Do you really need that backyard tennis court? Everyone can picture his or her ideal home. If you haven’t thoroughly prepared yourself prior to viewing houses, chances are that you will find what you think is your ideal home, and will wind up paying too much for it. It is essential to treat the buying process in a slightly detached manner. Those who fall in love with houses usually pay too much. It is recommended that you develop a list of "needs" and one of "wants". When looking at houses, make sure that they cover all of your needs – things like adequate space, a good neighbourhood, proximity to public transportation, perhaps a garage – and then have fun with items on your wants list. Treating the process in a systematic manner will help you to make a rational, informed decision.

 

Get pre-approved. Visit your lender prior to shopping. Be sure to get a mortgage commitment in writing. Being pre-approved gives you a solid price range, and lets your sales representative and potential sellers know that you are serious and not just a browser.

 

Get the right people behind you. Buying a home is a complicated process, with many people involved. Having the right people on your side can make a big difference. An experienced, dedicated, and knowledgeable agent can put a team of advocates, including lenders, lawyers, property inspectors and movers, on your side immediately.

 

Communicate. The more information you share with your salesperson, the better he or she will be able to represent you. Letting your agent know exactly what you’re looking for, in terms of needs/wants, price range and location, can eliminate unnecessary trips to unsuitable homes and can help ensure that you wind up in the right home.

 

Location, location, location. It’s still true. The desirability and resale value of your home will depend on location more than any other factor. People want a desirable community that includes character, quality schools, access to work, major transportation arteries, recreational facilities, etc. On your viewing trips, take a careful look and ask the following questions: How does this home compare to others in the neighbourhood? Are the yards fenced? Are there many children playing in the streets? Are the front and back yards and the exteriors of the homes properly maintained? Less expensive houses in a better area tend to appreciate faster than the most expensive houses in a less desirable area. Additional factors that affect the property value of a home include traffic, sounds, smells, zoning bylaws, hydro corridors as well as many others. Be objective. Be sure that you are completely satisfied with the neighbourhood. If you choose a neighbourhood with problems, you likely won’t get as much in return as you hope to when it comes time to sell.

 

Use your Real Estate Agent's knowledge. Your agent is trained in all aspects of real estate, including understanding supply and demand, economics, and the neighbourhoods of the city in which they practice. A professional salesperson can do much of the leg work for you, by reviewing your needs, reviewing and previewing available properties, and making an informed match. A comprehensive knowledge of the available homes in your neighbourhood is one of your salesperson's strongest assets. With the aid of computerized systems an agent can be immediately notified when a suitable home becomes available for one of their clients.

 

Pay attention to red flags. When evaluating a home, be sure you know the difference between acceptable and unacceptable problems. Cosmetic items like outdated paint, worn carpeting, or unattractive wallpaper can be easily remedied, and can often be used as negotiation items, as there will be costs involved in updating the home. Major problems, however, are clearly red flags. Look for items such as major foundation cracks, water damage, outdated electrical systems, and inadequate plumbing. These items could be too expensive to remedy to make the home a worthwhile investment.

 

Hire a home inspector. A home inspection is an inexpensive way to gain peace of mind, and guard your pocket book. A proper inspection will cover all areas of the house including foundation, electrical, heating, plumbing, floors, walls, ceilings, attic, roof, siding and trim, porches, patios, decks, garage and drainage. A professional inspector can give you an objective view of the property, with a written report, indicating the present condition and items that will need maintenance and repair.

 

Be cautious with fixer-uppers. Sometimes, a fixer-upper can be purchased below market value, and once sufficient repairs are made, can be sold at a significant profit. However, not all fixer-uppers will bring in the profits you might expect. Consumers often overestimate their level of dedication to doing extensive renovation work, and underestimate the costs associated with such work. A wall that needs to be replaced can often lead to the discovery of faulty plumbing, electrical, or other major undertakings. Your agent and home inspector are your best allies when it comes to cost-benefit analyses.

 

Consider your future needs. A move can be a major undertaking. Take a good look at your current lifestyle and consider the future. Will you need extra space for a home office, a child, or perhaps a child moving back home? Perhaps it may be easier and less expensive if you purchase a home that can meet these needs now, rather than moving up to a larger home a few years down the road.

 

When you’re ready to buy, act. Good properties sell fast. This is especially true given the current state of most real estate markets. However, when you work with an agent, you have access to the latest technology. As part of the MLS® and Local Real Estate Board networks, an agent has access to properties within minutes of when they are listed. Technology works to your advantage. Many sales representatives now have personalized websites that allow you to sign on as a client, and receive notification of new listings via email. You save time and effort, and you can view only those homes that come closest to meeting your needs.

 

Clarify relationships. In any real estate transaction, be very clear about who is working for whom, and what the relationship represents. Unless otherwise stated in a written agreement, a salesperson in Ontario represents the interests of the seller in transactions for the sale of a home. This agent, as part of his or her fiduciary duties, must ensure that the seller’s (and not your) position is represented throughout the entire process. Get a buyer’s representative on your side, or ensure that someone is acting in your best interests. If the agent is representing both parties, make sure you understand what they can and cannot tell you about the negotiation process and why.

 

Ask for a written Comparative Market Analysis. A Comparative Market Analysis (CMA) is an analysis of comparable homes in a given neighbourhood. It shows you the sale prices of comparable homes in the neighbourhood, along with the asking prices of other homes in the area currently for sale. If you are in an agency relationship, ask your agent for this report in writing. With this valuable document, you’ll have solid, reliable information about how fairly a home is priced compared to its' real market value.

 

Try and know the seller. Understanding a seller’s reasons for moving could work to your advantage during negotiations. Although these reasons do not need to be disclosed, often times a seller is not averse to offering this information. For instance, a seller who has been transferred to another city may be more motivated to sell than someone who is still shopping for a new home in the same city. A vacant house, or a house that has been on the market for several months and has been reduced in price, could also provide the opportunity for lucrative negotiations.

 

Keep it impersonal. Conversely, information could be used to your detriment. Information about your mortgage, size of down payment, move-in deadline, or circumstances for buying could be used to the seller’s benefit in negotiations. While you want your sales representative to know these details, maintain your poker face and keep your cards hidden if you happen to come into contact with the sellers and/or their representatives.

 

Measure twice, sign once. While you definitely want to move quickly once you’ve made the decision to purchase, you don’t want to cave in to pressure for a quick closure of this transaction. Someone who is trying to pressure you into buying a home is likely doing so for a reason. Make sure the reasons for you to buy a home are your reasons, not theirs.

 

Exercise your negotiating skills. Even if you prefer not to haggle, it’s worth it, especially when it’s your home and one of your biggest investments. Most people expect to negotiate over the price. There is usually some wiggle room for negotiation, and your salesperson should be a professional negotiator.

 

Avoid bidding wars. In some cases, a seller’s agent may use scare tactics to rush the sale or increase the price. Falling for this trap could cost you money. If there is another buyer, or some other reason this pressure is being applied, whoever wins may also lose because they may have overpaid. Let reason be your guide, not passion.

 

Ask for a Seller Property Information Statement. Legally, sellers must disclose all known material defects of a property during their ownership period. In Ontario, it is normally  outlined in a document called a Seller’s Property Information Statement (SPIS). Ask for this in writing when purchasing your home. Have old defects been remedied? Also be sure to consider the ramifications of any of these defects. Will they be costly down the road? Are they “serious” defects? Be informed before you buy.

 

Be aware of hidden costs. While agents sometimes tempt first-time buyers with rent/mortgage comparisons, there is more to a home than simply the mortgage. You will be responsible for other items including mortgage insurance, appraisal fees, legal fees, inspection fees, transfer taxes, title insurance, inspections, property tax, increased bills, etc. Your sales representative can give you a good idea of the costs associated with buying a home that are beyond its final negotiated price.