TOOLS FOR HOME-BUYERS

WHY BUY A HOME?

Today, Canadian home-buyers have more choices than ever before. From financing options that are flexible and affordable, home styles that fit a variety of lifestyles, to real estate services that make the home buying process faster and more efficient.

If you are still not sure if homeownership is right for your situation, The CMC Real Estate Team can help guide you through the decision-making process. Here are some important facts about homeownership that may help you in answering the question: "Should I buy or rent?"

Homeownership can be a good investment opportunity. A house offers leverage and the possibility for appreciation in value. Keep in mind, you can use this investment while it's working for you!

• Homeownership may provides some tax advantages that can save you money each year.
• Home rental does not protect you from rising prices. Rental units are just as susceptible as homes to increases in taxes, insurance, utilities and other costs. Landlords have always passed along these increases to the tenants.
• Youth is not a barrier to homeownership. It is estimated that the average age of first-time buyers is 32 years old.
• The waiting game is a losing game. Don't put off buying a home by waiting for prices to come down. From 1994 to 2004, the median price of existing homes increased from $140,000 to $220,000. An increase of approximately 58%!
  
  
  

CHECKLIST:

• Determine your housing needs and wants to determine what types of houses you should be considering.
• Get your financial picture in focus as soon as possible. Since it is an important component, be aware of your credit situation.
• Begin the application process by getting pre-qualified and pre-approved from a Mortgage Lender.
• Familiarize yourself with the various types of housing available: Single family, townhouse, and condo.
• Make a scorecard for each house to help you keep track of the properties you've seen.
• Negotiate the best deal for you, using the information you have acquired.
• Arrange for a home inspection. Protect yourself and do not skip this step! Learn about home warranties and what they protect.
• Secure final loan approval and commitment from the lending institution. If you have done your "up-front" work, this should be one of your easiest steps.
• Do a final walk through of the house.
  
  

YOUR OFFER PRICE:

Before you set an offer price for a home, The CMC Real Estate Team can help you complete a Home Market Analysis. Our home evaluation presents an opportunity to review and evaluate the facts before you make a very important decision.

CMC'S Market Analysis will:

• Show what's happening in the local real estate market right now;
• Show what homes are selling for in your neighbourhood and what other buyers are willing to pay for them;
• Show you competing homes in the neighbourhood and how their price compares to the home you are considering;
  
• Show you homes in your neighbourhood that were on the market, but never got sold.
  
  

This analysis will help you look at the home you are considering to buy in relationship to competitive properties both active and sold.

Factors that should not affect your offer price:

• The original cost of the property - The price is determined by today's market value, not yesterday's or what the seller previously paid for the property.
• Opinions of friends or neighbours - Many times people far removed from the market certainly have strong opinions about real estate, but if they are not involved in the day-to-day happenings, many times myths become facts and cloud reality.
• Don't assume that you have to start at a number considerably less than the asking price - i.e. "I have always heard that you are supposed to start 10% below the asking price." Typically, if there was that much room in the asking price, the buyer would have the asking price reduced closer to what they expect the home to sell for.
• Don't do a per-square-foot analysis - Each home is different in terms of features and amenities despite square footage. Each of us could build a home with the same square footage, but with differing amenities and have totally different prices.
  
  

CMC'S objective is to provide you with the most current real estate information so that you are able to make an intelligent and accurate decision with your offer price. Our goal is to advise you on market value and keep you from paying too much for a property based on the analysis that we have done.

Financing Your Purchase:

The first step in financing a home purchase is to secure a loan. In order to secure a loan, you may need to compete a loan application. To do so, have the following information handy:

• Pay stubs for the past 3 months;
• Information on long-term debts;
• Recent bank statements;
• Tax returns for the past 2 years;
• Proof of any other income;
• Address and description of the property you wish to purchase, and
• The sales contract.
  
  

During the application process, the lender will order a report on your credit history and a professional appraisal of the property you want to purchase. The application process typically takes a few weeks to complete.

Remember: choose your lender carefully. Look for financial stability and a reputation for customer satisfaction. Be sure to choose a company that gives helpful advice and that makes you feel comfortable. A lender that has the authority to approve and process your loan locally is preferable, since it will be easier for you to monitor the status of your application and ask questions. Plus, it's beneficial when the lender knows home values and conditions in the local area. Do research and ask family, friends, and your CMC agent for recommendations.


WHAT ABOUT PRE-QUALIFIED LOANS?

Pre-qualification is an informal way to see how much you may be able to borrow. You can be "pre-qualified" over the phone with no paperwork by telling a lender your income, your long-term debts, and how large a down payment you can afford. Without any obligation, this helps you arrive at a ballpark figure of the amount you may have available to spend on a house.

Pre-approval is a lender's actual commitment to lend to you. It involves assembling financial records (without the property description and sales contract) and going through a preliminary approval process. Pre-approval gives you a definite idea of what you can afford and shows sellers that you are serious about buying.


For more information about how to finance your purchase, talk with a CMC Real Estate Team member.