Thinking of buying Real Estate? Some considerations…

Most buyers when investing in real estate will be seeking financing. There are lots of options when considering mortgage financing. When you are considering buying real estate, having unbiased professionals at your side is a good route to take. I believe there is a strong benefit in using professionals and it should begin with your real estate advisor.

Having a seasoned realtor who is knowledgeable in the type of real estate that you are interested in investing in is the beginning. Not only is the realtor there to counsel you on neighbourhoods, value, considerations etc, but will likely have at their disposal a list of other professionals with whom they have forged strong relationships and can provide other pieces of relevant information to you as a buyer to expand your knowledge base BEFORE you sign on the dotted line.
For example, in my office I have a list of “trusted partners” that the Exceptional Properties makes available to our clients. These are professionals in related fields with whom I have had direct experience and can vouch for their credibility. At no time is there any fee or remuneration paid from them to me as the referring realtor. I want our clients empowered with the most professional and accurate information in order to assist them to make  sound business decisions. Information is power!
If seeking mortgage financing for example, I have resources from both banks and mortgage brokerages. Often, people just want to stay within their own banking system so a referral to experts within that system is doable. However, some clients like to shop and have an unbiased expert find them the most suitable financing for their needs selecting from a variety of sources including private sources. Banks can only sell you the products they have. However, having said that, often, rather than lose your business the bank may be willing to offer you rates less than the posted rate. So don’t be afraid to ask. I mentioned in a previous blog the potential challenges for mortgage financing with Self Employed Buyers. This is an area where a Mortgage Broker can be resourceful.

Some buyers have reported that they have received a Pre Approval for mortgage financing beyond their comfort zone. There are buyers who are simply not comfortable “stretching” for home ownership. It is important to consider your comfort with risk and review your budget at this stage.
When budgeting, I mentioned in the past, to plan for unforeseen disruptions, such as accident, illness or loss of employment as well, as it is important to consider items such as closing costs (usually in the range of 1.5 -2% of the purchase price). Closing costs include land transfer tax, adjustments, legal fees, etc)
When using professionals, they are best able to advise you about some discounts that are available to those who are first time buyers when it comes to items such as land transfer taxes or rebates. Don’t forget condo fees in your planning or necessary repairs or improvements that may have come up on the house inspection before you purchased. If you have purchased a condominium, monthly fees are out of your control and so are special levies. Understanding and having full knowledge of the financial condition and status of the Condominium Corporation before you buy is critical. Special levies can be a huge drain on your savings and you must pay them or be in default of your mortgage. Also special levies do have a negative impact on value.
Don’t forget your moving expenses. These costs can be significant  and sometimes left out of the calculations when budgeting.
Utility costs are another consideration over and above your mortgage payments and with hydro costs rising this needs to be conservatively estimated. You want the heat and lights to stay on in your new home after all! Dinner by candlelight is only romantic once in awhile.

I have said knowledge is power. The more knowledge you have as a buyer the greater your confidence because you have increased your level of competency.

Surround yourself with experts. This is a big and life changing experience.

ExceptionalProperties.ca  is hosting a free seminar for Buyers, on April 8th with experts including lawyers, a mortgage broker, home inspector, realtors and storage specialists.
I would be delighted if you join us to learn more about buying real estate.

For more information please call 613 238 2801 and speak to Asha Panesar.