Buyer FAQs
There are endless ways to improve your home’s curb appeal, but here are a few items that I find make a huge difference. Pressure wash your driveway, walkways and siding. This is often the first thing that you will notice when approaching a home. You can even consider getting your driveway resealed to appear as fresh as possible. Clean both sides of every window. Be sure to touch up any paint on exterior doors and door handles. If you have a fence, make sure that fence posts are plumb, and that the wood does not appear rotted or fading. The same goes for any decks or patios. Landscaping is a big one! Tidy up your gardens, lay down some fresh mulch, pull all of the weeds, trim the hedges, cut your grass, and don’t forget to edge your lawn. Be sure to declutter and get rid of any garbage that is around the exterior of your house. These all may seem like small items, but it is the little things that make a big difference. First impressions last a lifetime!
Much like home improvement, nothing is stopping you from doing it yourself. You may be able to sell your home without an agent just fine, but the results may not be as successful as if you hired a professional to advise you, and negotiate on your behalf. Visit my blog to read an interesting article on homeowners who have sold their properties privately vs. Using an agent.
The two main costs when selling your home are your legal fees and your agent’s commission. Legal fees are roughly $1,000-$1,500 depending on the property. In the area you will see agents commissions ranging from 4%-6% depending on the level of service and marketing that you would like. A few additional costs that may arise are professional cleaning costs, moving costs, repairs or improvements that have been negotiated into the sale, etc.
If you feel like it’s time to consider purchasing your first home, things can feel a bit overwhelming. It’s important to keep in mind that homeownership may not be for everybody. If you plan on staying in the same place for even just a few years, it’s my personal opinion that renting is always a better option. Instead of paying your landlord, your monthly payments go towards your mortgage. This means that you are building equity every month, as opposed to throwing money away. Traditionally, home values have only ever increased. Even after a few corrections over the past few decades, home prices on average remain high and climbing. Some years have even seen as much as a 20% increase over the course of 12 months. This is a massive opportunity that was missed by a lot of people who were ‘speculating’ on purchasing a home.
But money is not everything. Purchasing a home is a life decision. If you have, or are planning to have, a family, homeownership can provide stability. No more worrying whether your landlord will renew your lease, sell, or increase the rent. As long as you continue to pay your bills, you are guaranteed a place to live and grow. You are also rewarded with the freedom to customize your home and turn it into exactly what you want/need it to be.
You will want to go into your first purchase with a bit of a nest egg. Consider setting aside roughly 10% of the purchase price of the home that you are interested in. You will be required to put a minimum down payment of 5%, and closing costs typically run you around 3% on top of that. The extra 2% can go towards cosmetic upgrades or maintenance items that need attention right away.
Before you start looking at homes, it is best to speak with a mortgage broker to look over your financial situation and determine how much you can afford to borrow. This can be done completely free of charge. If you are not in a position to borrow enough money to purchase a home at the moment, they will help you come up with a plan to better position yourself. I work closely with a number of mortgage brokers. I am happy to put you in touch with somebody if you are not working with one already.
A home appraisal may be a requirement for your mortgage. When an appraisal is necessary, ideally it will return a value on par with or higher than your offered purchase price for the home. You’ll want to ensure the appraisal is completed and satisfactory before waiving your financing condition. A good agent will ensure you don’t offer more than the home is worth.
If your appraisal comes back lower than your offered purchase price, you’ll need to cover the difference. If you’re still within your conditional period, you may renegotiate with the sellers or consider backing out of the deal. If the appraisal arrives after your conditions have been waived, you’re in a tough situation. You’ve made a firm commitment to purchase the home. You may work with the lender to request an appeal or a second appraisal. If that’s not possible, you’ll need to cover the difference. Failing to close on a firm transaction exposes you to litigation for damages.
A well priced home can sell over the course of a weekend. If you price your home competitively, you can normally dictate the closing date. If you want to stay put for 90 days, just ask. If you need a quick closing, that’s up to you. In a balanced market, with a home that is not selling quickly, the closing date can often become a point of negotiation.
I believe that it is always a good idea to have a home stager come in for a consultation. This is an expense that I cover for all clients. During the consultation, the stager will walk through your house and highlight things that can be done with your existing furniture and fixtures to maximize the experience for buyers. This may be as simple as repositioning your sofa and a few photos. They may even suggest a different paint colour in select areas. It is important to remember that these are suggestions from a professional, however, you should not be forced to make these changes. If your home is vacant, it is a great idea to consider fully staging a home. Many buyers have trouble imagining how they would live in the space. A stager will come in with some stylish furniture and turn the home into an experience. This can be costly, but in my experience staging has resulted in impressive sales prices that more than make up for the upfront cost of the services.
Determining the right asking price for your home is an underrated process and can be absolutely crucial in securing top dollar for your property. This is where a good agent will stand out from an average agent. Your agent should walk you through a Comparative Market Analysis (CMA) that highlights all similar homes in the neighbourhood that have sold within an appropriate time frame. You will factor in many things – square footage, number of bedrooms, number of bathrooms, age of finishes, lot size, time of sale, location, construction style, garage, etc. etc. After reviewing all relevant items and comparing improvement costs and recent market trends, you should be able to come up with a realistic sale price. Beyond that, you need to consider pricing strategy. In certain price ranges or locations, sometimes it can benefit you to list your house at a number slightly below market value. This will entice a wider range of prospective buyers. The more feet through your door, the more likely you are to see multiple offers. There is a listing strategy where you will “hold offers” until a certain date, and have prospective buyers all submit their offer at the same time. What we see happening in these situations is higher sales prices, as people are making competitive “bids” on the home. The most traditional way to price your home is to list it at what you have determined to be the market value. This strategy may see slightly less showings, however you will be making it quite clear to prospective buyers what you are hoping to get for the home. Depending on the property, this approach may yield a slower sale, but every person’s situation is different. You should always have an honest conversation with your agent to determine the most appropriate approach with all factors considered.
If you’re borrowing money for a home purchase through a traditional mortgage, your affordability boils down to your credit, savings, income, and debt service ratio. Having a knowledgeable mortgage broker on your side is essential, as they’ll strive to position you favourably with lenders. If there are items on your file that could be cleaned up to satisfy a lender, your mortgage broker should inform you well in advance. If you don’t already have a mortgage broker you work with, I’d be happy to recommend one from the many I collaborate with regularly.