Starting out with too high of a listing price will add to the stress of selling your home.

Ideally, during the first few weeks, your home should be overflowing with activity.  Listing agents will market and promote your home to other agents who are working with homebuyers, increasing your personal sales force.

If you have overpriced, chances are fewer agents will promote your home to their clients.  As REALTORS®, it is their job to know the market demand and fair market value of a home. If your home was dramatically priced above market value, you will essentially be wasting your time.

Dropping Your Price Too Late

Your house could take longer to sell if you start with a high list price and then drop it later.  By this point, your house has become “old news” and has lost the chance of overflowing activity that you would have received with a realistic price.

Even if you were to sell your home at an above market price to an uninformed buyer, that buyer will likely need a mortgage.  Their lender may require an appraisal. If comparable sales and current market conditions do not support your sales price, the house won’t appraise and the deal will then fall apart.

If your home sits on the market a while, it is harder to get a good offer.  Overpricing your home in the beginning, then dropping the price may look like you are desperate to sell and potential buyers may make lower offers.  You could actually end up settling for a lower price than you would have normally received.

Of course, you want to receive the highest price for your home.  If you start out with a list price that is too high, you likely interviewed other agents who didn’t get the listing.

If your listing agent engages in “buying” listings if your home didn’t sell in x number of days on the market, chances are they probably pushed through other agents to tell you what you want to hear.  Now you’ve ended up with an agent who was good at selling you, but not good at selling your home and got paid the commission for it.

It’s tempting to choose the agent who tells you exactly what you want to hear.  Instead, look for honest advice agents will give. This way you won’t be frustrated about why your house didn’t sell close enough to the price you had listed it for.

There are countless advantages to purchasing a new home. You are able to build equity, enjoy pride of ownership, and truly make a home your own. If you are planning to buy property in the near future, preparing now can help you save time and money. Being prepared may also give you an advantage over other buyers. Here are a few tips to consider prior to your home search.

Know Your Bottom Line Before You Start Looking at Homes

I’m sure you’ve heard this before, but think about more than just knowing what price you are willing to pay. Consider the distance you’re willing to commute to work, the number of bedrooms and bathrooms you require and what you need in terms of local amenities. If you have children, you’ll likely want to consider schools and parks in the area. By determining your bottom line before you begin the search for a home you can avoid making snap decisions based on emotional responses to attractive home features.

Credit Check

Life happens, bad credit happens. But who wants to discover that they have a bad credit rating after finding the home of their dreams? Before meeting a lender, you can obtain a copy of your report which will give you an opportunity to take care of any unsettled debts. You can obtain a copy of your credit report from TransUnion or Equifax.

Avoid Major Purchases Prior to Buying a Home

Lenders tend to be uneasy when they see potential homeowners stretch their disposable income into buying a car or boat for example. Such purchases can make it difficult to obtain a mortgage or may lower the amount you can be approved for.

Anticipate Higher Interest Rates

Recalculate the above maximum monthly mortgage payment based on higher interest rates. Ask yourself if you can afford to pay a higher monthly payment without sacrificing other commitments.

Determine Your Cash Flow at the Time of Purchase

There are various fees involved with a real estate transaction which are outlined here. Moving from a rental suite, you should be prepared for expenses that may have been previously included with your rent such as heat, water, electricity or cable.

Your Paperwork Should Be in Order

Lenders will often need to see bank statements, pay stubs, and tax documents for the past two years.

Get Pre-Qualified for a Loan

Once you have a calculated budget you can live with, approach a lender to find out if you can get pre-qualified for a mortgage and how much you can spend on a home.

Buying a home is not only a lifestyle change, but it’s also an important investment. To make the most of your investment, plan ahead to find the right home and the best rates.

Buying a home is typically a very exciting time for most people, whether you’re a first time homebuyer or this is the fourteenth time.

Many people think of the basic costs like legal fees, GST (in some cases), property tax adjustments, the cost of movers, set-up fees for utilities, new window coverings, etc.  If you’re a first-time homeowner you should also consider home maintenance costs like purchasing tools, a lawnmower, etc. You may also have to consider some major costs like replacing flooring, windows, or roofs.

On the opposite side, some buyers may gain a cost-benefit from purchasing a new home.  You could purchase in a development that has a fitness center or swimming pool – so no more gym membership or transportation fees.

Next, you’ll want to consider the location.  Look at the location from many viewpoints by asking yourself “Where am I going to live relative to…?”  That relative to should include work (yours and your spouses), leisure activities (children’s classes, golf memberships, night school etc.), children’s school or daycare, proximity to family, best friends or the old neighbourhood.

Life rarely goes according to schedule, so try to determine the likely disruptions to a perfect schedule:

• How often do you or your spouse have to work late or unusual hours?

• Is your commute very efficient?

• Does this mean your children may have to miss soccer practice or other activities they enjoy?

• Is the commute likely to leave you too tired by the time you get home?

It can sometimes be overlooked, but consider the value of your purchase in relation to the emotional costs associated with the purchase.  When you buy a home you want to be satisfied on all counts.

How to Find the Right Home For You

You’ve gotten your finances sorted and you’ve now been pre-approved with a budget in mind, what should you do? Well, now comes the fun part. Searching for the house that’s right for you.

Wants vs. Needs

First I recommend to sit down and determine your wants vs. needs. This is a big one that will help you determine what is important to you and what you are willing to negotiate on. In an ideal world, you will be able to find a home with all of your wants and needs under budget, however, realistically, you may have to decide what you’re willing to give on. Use my Wants vs. Needs checklist found here to help you and come up with a better picture of what it is you are looking for.

Research

After we’ve determined what it is you are looking for, I will go through the current listings and see what is available that meets your criteria and email the possibilities to you. Do some research on your own as well, I recommend using Realtor.ca for a complete list of all current listings. Online searching is definitely the best way to search in today’s market. Maybe something catches your eye that you didn’t necessarily think would.

Going to See

Once we’ve narrowed down the list to some possibilities, we’ll go and have a look at the properties. Sometimes is hard to get an idea of floor plan and sometimes the pictures don’t do the home justice online so it’s best to have a look for yourself. I find that you usually can tell shortly after seeing the home if it’s something you can envision yourself in or not. More often than not I’ve found, you walk in and you will just know that it’s the one for you.

The Offer Process

Writing

Once you have found the place you’d like to call home, it’s now time to put in an offer. After deciding on things like possession date, the conditions you want placed on the purchase, what you’d like included with the house, and a price you are willing to pay for the home, I will take your deposit and submit the offer to the other agent. Once I’ve heard back if the offer has been accepted or not will determine what is to come next in the process. If it’s rejected or countered, we will handle the situation as it comes. If it’s been accepted, then we get to move on to the next step.

Conditions

Typically we have about 7 days to remove all of the conditions we’ve placed on the offer. Usually, we will have a financing condition, a home inspection condition, and reviewing the property condition disclosure statement. This statement is what the seller fills out when they list their home and they answer a number of questions as to their honest opinion of the condition of the home. It just gives us a better idea of the history of the home. Because you’ve already been pre-approved, the financing should be no problem. I will submit the accepted offer to your banker and if they require any other paperwork from you for your pre-approval to become approved, now is the time to get it to them. Lastly, the home inspection condition is an important one. I will arrange a home inspection through a trusted and certified home inspector to go and give you a better understanding of the condition of the home. He won’t say if the home passes or fails an inspection, that’s up for you to decide, he’ll just give us a clearer picture as to the issues and things that need to be addressed.

Condos

If you have purchased a condo, there is another, automatic condition that gets placed on the offer. This is called the Schedule C or the estoppel package request. This condition allows you to review the contents of the estoppel package given by the condominium corporation specifically for the unit you are interested in purchasing. In the package contains items such as the financials for the condo corporation, the insurance policy, bylaws, reserve fund study, information on parking, and any other pertinent information related to the unit. You will have 5 days to review the information package once it’s received, and once the time has elapsed, it is assumed that you are in agreeance and is automatically removed.

If you do not wish to proceed at this stage before the condition removal date, your deposit is refunded or my office will hang on to it and we can apply it to the next house we find. If you do wish to proceed with the purchase, then we remove conditions and congratulations are in order. You just bought a house!