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When I bought my first home I had no idea what I was doing. It was overwhelming and I didn’t know what I didn’t know.

I’ve since bought and sold numerous properties in BC and Alberta and later became a realtor myself with a busy decade + of helping people buy and sell homes in Calgary. 

Buying a home is often one of those things that is slow and super fast at the same time. So I thought the info below would help you find your way.

First, consider the things to think about before you find ‘the’ house such as money, realtors, paperwork, community, and general research.

Second, learn about free tools to help you research a specific property.

Money

 

Mortgages

Right now with mortgage rates fluctuating and home prices increasing there is a pressure to push financial limits. It’s easy to talk yourself into just a little extra each month but it’s really hard to live being house-poor.

Before you look at any property run through your financial and mortgage approvals with a mortgage broker. I suggest you find one not working for a major bank, but an independent financial advisor/broker. An independent financial advisor/broker may be more inclined to help you find the best deal among a variety of lenders rather than only offering products from their own institution in the case of agents at a major bank.

They can help explain mortgages, mortgage costs, and fees and help you get your pre-approvals in place.

 

Total Cost of Borrowing and Home Ownership

Depending on your mortgage type and the amount of your down payment, there may be additional costs of borrowing such as CMHC fees and other administration fees. Ask for the details so you understand your total mortgage amount.

Once you know the mortgage costs, find out about closing costs including property transfer taxes.

Then research ongoing costs of ownership such as municipal property taxes, utilities and municipal fees, insurance, and condo fees if applicable. Estimate annual maintenance costs. Then add it up. The total cost of ownership is more than just mortgage costs. Those condo fees can especially be a surprising additional cost.

Pay the Right Price

In some markets, homes are listed for sale and sell relatively close to that price. In other markets, homes are listed low to get multiple offers and sell much higher than listed.

Before looking at list prices to determine the type of home you can afford, do a bit of research to find out which market you are in. You want to see Sold Prices whenever possible and also how quickly homes sold.

If you are signing a fixed mortgage, say a typical 5-year fixed rate mortgage, when rates are high, ensure you understand what ‘interest rate differential’ means. It is an article in itself, but basically, you can’t just sell the home or change mortgage providers mid-term without paying the penalty calculated using the amount owing, the duration left in your mortgage term, and the interest rate difference between your existing rate and a new lower rate.

Have your mortgage broker explain these details to you. If they won’t explain them then get a new mortgage broker. This is especially important right now as there is a significant potential for mortgage rate drops in the coming months.

Realtors

 

Choosing the Right Realtor for You

Choosing a realtor is a big deal. I’ve worked with a number of realtors buying and selling properties in numerous cities and then been one myself. As with any profession, there are good and bad ones. It’s important to find one that you get along with and is a better fit for what you need.

It is ok to chat with a few different realtors and ask questions to make sure their areas of expertise match your needs. Many real estate boards require paperwork to be signed before viewing homes. It is ok to interview people and then sign once you are comfortable. Don’t feel pressured to sign and work with someone if you want to take more time to consider other options. On the flip side, don’t have a realtor show you 50 homes and then buy one through your cousin’s friend. That’s not cool either.

 

Some Potential Questions:

  • Have they bought and owned property themselves?
  • Do they work independently or as part of a team of people who may rotate schedules to assist you?
  • Do they know the area?
  • Do they have experience with the type of home you are looking for? For example, not all realtors have additional knowledge and experience with condos or country residential properties.
  • What is their availability?
  • How do they communicate with you?
  • Do they answer their phone when you call?
  • Do they work full time in real estate?

Understand Your Rights

One major suggestion: Do not work with the realtor who is listing the property you want to buy. Why? The listing realtor’s job is to get the house sold at the highest/best price. That is their primary job. The buyer’s realtor’s job is to represent the buyer’s interests and get the house bought at the lowest/best price.

The responsibilities of a realtor to their client are undivided loyalty, confidentiality, full disclosure, obedience, reasonable care and skill, and full accounting. How is it possible for one person to demonstrate that equally to both sides of the same negotiation?

Yes, you can be asked to sign away some of your rights and allow one realtor to represent you as the buyer while also representing the seller in this situation, but why would you?

Contracts and Paperwork

 

Read the Documents

Read the paperwork and contracts you will be signing before you present an offer for a specific home. I know it’s boring. But there’s some important stuff in there and you are spending huge sums of money. These contracts change regularly so even if you bought a home a few years ago, have another look.

Research Typical Conditions of Purchase

Also, have a chat with your realtor about common conditions of purchase and start researching what other professional services you will need to complete the purchase process. For example, some common conditions are financing and home inspection.

Older properties may require you to obtain specialists for conditions regarding wood-burning fireplaces, septic systems, wells, oil tanks, or sewer sewer scopes.

More modern homes may have solar panels, unique appliances, or automated systems that a standard home inspector may not be qualified to review.

If there are large structures on the property such as retaining walls on property lines, it is important to understand who is responsible for their maintenance and who can inspect them.

Community

If you are buying a home in a community that you have lived in for many years there are a lot of things you already know. You may remember which houses always seem to be for sale and which areas look well cared for while others have issues. You may know where the parking is always a challenge or where the best Halloween houses are. If you are new to an area then you don’t know these things. It’s worth a drive around and a check on community social media pages to get a sense of things.

Research

 

General Maintenance

Homes that have been well cared for will look good for their age. If you are looking at a few homes in the same community it will soon be easy for you to tell which have been maintained regularly and which have not.  Some research is needed to understand what is typical in the area you are looking at and the usual maintenance requirements.

Ask yourself: What is the typical heat source? Electrical? Water and plumbing? Are homes on municipal services, co-ops, or individual systems? When it comes time for the home inspection, attend and ask questions.

Radon testing is a more recent change to the industry and building codes have been updated to address radon mitigation in residential homes. Ask about radon testing and disclosures in your area.

Stigmatized Properties

Some homes have specific red flags or may be considered a stigmatized property with a history that you consider an issue but someone else may not. Sellers don’t have to tell you these things so you need to ask the questions.

Even with red flags, every property has value even if sometimes that value is just the land after the house is torn down. However, a home with an unusual issue/history may be worth less than a comparable home without that issue/history.

Warranty

Unless the home you are buying is recently built with a transferable builder warranty, there is no warranty. There are different rules in different municipalities and provinces about required disclosures for issues, defects, history, etc, but at the end of the day, it comes down to the buyer doing their research to ensure they are buying what they think they are buying.

Condo Corporations

If you are purchasing a condo such as an apartment or townhouse, the research includes understanding how a condo is structured. When buying a condo you also become responsible for your part of the total building/complex and there are often by-laws or rules to follow that may include limits on pets, parking, noise and how you use your unit. There are also financials and other documents to review.

What is important to you?

Looking at a specific property, what information would be the line between you buying or not buying a property? A former grow-op? Work completed without a permit? A death on the property? Future development around the corner? Zoning? A potential special assessment by the condo board? Some of these questions you have to directly ask, and others you can research.

 

Tools

Google Maps

Look up any property on Google Maps.

  • Turn on the terrain layer to see what is around the home. You may find unexpected infrastructure behind trees, small business registrations in your area, a beautiful park you didn’t know existed, transit stops and lines, and many more details.
  • Use the traffic layer at different times of day to see how busy things are around the area.
  • Look up a specific property and use the peg man icon to drop him on the street to look around. In this mode, you can also go back in time to view the area over previous years using the timebox in the upper left corner. You can see changes on the property over time as well as the homes around the area.

City Information and Mapping

In Calgary, the city provides a wide range of public information maps from development application maps, flood maps, pathways, parking zones, transit, and much more. Similar information is available for many cities and municipalities.

Is your potential home in a flood zone? Could this affect your insurance costs? Are there parking restrictions in your area that carry additional costs?

If you want to use your home for a specific use such as a home business or childcare? Finding out zoning and permit information to ensure you can use a specific home for business use.

Police Department

If you are concerned about the history of your property of interest you can visit your local police department to ask if there have been significant issues at a property. You can also have your realtor directly ask the listing agent a specific question.

Services

If you are looking for a home in an urban centre then you are most likely assuming all typical services are available to you, but otherwise, you may want to check which utilities, internet, and even delivery services are available in the area. Some apartment buildings don’t have a choice of service provider for internet/TV and if that’s an important consideration for you then it’s worth asking early in the process.

 

When you go and view homes and find ‘the one’, I hope that this information has helped prepare you to make your best decision. If you have any questions I can answer please feel free to contact me. I am happy to assist where I can and I am sure others have the same questions too.

 

May you always find your way home.