10 Tips for House Hunters
St. Thomas and Elgin have seen an influx of many newcomers to the area over the last couple of years. We are told it’s a “sellers’ market”. This means purchasers must move decisively in order to obtain the home they want. It does not, however, mean moving recklessly The following are my top ten tips for home-buyers:
1. Engage the services of a reputable real estate broker early in the hunt. If you are new to real estate purchasing, your own real estate representative can provide insight into market trends and favourable locations. If you are new to the area perhaps your home town real estate sales representative can make a referral to a local realtor.
2. Get involved with your lending institution through which you intend to arrange your mortgage, if any. At this stage a professional mortgage broker can be particularly helpful in finding the lowest interest rate and most favourable terms. Mortgage brokers do the “leg work” and their commissions are most often paid by the lending institution. At this stage, you may obtain a “pre-approval” for a mortgage. However, in reality, this is only a “rate hold”, pending the formal mortgage approval process. (See #7 below)
3. Through discussions with your realtor you will now determine the locality in which you wish to focus, your price range, style of home, proximity to schools, etc. Try not to look at too many homes during too short a period of time. Realtors tell me this only serves to confuse you (and annoy them) and often the details of specific properties become blurred.
4. Once a suitable home has been identified, thoroughly review the “vendor disclosure statement” if it is available. Often (but not always) the disclosure reveals items which limit the value of the property or indicate significant future expenditures. However, disclosure statements don’t replace thorough inspections .As well, the disclosure is only to “the best of the knowledge” of the seller. That, and a nickle... oh you know the rest.
5. You should now thoroughly inspect the property from top to bottom. Get the stars out of your eyes. This is your chance for a completely critical review of your future home. Take whatever time you need. If something appears to be hidden by furniture or other objects, speak to your realtor and be satisfied there are no hidden defects; at least, any that would be visible upon a reasonable inspection. (See #8 below)
6. If you are now ready to submit a serious offer to purchase the property, bear in mind this is likely to be the most significant single purchase you will ever make. You might consider reviewing the proposed offer with your lawyer. Contrary to popular opinion, lawyers generally prefer to put out fires before they become raging infernos. In my experience, clients usually prefer this as well.
7. The offer to purchase should contain a number of conditions, which if not satisfied will cancel the purchase. These will include arranging satisfactory financing ( in other words, getting a written commitment from a lending institution to lend you the amount of money you require to buy the specific property.) Other conditions may require satisfactory home inspection, satisfactory environmental tests, etc. Generally, any outstanding question after inspection should be the subject of a condition in the offer. Once again, it is wise to review such conditions with your lawyer.
8. At this point, I would like to make a special note regarding home inspections. Some people insert a condition requiring a satisfactory home inspection and then proceed to remove the condition without the inspection. Don’t do this. An inspection performed by an experienced home inspector may point out serious mechanical and physical issues which can seriously affect the marketability, value and insurability of the home. ( Ref:: knob and tube wiring, asbestos, urea formaldehyde, blue mold, old oil tank, etc.)
9. If you have a home to sell, of course your offer to purchase a new home should be made conditional upon an binding agreement to purchase your home. Once you have sold your old home, the closing dates of the two transactions should be coordinated. The closing dates do not, however, have to be identical. (See “bridging” below)
10. In situations where people are moving from out of the area, often “bridge financing” is arranged in order to allow the purchase to close ahead of the sale. I have personally observed several clients (especially ones with small children) manage to keep their sanity during a move by utilizing this simple technique. Bridging also allows for some repairs or renovations to be completed without the interference of furniture. Talk to your banker about this one. It’s worth it.
Welcome to St. Thomas and happy hunting.