Buyer's help page by Campbell River Homes For Sale

Buyer's Help & Information

First Steps

You've Decided to Buy a Home in campbell river!

Buying a home is more than looking at houses. It's finding the right home, at the right price, in the right location. Hopefully, with a minimum amount of time and inconvenience. The best way to achieve these objectives is to work with a professional realtor who understands your needs and wants, your time frame and the financial boundaries to work within.

Selecting a Sales Associate

It is important that the salesperson understands your needs. A good salesperson will define your needs before they start to show you homes. Questions you should ask a salesperson when making your selection:

· Will you be representing my interests?

· Do you have access to M.L.S. information?

· Would you provide market evidence to support the price?

· Will you look after the details to closing and possession?

· Can you be contacted at any time?

A Sales Associate's Function

· Provide information on the property.

· Provide information on the area.

· Negotiate a price and terms, agreeable to buyer and seller.

· Assist in arranging a source of financing.

Working With a Sales Associate

Let the salesperson do the searching. The best buys are not in the newspaper ads. In fact, most opportunities are on "hot sheets" available every morning to salespeople with access to M.L.S. information. Once you connect with a salesperson they can do a more complete search for you. A salesperson will commit time to you if you will commit loyalty to them. If you play the field, you cannot expect undivided attention.

Buyer's Contribution

· Provide details of your property needs.

· Describe what would be a suitable location.

· Provide financial information.

· Communicate your likes and dislikes on each property.

· Commit to the salesperson.

· Respect and perform the terms of the purchase agreement.

Working together as a team, with a professional salesperson you respect, should achieve those objectives you seek - the right home for you.

Establishing a Market Value

Market value is based on what others have been prepared to pay for a similar property, under the same market conditions after reasonable marketing exposure. Market value is a fair price for both buyer and seller. It is what is called an "arms length" deal, and that means that there were no influences other than the market influencing the deal. You may of course pay more than established market value if your desire for the property warrants it. Conversely, you should not expect to pay less than established market value unless the property is being sold under duress.

Qualifying For Your Mortgage

Once you've made up your mind to buy a home, the first question that comes to mind is, "How much can I afford?" The financial aspects of buying a home do not need to be confusing. Your Royal LePage salesperson can arrange to have you pre-qualified for a loan before you start shopping. Most lending institutions will only allow approximately 30% of a person's income to support a mortgage. They will usually not allow more than approximately 40% of income to support a mortgage together with other debts. The amount of money you qualify for, plus the amount of cash you can put down, will equal the amount you can afford to spend on a home.

Negotiations

Major Elements of an Offer

· Price
Depending on the local market conditions, your opinion of value and market information provided by your Royal LePage Real Estate Professional, the price you offer may be different from the seller's asking price.

· Deposit
The deposit shows your good faith and will be applied against the purchase of the home when the sale closes. Your Royal LePage Real Estate Professional can advise you on an appropriate amount.

· Terms
Includes the total price offered and the financing details. You may arrange your own financing or ask to assume the seller's mortgage, especially if it has an attractive interest rate.

· Conditions
These might include "subject to home inspection", "subject to you obtaining financing", or "subject to you selling your property".

· Inclusions and Exclusions
These might include appliances and certain fixtures or decorative items, such as window coverings or mirrors.

· Closing or Possession Date
Generally, the day the title of the property is legally transferred and the transaction of funds finalized unless otherwise specified (except in Manitoba and Quebec). Note: In British Columbia the Possession Date is legally 1 to 3 days after closing.

How to make and Offer

When it comes time to make an offer, your Royal LePage Real Estate Professional can provide current market information and will assist you in drafting your offer.

Your Royal LePage Real Estate Professional will communicate the offer, sometimes known as an Offer to Purchase* to the seller, or the seller's representative, on your behalf. Sometimes there may be more than one offer on a property coming in at the same time. Your Royal LePage Real Estate Professional can guide you through this process.

*Offer to Purchase: a legal document which specified the terms and conditions of your offer to purchase the home.

The Offer Can Be Firm Or Conditional.

Firm Offer to Purchase: usually preferable to the seller, because it means that you are prepared to purchase the home without any conditions. If the offer is accepted, the home is yours.

Conditional Offer to Purchase: means that you have placed one or more conditions on the purchase, such as "subject to home inspection", "subject to financing" or "subject to sale of buyer's existing home". The home is not sold until all the conditions have been met.

Acceptance of the Offer

Your Offer to Purchase will be presented as soon as possible. The seller may accept the offer, reject it, or submit a counter-offer. The counter-offer may be in reference to the price, the closing date, or any number of variables. The offers can go back and forth until both parties have agreed or one of you ends the negotiations

Final Steps

Have the home Inspected (Optional)

Buying a home is one of the most important investment decisions you will make in your lifetime. As such, it makes sound financial sense to enlist the services of a qualified home inspection company to ensure your home is as solid and secure on the inside as it is on the outside.

A home inspection will determine the structural and mechanical soundness of your home. Your home inspector will identify existing and potential problem areas, suggest practical low-cost solutions, and provide estimates regarding costs for any work required. Shortly after the inspection has taken place, a report summarizing the findings is generally provided to the potential purchaser.

By commissioning a home inspection prior to purchase, you're protecting both yourself and your investment, as well as buying a little peace-of-mind.

Home inspection costs often range according to size, age, and location of the home. Your Royal LePage sales representative can recommend a reputable home inspection service or arrange for a home inspector to visit your property.

OBTAIN A PRE-APPROVED MORTGAGE

Having a pre-approved mortgage will give you the confidence of knowing exactly what you can spend on a home before you start looking. You will also be protected against interest rate increases while you look for your new home.

Your Mortgage Specialist will answer your questions and help you determine which financing terms and options are right for you. Your Mortgage Specialist and Real Estate Professional work as a team to help you find the right home and select the best financing.

Finalizing Your Mortgage

Once you've found the home you want to purchase, there are some documents you'll probably be asked for in order to finalize your financing. They will include:

· A copy of the real estate listing of the property. If the home is still to be built, the mortgage lender will need to see the architect's or builder's plans and details on lot size and location.

· A copy of the offer to purchase or the building contract, if this document has been prepared.

· Documents to confirm employment, income and source of pre-approval.

If you have a pre-approved mortgage, it's a simple matter of finalizing a few details which your Mortgage Specialist will explain to you.

In addition to the actual purchase price, there are a number of other expenses that you might be expected to pay for. These are listed below:

EXPENSE	PAID
Mortgage Application and Appraisal Fee	At time of application
Appraisal Fee	At inspection
Property Inspection (optional)	Closing
Legal Fees	Closing
Legal Disbursements	Closing
Deed and/or mortgage registration	Closing
Property Survey (sometimes provided by seller)	Closing
Land Transfer, Deed Tax or Property Purchase Tax (in Quebec within 3 months following signing)	Closing
Mortgage Interest Adjustment and Take Over Fee (if applicable)	Closing
Adjustments for Fuel, Taxes, etc.	Closing
Mortgage Insurance (and application fee if applicable)	Closing
Home and Property Insurance	Closing and on-going
Connection charges for utilities such as gas, water and electricity	Date of move
Moving Expenses	Date of move

Other costs may include landscaping, redecorating, furnishings, appliances and repairs.

Typical monthly costs incurred with home ownership are mortgage payments, maintenance, insurance, condo fees, property taxes and utilities.

Understanding Market Conditions

The real estate market is always changing. It helps to understand how market conditions can affect your position as a buyer.

Your Royal LePage Real Estate Professional can provide you with current real estate market conditions and explain their impact.

Market Conditions	Characteristics	Implications
Buyer's Market: The supply of homes on the market exceeds demand.	High inventory of homes. Few buyers compared to availability. Homes on the market longer. Prices tend to drop.	More time to look for a home. More negotiating leverage.
Seller's Market: The number of buyers wanting homes exceeds the supply or number of homes on the market.	Smaller inventory of homes. Many buyers. Homes sell quickly. Prices usually increase.	May have to pay more. Make decisions quickly. Conditional offers may be rejected.
Balanced Market: The number of homes on the market is equal to the demand or number of buyers.	Demand equals supply. Sellers accept reasonable offers. Homes sell within an acceptable time period. Prices generally stable.	More relaxed atmosphere. Reasonable number of homes to choose from.

Glossary of Terms

AMORTIZATION PERIOD

The actual number of years it will take to pay back your mortgage loan.

APPRAISED VALUE

An estimate of the value of the property. Conducted for the purpose of mortgage lending by a certified appraiser. This appraisal is not to be confused with a building inspection.

ASSUMABILITY

Allows the buyer to take over the seller's mortgage on the property.

CLOSED MORTGAGE

A mortgage that locks you into a specific payment schedule. A penalty usually applies if you repay the loan in full before the end of a closed term.

CONDOMINIUM FEE

A common payment among owners which is allocated to pay expenses.

CONVENTIONAL MORTGAGE

A mortgage loan issued for up to 75% of the property's appraised value or purchase price, whichever is less.

DOWN PAYMENT

The buyer's cash payment toward the property. The difference between the purchase price and the amount of the mortgage loan.

EQUITY

The difference between the home's selling value and the debts against it.

HIGH-RATIO MORTGAGE

A mortgage that exceeds 75% of the home's appraised value. These mortgages must be insured for payment.

INTEREST RATE

The value charged by the lender for the use of the lender's money. Expressed as a percentage.

LAND TRANSFER TAX, DEED TAX OR PROPERTY PURCHASE TAX

A fee paid to the municipal and/or provincial government for the transferring of property from seller to buyer.

MATURITY DATE

The end of the term, at which time you can pay off the mortgage or renew it.

MORTGAGEE

The person or the financial institution that lends the money.

MORTGAGE INSURANCE

Applies to high-ratio mortgages. It protects the lender against loss if the borrower is unable to repay the mortgage.

MORTGAGE LIFE INSURANCE

Pays off the mortgage if the borrower dies.

MORTGAGOR

The borrower.

OPEN MORTGAGE

Allows partial or full payment of the principal at any time, without penalty.

PORTABILITY

A mortgage option that enables borrowers to take their current mortgage with them to another property, without penalty.

PRE-APPROVED MORTGAGE

Qualifies you for a mortgage before you start shopping. You know exactly how much you can spend and are free to make a "firm" offer when you find the right home.

PREPAYMENT PRIVILEGES

Voluntary payments in addition to regular mortgage payments.

PRINCIPAL

The amount borrowed or still owing on a mortgage loan. Interest is paid on the principal amount.

REFINANCING

Paying off the existing mortgage and arranging a new one or re-negotiating the terms and conditions of an existing mortgage.

RENEWAL

Re-negotiation of a mortgage loan at the end of a term for a new term.

SECOND MORTGAGE

Additional financing. Usually has a shorter term and higher interest rate than the first mortgage.

TERM

The length of time the interest rate is fixed. It also indicates when the principal balance becomes due and payable to the lender.

TITLE

Legal ownership in a property.

VARIABLE-RATE MORTGAGE

A mortgage with fixed payments, but fluctuates with interest rates. The changing interest rate determines how much of the payment goes towards the principal.

VENDOR TAKE-BACK MORTGAGE

When the seller provides some or all of the mortgage financing in order to sell their property.

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