debts must not exceed an additional 8 per cent of your gross income.

Credit history: Your credit score must show that you pay your bills on time. If not you may still be approved but the interest rate may be higher


What the lender is going to need from you to get you qualified:

-Income confirmation in the form of a letter of employment and your most recent pay stub.

-Confirmation of a down payment and the source of it. Statements, RRSP statements, stocks etc. showing a three month history. If there is a large lump sum deposit you will likely be asked to explain where the deposit originated.

-For mortgages where the down payment is less than 20 per cent of the purchase price, you will be asked to demonstrate that you have access to 1.5 per cent of the purchase price in your bank account. This can be shown by way of a line of credit, credit card, gift from family, savings etc, in case closing costs run higher than expected.


MISTAKE #3:Not knowing the total costs involved.


HERE'S HOW TO AVOID IT: Early in the buying process ask your REALTOR™ and mortgage representative for an estimate of the costs involved in completing a purchase (sometimes called closing costs). These include title insurance, lawyers’ fees and disbursements, land transfer taxes, registration fees and HST on some portions of the services provided.


MISTAKE #4: Limiting your search to open houses, ads or the internet.


HERE'S HOW TO AVOID IT: Many homes listed in magazines or on the web may have already sold. Your best course of action is to work with a REALTOR™ who has up-to-date local market information that is not available to the public. REALTORS™ may even know of a property that is not listed for sale yet that may fit your needs giving you the inside scoop.


MISTAKE #5:Not following through on due diligence.


HERE'S HOW TO AVOID IT: Due diligence means you do your homework. Your REALTOR™ will help pull together the relevant information on your property. Make a list of thoughts or concerns you have relating to the property. Ask about schools, new home warranties, neighbours and neighbourhoods. This is likely the largest single purchase you will ever make so remember, there are no dumb questions.


MISTAKE #6: Not having a home inspection.


HERE'S HOW TO AVOID IT: Trying to save money today can end up costing you tomorrow. Please discuss the pros and cons with your REALTOR™. A qualified licensed home inspector can detect issues that many buyers might overlook. This is probably the best $400-$500 you will ever spend. While in a competitive situation may not enable you to have an inspection done, it is highly recommended. Whenever possible, have an inspection done so that you're completely informed about your purchase.


MISTAKE #7:Not examining insurance issues.

HERE'S HOW TO AVOID IT: If you are financing the property purchase, your lender will require insurance to protect their interest in your property.

But you’ll also want to cover liability and protect your personal belongings and growing equity in your home.

Here again, we recommend that you consult with a professional in that field and shop around for a good deal. Do this as soon as there is a specific address that you can discuss with an insurance agent. If the home has a checkered history for insurance claims, the cost of coverage could be too high.

In most cases your offer to purchase a home will include a condition that allows you to be sure that it is possible to insure the home at a reasonable cost.

Advice from an insurance agent can provide you with answers to any questions you may have.


MISTAKE #8:Not considering long term needs.

HERE'S HOW TO AVOID IT: It is important to think ahead. Will this home suit your needs 3-5 years from now? How about 5-10 years? Will you be able to maintain or grow your equity before you need to sell?


MISTAKE #9:Thinking that there is only one perfect home out there.


HERE'S HOW TO AVOID IT: Buying a home is a process of elimination, not selection. New properties arrive on the market daily, so be open to all possibilities. Ask your REALTOR™ for regular market updates and a comparative analysis for any property you are considering for purchase. This compares similar homes that have recently sold or are for sale currently


MISTAKE #10:Not considering the future re-sale of the property.


HERE'S HOW TO AVOID IT: Keep in mind that someday you will be the seller of this property. Have you considered all the possible influences on the value of the property such as development in the area, relocation or upgrading of major roads, employment influences etc. This is one of the best reasons to use a local REALTOR™ with a good working knowledge of the area.


SURPRISED TO FIND YOUR IDENTITY STOLEN?

Stolen Identity: You go out of your way to safeguard your home, your business, even your car stereo.

However, what if it’s your identity that thieves are really after?

In this increasingly digitized world -- where personal information is just the click of a mouse away -- identity theft is becoming more common, and more expensive.

ID theft has impacted one out of six adult Canadians, more than 4.2 million people, either directly or within their immediate households.

The poll, conducted in 2006 by the Strategic Counsel for the Competition Bureau of Canada, suggests that 17% of people 18 or older have been victimized. The problem is real and is not going away anytime soon.

Be smart. Unless you have initiated the contact, never give out your personal information over e-mail, the internet or the phone. Identity thieves often pose as government officials, bank representatives or credit card companies in the hope that you will provide them with your personal information.


What’s your ID worth?: Stolen identities are peddled on the internet for about $100 each


Check and double check: Credit card fraud is the most common type of identity theft, making it especially important to review your statements each month and look for any unauthorized charges. If an identity thief has your account information, he or she can call the company and have them redirect the bill to a different address, so if your statement is late or never arrives, call the company.


Protect your passwords: Use a combination of numbers, capital and lower-case letters when creating the passwords for computer, e-mail and Internet accounts. Never use an obvious password, like your maiden name or birth date.


Destroy the evidence: Before you dispose of sensitive documents including bills, credit card receipts, pre-approved credit cards give them a good shredding. Pulling these sensitive materials out of the trash is a favorite ploy of identity thieves.


Purge your wallet: Never carry your SIN card in your wallet. Store it in a safe location instead. Also eliminate any unnecessary credit cards or ID cards.


Safeguard your mail: Don’t leave outgoing mail in your mailbox -- it’s easy for thieves to swipe it and pull bank numbers from cheques or personal information from bills. Use post office drop boxes instead.

What to do when your wallet/purse has been stolen:

Call your bank and credit card companies: Tell the representative that your card is missing, report what time you noticed it was missing, and if you can, state the last time is was used and what purchase was last made.

Notify your local Ministry of Transportation: To get a replacement driver’s license, you’ll need to provide the office with documentation that proves your identity, such as a birth certificate or passport.

File a police report: This helps add validity to your story.

Keep a copy of the report in case unauthorized charges start showing up on your account.

A police report will come in handy if your bank or credit card company asks for proof of the crime.

If your passport is missing: Report it to Passport Canada immediately at 1-800-567-6868.

If your SIN card is missing: Contact the police and Service Canada at 1-800-206-7218.

Contact the credit bureaus: Ask the two major credit bureaus, Equifax and TransUnion, to place a security alert on your file. This alert states that you are a victim of fraud and that any company accessing your report should verify your identification before granting credit.

Keep a close eye on your accounts: Watch for future misuse and file reports if you find any further unauthorized transactions. You may also want to contact PhoneBusters, the national anti-fraud call centre, for additional assistance or advice. Their phone number is 1-888-495-8501.

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