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Archive for February, 2011

Buying a New Home? Why a REALTOR® can help.

Monday, February 28th, 2011

Nicky from the Northside asks, “How does it work if I wanna buy a new home?”

Purchasing a new home has its advantages, primarily among them is your ability to pick floor plans and finishes, providing you get in early enough in the build process.

Some clients can’t find what they are looking for in the used market, this is especially the case if they have needs that fall outside the typical home owner’s.

Builders come in a wide variety from starter home to luxury home builders. The mid-range builders will often have a number of completed or nearly completed “spec” homes which are homes they choose the plan, lot and finishes for, build and sell to buyers that don’t want to wait the eight months or so that it takes to build a home from scratch. 

What many buyers don’t realize in all of this is that they can still be represented by a realtor and get all the benefits from doing so just as though they were buying a pre-owned home.

Here are some key points to keep in mind:

     If you do not have a signed written agreement with your realtor, find out why. This signed agreement will ensure that you are being shown everything on the market no matter what the builder or seller is offering the buyer’s realtor as compensation. This way your realtor can truly work in your best interests with no hidden agenda going on regarding his/her fees.

     Have your realtor introduce you to the show home staff or builder, avoid walking in for the first time without your representative (realtor) with you. This serves two purposes, firstly the builder will be more likely to include in the negotiated price all or a portion of your realtor’s fees without having to negotiate that into the price and secondly, you can be told things by the sales people that aren’t in the contract you sign which will leave you with an unrealized expectation. Your realtor will be able to define for you the actual outcome so it reduces or eliminates any misleading “sales talk”. The bottom line is you want to end up getting what you thought you were getting and all for the price you wanted to pay and not a penny more, right?

     The sales people in the show homes are employees of the builder in most cases. Sometimes the builder will hire a realtor to sell their home in either case the sales person or realtor is representing the builder not you. This is key as it tells you where their loyalties lie. Don’t go in with the assumption that they are looking out entirely for what is best for you. Your realtor will be interested in making sure the home will suit your needs and that you will be happy when all is said and done.

     Go over the purchase contract thoroughly as it, is written in favour of the builder. This is not the case with a “standard” purchase contract supplied to your realtor from the Alberta Real Estate Association or AREA, which treats both the buyer and the seller in an even-handed manner tending not to favour one over the other. For example the builder contracts will typically give the buyer 10 days to cancel the deal for any reason, if you don’t say anything, after 10 days the contract is binding and all deposits become non-refundable. In contrast the “standard” AREA contract allows for contigencies such as financing and inspection with a certain amount of time to fulfill these. Once you have financing in order and have completed an inspection you will then have to sign a document saying you are moving forward with the deal, it just doesn’t happen automatically after 10 days. Also, delays in possession caused by the builder are forgiven in most cases whereas, if you, the buyer delays the posession you can be fined. The point is to know what each clause means in the contract so that you move forward with eyes wide open and are not surprised when something goes wrong or not as planned, which often happens when building.

     What about inspections? Do you need to hire your own inspector to check the home out, after all it is a brand new home? The sales people, from my experience will discourage you from getting an inspector in but will not stop you from doing so. Just like a pre-owned home, the inspector can find things wrong that you would otherwise not find out about. Things like missing insulation, lack or caulking, unfinished walls, built-in dishwashers not hooked up, etc. I recommend getting an inspection for both new and pre-owned homes. The inspector can compile a list of deficiencies that the site supervisor can ensure are remedied prior to possession so you get a home that you can sign off on without having to allow trades people in after you move to fix things that should have been taken care of before. Many reputable builders strive to achieve a “zero deficiency possession” because it is not only inconvenient for the new owner but costly for the builder to schedule trades around the new owners time frame. If something major is found by the inspector your lawyer can be informed and if warranted a hold back can be put in place until the problem is rectified. A “hold back” is a portion of the money you paid for the home being kept in your lawyer’s trust until such time as certain expectations are met or not at which time the money is forwarded to the seller/builder or to you the buyer as the case may be.

     Not all realtors will represent you on a new home purchase, this is primarily because it can be eight months or more before they get paid. Some builders will pay the realtor once the ten days has passed and the home is “sold”. In either case work with a realtor who is not under the gun financially needing to be paid right away and off to the next deal once they are leaving you with unanswered questions. Ensure your realtor will back you up and be there for you even after you are in the home enjoying it. I’ve heard it said that it is not what you do before you get paid it is what you continue to do after you get paid that ultimately wins over your client and ensures repeat and referral business.

     Is price negotiable? Absolutely, even when the sales people indicate that it isn’t possible. The key point here is to ensure your realtor provides you with enough market information and comparables for you to determine what the fair market value for that property is, no matter what the asking price is or how many other buyers have “indicated they want to write on this one”. With this number in mind you know what you will start at and what your top dollar is before you put pen to paper. Remember you are in the driver’s seat. In the case of a seller’s market your numbers may have to be adjusted a bit but this again is reflected in the fair market value determined by you with the help of your realtor, the market conditions and the comparable properties that have recently sold.

     If you have any questions on this or any real estate matter, you can contact me via kevin@kevingrenier.com or 780-893-0269. Don’t forget to subscribe to my blog for more informative articles and monthly updates. I look forward to hearing from you and being of assistance in any way I can.

 

Best Regards,

 

Kevin

 

 

 

 

Top 5 House Selling Strategies

Thursday, February 24th, 2011

Get all your real estate questions answered pertaining to buying a home

Monday, February 21st, 2011

 

 


 

New Dates Added

Preferred Client Update

Wednesday, February 9th, 2011

If you’d like to be added to the newsletter email list email me to let me know.

Informed Home Buyer/Seller – Is it Possible to Make Home Shopping Fun?

Thursday, February 3rd, 2011

More Dates Added!

Market Update from the Realtor’s Assocation of Edmonton – February 2nd, 2011

Thursday, February 3rd, 2011

The following is the monthly press release from the Realtor’s Association of Edmonton in its entirety. If you have any questions on this or would like further detailed statistics, information or analysis, contact me at www.kevingrenier.com

 

Homebuyers dig into snow banks not wallets in January

Edmonton, February 2, 2011: According to the REALTORS® Association of Edmonton the average price of housing increased slightly in January as compared to the previous month. The all-residential average price rose three quarters of a percent to $310,766; up from $308,497 in December. Single family homes rose a quarter of a percent while condo prices dropped just over one percent during the month.

Residential sales of 735 were on par with December sales (834) and sales in January 2009 (775) but off 21% from the same month last year (931). Residential listing activity rose from 1,102 units in December 2010 to 2,142 units in January. Inventory of homes on the Multiple Listing Service® System decreased from 5,721 at year end to 5,633 as of January 31.

“Traditionally the market dips in December but inventory starts to build in January to supply the spring market,” explained REALTORS® Association of Edmonton President Chris Mooney. “Prices are up slightly but the cold weather seems to have kept buyers and sellers out of the market. We expect sales activity to increase along with spring temperatures and continue all through the first two quarters.”

The average* price of single family dwellings in January was $356,276 with a median price of $349,900. Condo average price was $220,993 with a median of $214,000. Duplex and rowhouse prices also dropped on average from $315,163 to $297,587 a 5.6% drop. All prices reflected sales across the entire Edmonton region including surrounding communities and counties.

Mooney suggested that changes to mortgage qualification rules would not have the same effect that last year’s rule changes had. “In 2010, people reacted early to the changes and completed their home purchases earlier than usual. The reduction from 35 to 30 year amortization limits will come into effect on March 18 but we do not expect it to affect a large number of purchasers,” said Mooney.

The average days-on-market in January was 67 days up from 53 last year. The residential sales-to-listing ratio was a low 34% in January and total MLS® System sales were almost $253 million.

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Highlights of MLS® System activity

 

¹. Residential includes SFD, condos and duplex/row houses.
². Single Family Dwelling
³. The middle figure in a list of all sales prices

* Average prices indicate market trends only. They do not reflect actual changes for a particular property, which may vary from house to house and area to area. Prior period figures have been adjusted to include late reported sales and cancellations and therefore reflect a more accurate view of the period than previously reported at month end.

 

 

 

With all the bad news on mortgage restrictions and interest rate hikes, here is some good news!

Thursday, February 3rd, 2011

  

The following was taken from an email I received from my trusted RBC Mortgage Specialist, Sheri Mitchel:

 

“New RBC lending programs for homebuyers with limited down payment

 

“RBC has recently launched two mortgage programs that can help get purchasers who have limited down payment and a solid credit history into a home sooner.   Through these programs, buyers with limited funds for down payment may be allowed to use borrowed funds or Mortgage Cash Back offers to assist them in meeting the 5% equity requirement for default insured mortgages.

 

“Other important details of these new programs include:

 

  • Available for home purchases only
  • The property must be a owner occupied primary residence and all mortgage applicants must reside at the property
  • Mortgage Cash Back and funds borrowed for down payment cannot exceed 5% of purchase price
  • Available to clients for one mortgage only” 
  •  

    For more information or to arrange an appointment with either myself or Sheri contact me at either 780-893-0269 or kevin@kevingrenier.com 


     

    The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the REALTORS® Association of Edmonton. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.