This is a guest post by Sean Cooper.
We are officially in a seller’s market in Canada’s biggest city, Toronto – with housing prices up a whopping ten per cent to $476,371 in June 2011 from just a year ago, first time home buyers are finding it increasingly difficult to afford a house. If you have saved up enough for a down payment that’s only half the battle – you’ll have to find a house you like and have the winning offer before your dream can finally be yours.
Location, location, location
You probably already have your dream neighbourhood in mind, but there’s a lot more than meets the eye. If you like a house it’s a good idea to drive by during a typical Saturday night to see if the neighbours are noisy. Also, if you don’t own a car, consider your house’s distance from the necessities like public transit, shopping, schools and the public library. Even something as simple as living near a stop sign or near a bus stop can be a major deterrent, so be sure to keep your eyes open.
When you’re in a multiple offer situation if you think that the highest offer is always key to winning the house you may be wrong. It’s important to consider the seller’s motivation for putting their house on the market. If they’ve already bought another house, then a clean offer – an offer with no conditions such as financing or inspection – could make your offer stand out and win you your dream house. Be sure to speak with the listing agent and gather as much information as possible without tipping your hand.
Editors Note: I would recommend getting an inspection. At the bare minimum, have a friend/family member who is experienced with construction to do a detailed walk through prior to the offer.
Research, research, research
You’ve probably heard it before: the three most important things in real estate are “location, location, location”. Well, when it comes to searching for your dream home I say the three most important things are “research, research, research”.
Finding a real estate agent that knows the area you want to buy in is key. Attending open houses is an excellent way to network with local agents and see how much houses are listed for. Once you’ve found the right agent, it’s a good idea to ask for comparables – houses that recently sold in the area – before making an offer to ensure you make a strong first offer, but don’t end up overpaying. Houses prices can vary widely from city to city and even from neighbourhood to neighbourhood, so it’s important to know your market because this is most likely the biggest purchase of your life.
Major Repairs vs Cosmetic Improvements
You’ve finally found your dream home… or so you think. It has been freshly painted, the kitchen has been redone, it has beautiful crown molding and a white picket fence out front. Everything seems perfect until you start to take a closer look: the roof is aging and the furnace needs to be replaced soon. Although cosmetic improvements are nice, they are a lot less costly than major house repairs, such as central air, amp, roof, furnace and windows.
Before you get excited and make an offer , make a second appointment and be sure to bring a second set of experienced eyes like your parents or a friend who is a handyperson. Something as simple as a slanted chimney can cost $5,000 to repair. If you are weary of something you can have a home inspector do a quick drive by of the property – it will give you a better idea of extra money you’ll need for repairs and give you something to negotiate with when you put in an offer.
About the Author: Sean Cooper is a single, 20-something year old, first time home buyer located in Toronto. He has experience in the financial sector as a Pension Analyst, RESP administrator and Income Tax Preparer. He holds a Bachelor of Commerce in business management from Ryerson University.