With all indicators being that that the Sunshine Coast real estate market will be moving to more balanced conditions over the next 12 months, many first-time home buyers are busy saving their down payments in the hopes of getting into the market.
The first step in buying your first home is to get pre-approved for a mortgage. Knowing what you can spend gives you more negotiating power when writing an offer and allows you to know you are shopping in the correct price range.
You still need a “subject to finance” condition on an offer because the lender will need to verify the value of the property you want to buy, with an appraisal, but it does speed the process up and allow you to have a shorter time on the finance subject.
Shorter subject time is always more appealing to sellers as it is less time their property is tied up, in the event the offer doesn’t complete.
The best way to get preapproved in my opinion is to go to your bank/financial institution and also contact a mortgage broker.
The next step in buying a home is to start interviewing buyer’s agents. First time buyers commonly have the misconception that approaching listing agents directly will save them money on purchasing their first home.
This is not the case however as the listing agent is under contract with the person selling the home and has to disclose everything any buyers tell them. For example, if you mention to the seller’s agent what amount you are pre-approved for, the seller will know that and it could impact the final price you pay.
Another misconception is that there will be reduced commission paid if a buyer uses a sellers agent instead of their own. Again, this is not the case as the agent selling the house is paid by the seller and then pays the buyer’s agent. If there is no buyer’s agent, the listing agent simply keeps that additional commission.
I recommend interviewing three buyer’s agents and picking the one you feel is the best fit for you.
Five good questions to ask a buyer agent are:
1. Are you full time or part time?
2. What is your experience in the area I want to purchase?
3. How many homes did you sell as a buyer’s agent last year?
4. (On average) how many buyers do you work with at any one time?
5. How long have you been a licenced realtor?
Once you have your pre-approval in place and a realtor working for you, you are ready to start looking at homes.
I will go into more detail on this stage of the process in next week’s article.
Tony Browton is an award-winning Realtor who lives and works on BC’s Sunshine Coast.
His weekly blog can be found here http://www.truebluerealty.ca/blog