Informed BUYERS Guide Everything you need to know to make buying your new home fun and problem free. ALEXANDRA GRANT REALTOR®
alexandra@agrealestategroup.ca (613) 888-8365
Toronto-based, but living and working locally.
Tamworth
Stirling
Roblin Frankford Wooler
Tyendinaga
Napanee
Camden East Newburgh
Bath
Belleville
Trenton Prince Edward County Consecon Wellington
Picton Bloomfield
Serving Prince Edward County, Belleville, Napanee and surrounding areas.
Table Of Contents On Your Way To Home Ownership ...................................................................................... 2 Is Home Ownership Right For You? ....................................................................................... 2 Are You Financially Ready To Own A Home? ......................................................................... 3 Introduction To The Process .................................................................................................. 3 7 Reasons You Should Use A Local REALTOR® ................................................................... 4 - 5 Buyers Agent Vs Listing Agent Understanding Agent Relationships ................................................ 6 Frequently Asked Questions ................................................................................................. 7 Ready to find an agent? ................................................................................................ 8 - 9 Buyer’s Representation Agreement ....................................................................................... 10 So “Why” Do You Need The AG Real Estate Group Team ...................................................... 11 Why should you choose the AG Real Estate team? ................................................................ 12 Early in the Process .......................................................................................................... 13 Introducing Alexandra: Your Local Real Estate Expert .............................................................. 14 The AG Real Estate Group Home-Buyer Services ................................................................... 15 Choose Wisely, Choose RE/MAX® .................................................................................... 16 Deciding On What And Where To Buy ............................................................................... 17 Be Informed .................................................................................................................... 18 Understanding Market Conditions ....................................................................................... 19 You have found the ONE! Amazing! What Happens Next? .................................................... 20 Making It Yours- Understanding The Paperwork .............................................................. 21 - 22 Negotiations .................................................................................................................. 23 Legal ............................................................................................................................. 24 Conditions, Home Inspections And Waivers ......................................................................... 24 Buying Concerns ............................................................................................................. 25 Completing the Sale ................................................................................................. 26 - 27 Closing Cost of a Transaction ............................................................................................ 27 Preparing to Move ........................................................................................................... 28 Closing Day ................................................................................................................... 29 Move In ......................................................................................................................... 29 Informed BUYERS Guide • 2023
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On Your Way To Home Ownership Homeownership is a great goal for anyone who wants to own their own property. Whether you’re looking to buy a house, condo, townhouse, or even a single-family home, homeownership is something that everyone should strive for. Owning a home gives you the opportunity to build equity, save money, and live comfortably. There are many different types of homes out there, and each type offers its own set of advantages and disadvantages.
Is Home Ownership Right For You? Buying a home is one of the biggest decisions you will ever make. To ensure that you make the best choice, ask yourself a few questions.... What do you want in a home? What is your current financial situation? What are your financial and lifestyle needs?
UPFRONT COSTS
ONGOING COSTS
MAJOR REPAIRS
The initial amount of money you need to buy a home, including the down payment, closing costs and any applicable taxes.
The continued cost of living in a home you own, including mortgage payments, property taxes, insurance, utilities, routine repairs and maintenance (if applicable condo fees).
Your home will eventually need large and expensive repairs and renovations such as roof replacement or foundation repair.
Are you ready to own a home? Buying a home is not for everyone. Before you make any decisions consider the following... Am I financially stable? Do I have the financial management skills and discipline to handle this large purchase? Am I ready and able to take responsibility for all the costs that come with being a homeowner? Can I devote the time to regular home maintenance? 2
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Are You Financially Ready To Own A Home? Have you secured a pre-approval from a Mortgage or lending company? If you have answered yes to this question then this guide is for you.
6 STEPS TO FINDING YOUR PERFECT HOME Choosing The Right Real Estate Agent
The Buying Process
Deciding Where And What To Buy
Preparing To Move
Becoming An Educated Buyer
Move In! Congratulations You’re A Homeowner!
INTRODUCTION TO THE PROCESS
1. Choose Your Team Of Professionals Buying a home is a collaborative effort. Each member of your team plays an important role. Lender, Lawyer, REALTOR® they all need to work together to help you achieve your goal. Choosing the right advisor to guide you through a transaction is a critically important decision. In a complex and fast paced market, having the right representation is paramount. 2. Advice For Home Buyers Lessons learned from decades of experience. 3. Know Your Property Types Every neighbourhood in the city offers a variety of housing styles. One needs to understand the advantages and limitations of each.
6. Make An Offer When you find a home you absolutely love, it’s important that you are in a position to act quickly. 7. Multiple Offers Understand the nuances of bidding war negotiations. 8. Preemptive Bids (Bully Offers) Untangling the bully offer conundrum. 9. Understand The Role Of Your Lawyer Your lawyer will protect your rights and ensure you actually get what you’re paying for. 10. Get Insurance Seek quotations from relevant insurance experts for each type of insurance you require.
4. Finding Your Home Make a wish list, look at everything, keep track of 11. Complete The Transaction what you see, and be sure to give your REALTOR® Your AG Real Estate Group REALTOR® will make sure honest feedback. everything is in place for a smooth and efficient closing. 5. Understanding The Market Your AG Real Estate Group REALTOR® will navigate the way. Informed BUYERS Guide • 2023
12. Move Ahead As you’re settling into your new home, we will still be there for you. REAL ESTATE GROUP
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7 Reasons You Should Use A Local REALTOR® 1. They live in the Community A local REALTOR® is more than just the person who helps you find the right home. They live, work, and play in the same community you are looking at. They can show you market statistics, the best schools, restaurants, local attractions, and reputable contractors, and they make it easy for you to transition to living in your new community.
2. They know the local area and it’s laws Buying a home is a complex process. Your local REALTOR® keeps you informed about local laws, municipal services, wells and septics, and other things that are common in rural homes. They can also help you make sense of city development projects, zoning and bylaws, and the many bureaucratic processes. Their locally-focused knowledge is exactly what you need to simplify the home buying process.
3. They are your Personal Confidant when buying a home Your local REALTOR® can help you with whatever you need when it comes to buying your home. They do a lot more than just structure sales agreements. If you need advice, have questions about the market, or just want an honest opinion about the houses you’ve checked out, they will give it to you because your success is their success.
4. They network with local businesses and entrepreneurs Every community is defined by the local businesses, entrepreneurs, and those who make it a better place to live. A local REALTOR® works within their community and can help you find reputable mortgage brokers, lawyers, contractors, home inspectors, and other services that you’ll need when buying, selling, and maintaining your property.
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7 Reasons You Should Use A Local REALTOR® 5. They know where to find the home you’re looking for Buying a home is a challenging process. Your dream home is unique and a local REALTOR® uses their expertise to find the right design styles, searches the local community for your ideal home, finds you the best prices possible and relevant comparables, and is focused on getting you the best return possible. Your time is valuable and a local REALTOR® understands this. That’s why they use their local knowledge to find you a home that meets all of your requirements.
6. They protect your interests Buying or selling a property isn’t an easy process. There are many steps that need to be considered. A local REALTOR® cares about you and will protect your interests throughout the entire process. They will keep you on track, remind you of important dates and deadlines, and support you through one of the biggest purchases in your life.
7. They give back to the local community Real estate professionals understand the importance of community. A local REALTOR® lives and works in the community you are looking at purchasing a home in. They often support local charities, groups and organizations, and other positive initiatives that are designed to make your community a better place to live.
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Buyers Agent Vs Listing Agent Understanding Agent Relationships The REALTOR® works for me, right!? Our REALTOR® will work on your behalf to find you a house and will negotiate for it on the best terms possible for you if you retain the REALTOR® by signing a Buyers Representative Agreement. It is important to understand whose interests REALTORS are legally bound to serve in a real estate transaction.
REASONS WHY YOU NEED A REASONS WHY YOU NEED A
LISTING AGENT BUYERS AGENT
The listing agent is under contract with the seller to market and sell their property for the best possible price. Working with a listing agent means that they can:
• arrange a showing of the property • assist with financing the property • provide details about the property • explain all the forms and agreements related to buying the property.
As your personal REALTOR®, AG’s job would be to ensure you are an educated buyer in all aspects of your home buying process. 6
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When you engage the services of your own personal agent-someone who is under contract to work solely in your best interest-you get all of the same services listed above plus your personal REALTOR® provides:
• confidential assistance that addresses your needs first • honest, loyal and diligent care, free from any conflicts of interest • access to all listings including MLS bank-owned properties, distress and estate sales and homes that were on the market where the seller might still be interested in selling • expert advice on useful clauses such as home inspections and financing to protect you fully • expert advice on market value, inclusions, locations, as well as help when you need to decide when you should walk away • discovery and disclosure of all information about the property including liens, warranties, disclosures, seller’s purchase price and market and planning activity in the area.
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Visit www.agrealestategroup.ca View our blogs and vlogs to learn more. Many Buyers do not fully understand the home buying process and what role a REALTOR® plays. The following are some of the most frequently asked questions that Buyers ask or don’t fully understand.
Can my REALTOR® give me information What does it cost as a buyer to regarding properties from other use a REALTOR®? companies? The compensation that a REALTOR® receives typically Yes, if that other company is a member of Multiple Listing Service® (MLS®)—which most real estate companies are. For Sale By Owner (FSBO) properties are not listed in MLS so a REALTOR® likely would not be able to provide information regarding them. However, with a Buyer Representation Agreement, your REALTOR® may be able to help you purchase a FSBO.
What type of information will my REALTOR® need from me?
comes from the Seller’s proceeds. In other words, there is no cost for a buyer to use a REALTOR® in a traditional REALTOR®/Buyer relationship. In a Buyer agency agreement, there may be some cost to the Buyer, but even these agreements are usually worded so that the REALTOR® is compensated from the Seller.
How can i find out about new properties?
Your REALTOR® should be able to accommodate your A REALTOR will need any type of information regarding particular situation whether it be via email, phone the property you are looking for that is important to calls, etc. Clients with email capability can receive you. For example, number of bedrooms, garage automatic updates from the MLS system as soon as size, price, location and number of bathrooms are new listings are entered. common criteria. Other considerations include the school district, type of home (detached, townhouse, What if i am unhappy and want to etc.) and room sizes. Keep in mind that a search switich realtors? that is too specific may narrow your list of properties Let the first REALTOR® know that you are unhappy and too much while one that is too broad may give you the reasons why. See if you can work out the issues more properties to look at than you have time to go with them. through! ®
What if i find a property on my own?
SUMMARY
When purchasing real estate, a REALTOR® can be You should contact your REALTOR and not the property an invaluable resource if you remember your owner or the REALTOR® listing the property. Having responsibilities: the address or the MLS number is very helpful and will 1. Work with just one REALTOR® assist your REALTOR® in gathering information regarding 2. Make sure you tell your REALTOR® everything the property. 3. Always tell other Realtors you are already working with a REALTOR® Can I go to an open house without my 4. Have a Buyer Representation Agreement signed ®
REALTOR®?
You can go to open houses without your REALTOR®. However, you must inform the attending REALTOR® that you already have your own REALTOR® working for you. Informed BUYERS Guide • 2023
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Ready to find an agent? Finding a great real estate agent to help you buy a home won’t take you too much time if you know where (and how) to look.
Start by asking friends, families, coworkers, and anyone else whose opinion you trust on the matter if they have any local agent referrals. Previous buyers are one of your best assets for finding an agent, since they can speak honestly about their own experiences. Plus, you can trust that if someone you know is giving you a recommendation, chances are it’s because they enjoyed working with that agent and would work with them again. If you don’t have anybody who you can ask for a referral, head to the internet. Use an online REALTOR® search to browse agents in your area, then pull out a few names of agents you’re interested in working with and do a bit more research. Look to their reviews and their portfolio for information that can help guide your decision. Be sure to consider whether you have any unique needs that you’d like to find an agent with experience in, for example if you’re looking to do a military relocation or if you need a short term rental during the buying process. And just like when it comes to hiring a moving company or renting a storage unit, don’t stop your search at just one name. Find at least three different real estate agents who you think might be up to the task of helping you buy a home, and briefly interview each of them to see if they check off the traits listed in the previous section. Don’t be afraid of coming off as overly picky—this is a huge investment you’re making and you need to be sure you find someone who can make it as painless as possible.
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What about buying a home without an agent? If reading all of this has made you feel like perhaps you could just go about the home purchasing process on your own, it’s worth taking a look at some of the reasons that buying without an agent isn’t such a great idea. 1. A good agent brings a lot to the table that you 3. Ultimately, you only work with one REALTOR® so it won’t find anywhere else, and can be instrumental should be someone you like and respect and who in getting you the right deal on the right house. feels the same way about you. The search for that perfect agent might take some time, but it will almost always pay off in dividends 4. You must have complete trust in your REALTOR® later on. of choice. In a complex and fast paced market, having the right representation is paramount. 2. Remember: there are a lot of real estate agents out there. And each of them has their own skills, specialties, and strengths. Give yourself plenty of time to choose a real estate agent who can benefit your buying process and who you will actually enjoy working with. The rest will fall into place. Informed BUYERS Guide • 2023
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Buyer’s Representation Agreement A buyer representation agreement (BRA) is a contract that binds you to work exclusively with one real estate brokerage for an agreed-upon period of time when you’re in the market to buy a home. You don’t have to sign a BRA, and if you do, you’re under no obligation to actually purchase a home during the term of the agreement. A buyer representation agreement (BRA) is a contract that binds you to work exclusively with one real estate brokerage for an agreed-upon period of time when you’re in the market to buy a home. You don’t have to sign a BRA, and if you do, you’re under no obligation to actually purchase a home during the term of the agreement. A BRA outlines the property types and geographic areas for your potential new home, lists the services that will be provided by the brokerage, determines the commission that will be paid to the brokerage, and sets a time commitment. Signing a BRA is a commitment that comes with rights and responsibilities, so think carefully about your needs. Suppose you sign a one-year BRA with a Toronto-based brokerage in order to purchase a condo, but you accept a job in North Bay soon afterwards. The BRA would remain in effect unless the Toronto brokerage allows you to terminate it. A BRA can be any length of time, but if it’s more than six months,you will be asked to initial the expiry date, in addition to your signature on the document. That’s to ensure that you understand the length of the
agreement. In addition, a holdover clause can bind you to the brokerage for a length of time even after the BRA formally expires. If you purchase a house that was shown to you by the brokerage when the BRA was in effect, you may still owe the brokerage a commission, depending on when you make the purchase. The term of the holdover clause must be clearly stated, and agreed upon by you and the brokerage. You can expect the BRA to include a commission clause. Though real estate brokerage commissions are often paid by the seller after a deal closes, if the BRA has a commission clause that states a minimum compensation (hypothetically: a certain percentage of the purchase price or a specific amount), and the seller pays your salesperson’s brokerage less than that amount, you may be required to pay the difference out of your own pocket. This is something you should understand and discuss with your brokerage to make sure it is clear what you will owe under different circumstances. Please note the Buyer’s Agent is normally paid a commission by the Seller of the property.
WHERE DO I GO FROM HERE? After reviewing and understanding the forms, it will be necessary for you to choose and authorize the appropriate representation. This should be done before you look at homes. Representation Agreements are now required by law in Ontario if you purchase a property through a registered REALTOR®. 10
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So “Why” Do You Need The AG Real Estate Group Team 1. The AG Real Estate team gives clients an experienced agent and a team of professionals working on their behalf without paying more in commission. The client gains collective knowledge and wisdom as team members often brainstorm offer strategies for clients. This means the benefit of combined expertise and years of experience in writing & negotiating contracts to keep you safe from litigation and dispute.
5. Finding the right property is just the beginning. We will be your neighbour. This means from start to finish of your search, till long after you have settled in, you will benefit from our knowledge and connections with local professionals. Our lenders, mortgage brokers, home inspectors, lawyers, movers, painters, handymen and home service professionals aren’t just best in class. We use our community ties to help you make connections to the area.
2. One of the biggest advantages of hiring the AG team to help you buy or sell is that you should be able to predict the kind of experience you’ll have, based on the experiences others have had with the team. We have consistent values, systems, processes and skills, and that means around the clock quick response times in communication so you never miss out on pertinent information. Consistent communication and updates.
6. We Care, not just about our clients but about our communities Our team consists of avid volunteers. Our Team leader Alexandra demonstrates this core value with her involvement with Rotary. Our team believes in volunteering time and money back to our local communities.
3. No BS, just truth and transparency The AG team wants our clients to find their dream home and for the process to be as simplified and stress free as possible. We know what’s happening in our market. We are not afraid to speak the truth even when it sucks. Is it a good time to buy? Is this a good neighbourhood? Is this area a good investment? We answer the hard questions even if you don’t really want to hear the answer because we want you to have a successful purchase and a long standing relationship with our team. We are in it for the long haul. 4. We understand the rural market. Not every REALTOR® has experience outside the town limits. As a team of professionals who have grown up in rural areas, lived in city centres and small towns we understand all the unique aspects of rural and agricultural purchases. This means years of experience in rural purchases with general knowledge of septic & well systems.
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Beyond our local community our team is a big supporter of Sick Kid’s Donation through RE/MAX®
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Why should you choose the AG Real Estate team? AG has made plenty of waves in the Prince Edward County, Napanee and Quinte market.
Helping 100’s of families buy and sell each year!
We are committed to bringing that knowledge and experience to the process of finding you a new home. That’s what you can expect when purchasing with AG. Whether you’re a first-time homebuyer, a seasoned investor, or someone in between, our customized buying process ensures all your specific needs are met. Everyone handles the buying process differently. And, we understand that.
We pride ourselves on our flexibility in remaining an objective third party. AG uses our hands-on experience to provide sound advice before, during, and after your purchase. 12
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Early in the Process
Early in the buying process, we host a Buyer Intake Session, where we address a number of important considerations. We want to get you thinking about the home buying process in a more structured and holistic way. One of the first thing we do is set up an introductory meeting to review your wish list, discuss market fundamentals and review the acquisition process so you’re set up for success from day one. It’s important to us that we do a lot of the heavy-lifting upfront so you’re empowered with knowledge and information from the get-go! For planning purposes, your onboarding session will be approximately 90 minutes in length and is definitely the best way to kick-off your search efforts! Knowing that, buying with AG means we are investing time and energy in this critical first step. We believe that the more knowledgeable a homebuyer is, the more comfortable, stress-free (and, fun) the home buying process will be!
AG takes the time to understand your individual level of experience with home buying and ownership.
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Introducing Alexandra: Your Local Real Estate Expert Alexandra has deep ties to the rural outskirts of Napanee, where she currently resides. Growing up in this serene environment, she has gained a profound understanding of rural living and cultivated strong connections within the local community. These connections extend not only to Napanee but also to Prince Edward County and the Quinte region. Alexandra’s achievements in the real estate industry have earned her numerous prestigious awards from RE/MAX®, establishing her as a respected leader in the field. Beyond her thriving real estate career, Alexandra cherishes her time spent with her family and two children. Her passions include gardening, golfing, and creating culinary delights in the kitchen. As a dedicated Rotarian, Alexandra is committed to supporting her communities and the businesses that sustain them. She actively contributes by hosting monthly draws to highlight and support local businesses. Additionally, a portion of every sale she completes goes toward supporting the Children’s Miracle Network. Alexandra prides herself on being open, honest, and transparent. If there’s anything you’d like to learn more about or discuss with her, rest assured she’ll provide you with the information you seek. Meet Alexandra – your trusted partner in real estate.
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The AG Real Estate Group Home-Buyer Services
We Work To Your Schedule
We send you morning updates
We know that between your work life and your social life, time can be hard to come by. Our team works hard to accommodate your schedule and make sure we’re there to help you when it’s most convenient for you.
Every morning we’ll provide you with an e-mail of new listings that meet your criteria that have come on the market. We do some pre-screening to gather whatever additional information we can get about the property (like if it backs onto a school) and provide that to you in our e-mail.
We Craft A Detailed Profile For You
We Send You Weekly Updates
We go through your needs and your wants to create the big-picture blueprint for your ideal home. This is a vital point in making sure we understand what you would like to get, what you can afford, and what communities provide the best options for you.
We Arrange the Financing
We’ll pair you with one of our trusted mortgage brokers or bank professional to get you pre-approved for a mortgage. We like to help you with getting your documents ready and staying in the loop, because this process can be a little nerve wracking. Remember. We’re there for you!
We Start Visiting Properties
Our next step is taking you out to view three properties that are inline with what you’re looking for. We’ll take detailed notes of what you like about it, what you don’t like, and if you think it is something you would consider purchasing. This step helps to make sure our profile is correct, and if it isn’t we will make minor changes prior to our next outing. Informed BUYERS Guide • 2023
We provide a weekly market update to let you know what is selling and what it sells for. This helps familiarize you with the pricing of a certain area and to understand how they compare to other similar homes that are listed or have just sold.
We Build A Detailed Pre-Offer Analysis
We don’t just throw an offer together on paper. Ever. Instead, when you’re serious about a property, we’ll do a detailed market analysis and compare the property to similar listings in the area. This is the best way to make sure you’re making the most informed purchasing decision. But wait. There’s more. You see, the most important aspect of all is that we would never recommend that you purchase a home for a price that we ourselves wouldn’t pay. Ever. Many real estate agents are seemingly out for the deal and are not necessarily concerned with whether or not you’ll be happy with your choice a year from now. We’re different. We need to truly feel that you’re making the best choice possible, and this is why our clients know they are in good hands when they chose to purchase their home with us; it’s part of what sets us apart. REAL ESTATE GROUP 15
Choose Wisely, Choose RE/MAX® RE/MAX®: the most widely recognized real estate brand in the world. For more than 20 years, RE/MAX® has been the leading real estate organization in Canada. When it comes to choosing a brand to help you sell your home, look no further than the RE/MAX® balloon. RE/MAX® is synonymous with professional.
Unrivalled Expertise Experienced and knowledgeable agents are the reason RE/MAX® is consistently ranked number one in several markets across Canada. RE/MAX® provides their agents with exclusive tools and training to ensure they have the skills needed to effectively guide you through your real estate process. A RE/MAX® agent is able to bring that knowledge plus a network of over 104,000 agents to help you gain the best outcome. This means 104,000 agents with home listings we can review and receive direct feedback on.
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Deciding On What And Where To Buy Choosing to buy a home is an exciting time and our hope is that this guide will bring clarity and peace of mind during your home buying journey.
Pride of home ownership is one of the greatest joys and biggest accomplishments but it is also one of life’s largest decisions. You possibly have already been thinking of what type of home to buy. As part of the preparation for a preapproval we always suggest looking at “your must have” and “wants” and “would be nice to have” to help determine the type of budget you are trying to receive pre-approval for. If you have not done so already we suggest to take a moment to compile a list. What type of home you are looking for and what features you are looking for will impact the area you will inevitably be looking in. There will be trade-offs along the way but the AG Real Estate team will be here to help sort through the options to find you the best home, at the best price with as many as your wants and wishes as possible. Ask yourself the following questions: What size of a yard is important to you? Is the front yard important or just the size of the backyard? Is a side yard okay?
How many bedrooms, bathrooms do you need?
What landscaping features are important? Pool, fenced yard, play areas, garden, waterfront? Is it important what direction the house faces?
What are your high priority features? High speed internet? Ensuite? Fireplace?
Are they limitations or mobility considerations? Are stairs an issue for parents, pets or maybe you in the future? What type of home will you consider? Single family, semi-detached, condo?
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Do you need a designated office?
What about storage options? Do you need a garage? How many parking spaces are required?
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Be Informed After our initial fact gathering meeting, which will consist of discussing a BRA, and intake form, a detailed list of your wants and wishes, as well as a discussion as to location, we will enter all the data into our database and a variety of property search programs. The information is shared with our team, other agents and potential sellers to begin the property match process. We won’t bombard you with emails of information that is not relevant to you.
You will receive daily emails on properties that are new to the market or have had a recent price change which match a broad scope of what you are looking for. As market area specialists with our pulse on what is happening in our market and in real estate on a national scale we will update you and keep you informed about any changes that may affect your search. This includes updates on market trends, mortgage rates and pricing trends. If you have a question you can reach out to one of the team members of your main representative and we will find the answer or refer you to an expert in the field in question.
Market Report $395,000 AVG SALE PRICE
HIGHEST SALES MONTH
HOMES PRICES 2020 vs
Monthly market reports, newsletters THIS MEANS FOR BUYERS and more to keepWHAT interest rates. petition is fierce because of you informed Com with your in e com approved and Get pre-
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highest and best offer.
INTEREST RATE
33
20%
20 HOMES LISTED
4.81%
MAY $818,076
2021
AVG DAYS ON MKT
SELLERS WHAT THIS MEANS FOR equity you have the in on Now is a great time to cash e growth. valu ive ress agg ugh thro gained ng. selli Maybe consider
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Understanding Market Conditions Depending on the time of year, what the economy is doing, interest rates and attractions to the area there can be different types of markets which you can experience even at different times of the year.
Balanced Market The number of homes is equal to the number of buyers. What does this mean for you as a Seller? You may not sell right away but still within a reasonable amount of time. Typically, not exceeding 6 months. The buyers will tend to be a little bit pickier about the general condition of the home and have more bargaining power.
Buyer’s Market A buyer’s market occurs when the supply of homes on the market exceeds the demand. This can typically happen in a recession or when the area is not highly desired etc. What does this mean for you as a Seller? Your home could be sitting on the market for more than 6 months and the value isn’t as strong. Buyer’s will have more bargaining power. You will need to do something to your home to make it more attractive than the others.
Seller’s Market The number of buyers wanting to purchase homes exceeds the supply of available homes on the market. What does this mean for you as a Seller? Your home will typically sell for more money, bidding wars are more likely, fast turnaround time from list to sale, and Buyer’s cannot be as picky about the condition of your home and have little to no bargaining power.
Now let the search begin! Remember… 1. Drive by homes you are interested in and get a first impression of the area 2. Make sure you are choosing different styles and types of homes that meet your needs so we can effectively begin to take your wish and want list and mine it down to your Dream home check list. 3. Select a maximum of 5 homes to visit in one day 4. Ensure you have set aside enough time after the showings to sit down and discuss the homes with your agent. The ongoing communication and educational information you receive from our team will ensure you feel you are making an informed decision. This will empower you to be confident to begin the push for the best possible deal on the home you desire. Informed BUYERS Guide • 2023
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You have found the ONE! Amazing! What Happens Next? Now that you have found a home you like we will start the process of considering whether to move to the next step of submitting an offer.
1. The AG team will conduct a details Comprehensive Market Analysis (CMA) complete with comparable active and expired listings, recent sold and historical data relevant to determining the market value of the home in question. 2. Using the data and information we will help you to determine if this is a property an offer should be submitted for. 3. After a detailed discussion of any concerns, and the asking price compared to market price, we will discuss the submission of an offer. 4. Should you choose to move forward we will prepare an offer that protects you, follows your instructions and matches your schedule and meets your needs. 5. We will explain the details of the offer, the terms, suggest options for additional or specialty clauses ensuring you know exactly what you are agreeing to. 6. Our goal is to ensure you feel comfortable and confident in your understanding before any paperwork is signed or submitted. 7. Once the offer work is completed and you are sure of your options and offer, we will present and negotiate on your behalf. The goal will be to get you the home you want at the price you are comfortable with. At this point • the seller may accept your offer – Woohoo • the seller may reject your offer (not common but can happen-we would try to discover why) • the seller may counter- they would submit back with adjusted terms which could be anything from the timeframe, the offer price, to the chattels requested.
*Our negotiations would continue until we reach an agreed upon offer between yourself and the sellers, or until we know an agreement cannot be reached and it is time to walk away.
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Informed BUYERS Guide • 2023
Making It Yours- Understanding The Paperwork Making the Offer There’s one thing every homebuyer has in common, regardless of the town or city they are buying in, the market conditions or the type of property – you have to make an offer. The Paperwork When you’re ready to make on offer on a house, your AG team member will draw up the necessary paperwork. In order to be valid, your offer documents much include some specific details, according to Canada Mortgage and Housing Corp.: The components of an offer: • your legal name, the name of the seller and the address of the property • the amount you’re offering to pay (the purchase price) and the amount of your deposit • inclusions and exclusions (for example, are the window coverings included in the purchase?) • the date you want to take possession (“closing day”) • a request for a current land survey • the date the offer expires • any other conditions that must be met before the contract is finalized (for example, a satisfactory home inspection) The Price - When making an offer on a house, be prepared to negotiate. Your negotiating power will depend on a few factors. The current market conditions in the immediate neighbourhood will dictate whether you can make a lowball offer – a likely scenario in a buyer’s market – or perhaps an offer that’s higher than the asking price, which can happen in a seller’s market. The demand for homes in the area, amount of housing inventory and the number of days on market will impact the type of market you’re in. Deposit - While the terms “deposit” and “down payment” are often used interchangeably, they are different. At the time of the offer, you should be prepared to make a deposit on the home you hope to buy. The deposit will be rolled in with your down payment, and shows the seller that you’re serious about buying the home and have your finances in order. If you walk away from the deal, after an agreement to purchase has been complete, in most cases you will forfeit your deposit. There’s no standard deposit amount. It will vary based on the type of property and how badly you want this particular home. Minimum amounts are usually laid out in the offer procedure. The way the deposit is handled varies, but it’s generally given to the seller’s agent, to be held in trust until the deal is firm. Down Payment - Unless you’re planning to pay cash for the house, you’ll need to secure financing. The minimum down payment in Canada is five per cent. Firm Versus Conditional Offer - Your offer to purchase a home can be firm, meaning it has no conditions attached to it. On the other hand, a conditional offer means that in order for the offer to be valid, certain terms must be met. Informed BUYERS Guide • 2023
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Some common conditions include: Purchase conditional on financing: This is a common condition for first-time homebuyers making an offer on a house, and it requires the sign-off of the mortgage lender in order for the deal to go through. The buyer will have a few days to get this, and the process will include a home appraisal. If the lender does not agree to finance the property, the buyer will notify the seller and the offer becomes null and void. Purchase conditional on home inspection: A home is likely the biggest purchase you’ll make in your lifetime, so it’s always recommended that the offer be conditional on a satisfactory home inspection. A professional home inspector will look at things in and around the home that are openly visible (that’s right, he or she will not be opening up walls or floors). The inspector will examine things like the structure, roof, plumbing, heating and electrical systems, to ensure the house is in good condition. If the home isn’t up to par, this condition allows the buyer to return to the seller and request repairs, a reduction in the price, or can rescind the offer entirely. Purchase conditional on the sale of a home: If a prospective homebuyer already owns a home, he or she may want to ensure that it is sold before agreeing to purchase a new property. This isn’t ideal for the seller, as every condition has a potential domino effect. A firm offer is common in a hot market. With all other things being equal, a seller is more likely to accept the unconditional offer over one that could potentially fall through for a number of reasons. Irrevocable Date - For the offer to be valid, it must contain a number of specific dates and times. Your initial offer will be valid for a specific period of time, usually same day to 24 hrs, after which the offer is deemed to be void. This time frame is called the irrevocable period. These can be set by the Buyer & Seller. They are implemented to help keep structure and timelines for the negotiation period. Completion Date - This is the date set for the transfer of ownership of the property negotiated between you and the Seller and can also be referred to as the closing date. Requisition Date - This is the period in which your lawyer must determine if there are any problems with the title of the property and is usually set 7-15 days prior to the completion date. Inclusions & Exclusions - This where you list any appliances or “Chattels” that you would like to leave with the home. Exclusions are items you do not want left with the home. Be sure to ask your REALTOR® the difference between a chattel and a fixture. . Final Walk Through - This is when the Buyers are allowed to come back to see the home. Typically, they will conduct 2. One for showing family members the home and to take measurements for ordering furniture etc. The 2nd is a couple days or the morning of closing to make sure the home has been left in the state they purchased it in and all inclusions as listed in the agreement are still there. If not the Buyer could ask their lawyer to conduct a hold back of funds. Closing & Possession Date - Generally this is the day the title of the property is legally transferred to the new owners. As soon as this is completed at the lawyer’s office you will need to make sure you have vacated the property. Negotiations - There could be room to negotiate a lower price on the property that you’re eyeing, but remember that negotiating doesn’t stop at price. You can also try for more favourable terms as part of your purchase agreement, such as repairs, inclusions, and a longer or shorter closing date. 22
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Negotiations There could be room to negotiate a lower price on the property that you’re eyeing, but remember that negotiating doesn’t stop at price. You can also try for more favourable terms as part of your purchase agreement, such as repairs, inclusions, and a longer or shorter closing date.
An experienced real estate agent will be able to advise you on what you can realistically negotiate, depending on the market conditions. In a buyer’s market, you hold the cards knowing that there are plenty of other options on the market. In a seller’s market, you’re in competition with other buyers vying for the same property, so quick action and a strong offer are more likely to work in your favour. Negotiating Facts and Questions 1. How long with the negotiations take? This is perhaps the most shocking of things for many buyers… commonly negotiations can wrap up within 24-48 hours. In other words, if we were to write and offer at 4pm, it would not be unusual to receive a response (typically a counter offer) later that evening or early the next morning. If you didn’t get to an accepted offer by then it would not be unusual to have one by noon or in the evening.
4. What if there are other offers? When an offer is received the listing agent has a duty to have the offer presented “without delay” furthermore, offers have an expiry clause-meaning that if the seller does not response before a certain time, the offer ceases to exist. Despite this there are occasions like over the last few years where multiple offers occur. We will talk through these types of situations and strategies when we consider placing an offer. The basics are that in a multi offer situation you usually want to start with your best offer, often you have one chance. In other words it is rare to receive a counter offer in these situations.
2. If the seller accepts my first offer, am I forced to buy? Unless the offer is being written without any subjects (which is very rare, and would require 5. With multi offer situations will we know what they in-depth conversation before submission) you will are offering? The terms of an offer are almost have a period of time, usually 7-10 days to inalways confidential until subjects are removed. vestigate whether or not the home is acceptable The seller will typically not disclose the price to you. If you find something you don’t like about they have accepted in case it jeopardizes future the home during this period you are able to walk negotiations should the offer collapse. away and the contract will collapse. 6. How many counter offers can we make? As many 3. How low should we offer? This is an important as you would like. However; our experience has strategy discussion. You never want to offer so low proven that once we hit 3 counters the chances that you insult the seller, but you also want enof reaching a mutually acceptable term starts to sure you don’t over pay. Truly this answer depends diminish. The goal to find mutually acceptable on many factors like the type of market you are terms and we want to find the bottom of the seller’s in. There are times when an offer of 5% below acceptable price range but we don’t want them to or even 5% above are perfectly acceptable and feel they are being taken advantage of. there are times when it is not. When we sit down to prepare the offer, the topic of price strategy will be discussed in-depth.
Informed BUYERS Guide • 2023
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Legal Your offer is a legal document, so ensure you read and understand everything outlined in the paperwork. You have the option to take the offer to a lawyer for review prior to signing anything. And remember, if you don’t understand it, don’t sign it.
Buying a home is a big deal, from the shopping and vetting process, to the financial and emotional commitment you are about to make. The offer is also a legally binding document. All your questions around how to make an offer on a house are valid, as these seemingly small details will have a domino effect throughout the rest of the purchasing process and even long after you have taken possession.
Conditions, Home Inspections And Waivers The offer has been accepted. Now we need to satisfy the conditions.
Satisfying the conditions usually involves performing a home inspection, collecting the remainder of your personal information and the property information and submitting it to your mortgage broker or lender. At this point you will be looking to finalize any outstanding decision regarding your mortgage and ensuring you have met all the lenders terms. They might ask for an appraisal or for additional documents. At this point we would also be completing any other tasks like a water test, survey, requesting condominium documents etc. We will help you make the necessary arrangements to ensure the entire process runs smoothly and is completed before deadline. It is at this time that our resources and contacts come in handy. You will need to add a home inspector to your buying team. Home inspections allow you to scrutinize the details of the home and save you from unpleasant surprises. We ensure • The home inspector used is a qualified professional • The home owner checks the visible issues with plumbing, electrical, roofing, insulation, walls, ceilings, floors, windows, and the foundation. We will also ensure they check the chattels like furnace, air conditioner are in working condition. • That you receive a detailed report that summaries the condition of the home. • The home inspection will provide you with an up-close and personal look at the home, it will take about 3 hours to go through all the systems, and if there are any problems you will see them with your own eyes. The home inspector will even provide maintenance directions and tips. A member of the AG team with be with you the entire time.
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Buying Concerns Legal concerns Selecting a layer can be frustrating especially if you don’t already have one you know and trust. We can recommend a reputable lawyer that is well known in the area. Your lawyer is an important part of the home buying process and will take care of all necessary legal procedures to implement your Agreement of Purchase and Sale. These procedures include • Conducting a title search • Preparing necessary documents (deeds, charges, discharges, registrations) • Ensuring all conditions of your agreement are met and representing you if a problem should arise • Completing and closing the deal Choosing the lawyer or notary Your lawyer or notary is an important part of your buying team. It is their job to ensure that you get what you are paying for and in accordance with the terms of the agreement of purchase. Your layer/notary will ensure: • there is nothing on the title that is not supposed to be there • the property taxes, utilities and condo fees if applicable are up to date • you have all the information you need about the new home • your mortgage provider is satisfied and that your mortgage is secured on property title as required by your mortgage agreement • you know exactly how much money you will need in order to complete the transaction • they also ensure the seller gets paid the purchase price • that title is legally transferred Legal concerns Selecting a layer can be frustrating especially if you don’t already have one you know and trust. We can recommend a reputable lawyer that is well known in the area. Your lawyer is an important part of the home buying process and will take care of all necessary legal procedures to implement your Agreement of Purchase and Sale. These procedures include • Conducting a title search • Preparing necessary documents (deeds, charges, discharges, registrations) • Ensuring all conditions of your agreement are met and representing you if a problem should arise • Completing and closing the deal Choosing the lawyer or notary Your lawyer or notary is an important part of your buying team. It is their job to ensure that you get what you are paying for and in accordance with the terms of the agreement of purchase. Your layer/notary will ensure: • there is nothing on the title that is not supposed to be there • the property taxes, utilities and condo fees if applicable are up to date • you have all the information you need about the new home • your mortgage provider is satisfied and that your mortgage is secured on property title as required by your mortgage agreement • you know exactly how much money you will need in order to complete the transaction • they also ensure the seller gets paid the purchase price • that title is legally transferred Informed BUYERS Guide • 2023
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Completing the Sale The Role Of Your Lawyer Your lawyer’s job is to certify good and marketable title to the property, free of encumbrances, liens and judgments. Your RE/MAX Hallmark® REALTOR® will deliver all documentation related to the sale to your lawyer. Registering The Mortgage The lawyer receives instructions from the mortgage company, prepares the draft mortgage document, forwards the draft to the lender, makes amendments if required and arranges for you to sign the documents. The mortgage company then releases the funds to your lawyer. Some lenders prefer to pay the property taxes on your behalf to ensure the taxes are never in arrears. In this case, the mortgagee will hold back a certain amount from the advance on closing to start a tax account. Your payment will include the taxes in addition to the regular principal in interest. Check with your mortgage representative to see how your taxes will be handled. Insurance You are required to place fire insurance on the property. The coverage should be for at least the amount of the mortgage to be acceptable to the mortgagee. A guaranteed replacement clause is usually acceptable and must take effect on the closing date. Statement Of Adjustments The closing balance to be paid by the Buyer is “subject to the usual adjustments.” The statement of adjustments is a system of credits and debits whereby amounts are added to or subtracted from the balance to be paid by the Buyer, depending on whether or not the Seller has paid certain items in advance. Legal Fees A lawyer will usually charge between $750 and $1,000, plus disbursements, for a straightforward real estate transaction. This is payable prior to closing. Land Transfer Tax Payable by the Buyer on closing, the tax is based on the purchase price. Title Insurance: Title insurance provides insurance against the future costs of remedying most problems with the title on your property. Title insurance is not a requirement in Ontario. The decision on whether or not you should purchase title insurance should be discussed with your lawyer, title insurance company or insurance agent/ broker, to fully understand what type of protection title insurance can provide you, and to determine if other options exist. Once you get all the facts, you can make an informed decision based on your specific situation and needs. It is important to keep in mind that title insurance does not replace legal advice when purchasing property. Ask your RE/MAX Hallmark® REALTOR® to explain the benefits and cost of this service. What Does Title Insurance Cover? For a onetime fee, called a premium, a title insurance policy may provide protection from such losses as: • Unknown title defects (title issues that prevent you from having clear ownership of the property); • Existing liens against the property’s title (e.g. the previous owner had unpaid debts from utilities, mortgages, property taxes or condominium charges secured against the property); • Encroachment issues (e.g. a structure on your property needs to be removed because it is on your neighbour’s property); • Title fraud; • Errors in surveys and public records; and other title-related issues that can affect your ability to sell, mortgage, or lease your property in the future. 26
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Completing the Sale Your title insurance policy will protect you as long as you own your property, and will cover losses up to the maximum coverage set out in the policy. It may also cover most legal expenses related to restoring your property’s title. Land Survey When you make an offer on a freehold property you will usually ask the Seller to provide a copy of the survey for the property. The purpose of this survey is to show the boundaries as well as the footprint of the building on the site. If there is no survey available, you may wish to hire a surveyor to prepare one at a cost of approximately $1,000 to $2,000.
AND IT’S YOURS
Your AG REALTOR will work closely with you and your lawyer to make sure everything is in place for a smooth and efficient closing. ®
Typically, a day or two prior to the closing, your lender will forward all loan documentation to your lawyer and let you know the amount required to complete the purchase. You will be responsible for bringing the balance of your down payment and closing costs to your lawyer in the form of a certified cheque. At the closing, your lawyer will guide you through the many documents you need to sign.
Closing Cost of a Transaction Home Inspection: A home inspection is strongly recommended for most residential and rural properties and will usually be a condition of your offer. I have a list of recommended and licensed inspectors that I can refer you to. The costs range from $400-$550 depending on the size and value of the property. Well & Septic Inspections: These are highly recommended for purchasing a rural property. The average cost of replacing a septic system is $25,000 and a well is $10,000. These are very important components of the home that need to be tested. The average cost for both inspections is $450-$550. Appraisal Fee: When you apply for a mortgage, the lender will want to see an appraisal on the property to ensure that the price you are paying falls within the accepted range of value for that type of property and area. The fee for this is usually between $250-$350 but for more detailed properties with extra out-buildings & land, larger home it can range from $1,000-$2,500. Land Transfer Tax: Effective January 1, 2017, the tax rates for land transfer tax will depend on the date of the agreement of purchase and sale, example below. • amounts up to and including $55,000: 0.5% • amounts exceeding $55,000, up to and including $250,000: 1.0% • amounts exceeding $250,000, up to and including $400,000: 1.5% • amounts exceeding $400,000: 2.0% • amounts exceeding $2,000,000, where the land contains one or two single family residences: 2.5%. Legal fees: Once you sign your offer to purchase, you’ll need to hire a real estate lawyer to handle your paperwork and file your transactions. This includes conducting a title search, registering your new place in your name, and making sure the down payment and land transfer tax go to the correct offices on time. Average Cost: $1,500 and up, including both fee and disbursements for title search fees, couriers and administration. Informed BUYERS Guide • 2023
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Preparing to Move Typically you will have anywhere from 30 to 90 days to get everything ready for your new home. It could be shorter or longer depending on what you need and have agreed upon with the seller. The closing date is usually the same as your move in day. It is a good idea to get things organized well in advance of the closing date to reduce the stress of the move. Lawyers: generally it is nice to meet with your lawyer up to a week before closing to finalize everything. AG will send your lawyer the information about the purchase but you will need to provide the lawyer with proof of insurance, your down payment information, fee payments, any adjustment payments, and possibly sign multiple documents. Down payment and closing costs: make the necessarily arrangements to have funds available well in advance of when the lawyer requests it. Should you need to liquidate assets you will want to ensure you provide yourself enough time. Movers: whether you are using professional movers, renting a truck or getting a bunch of friends together, plan and organize early
Making an offer and closing the deal
Insurance: the lawyer will require proof of insurance before the closing so that the mortgage lender can release the funds. Call your insuranceChange broker with the listingchecklist information. They will want to know the age of the house, of address condition of the roof, furnace,The electrical and more. Your home inspection report will greatly help in providing following checklist will ensure you tell the right people and this information. services about your new address. Don’t forget to change your address!
Personal contacts
Healthcare professionals
You can make sure youʼve reached all your contacts by going through the contact list in your phone or your address book.
Itʼs important to keep your healthcare records up to date. You can update your address by phone or at your next appointment.
Relatives
Doctor(s)
Friends
Dentist
Employer(s)
Veterinarian
Schools, colleges, universities and daycares
Other healthcare specialists
Landlord (if necessary) Clubs, associations and charities
Creditors and services Try to give service providers plenty of notice so that you keep receiving the same level of service at your new address.
Government services It is important to notify several government departments and update official documents if your address changes. Driver's license Health card
Phone, cable and internet companies
Vehicle registration
Electricity/hydro
Canada Post / epost
Natural gas Heating fuel company (ask if you will get a deposit refund) Financial institution(s)
Canada Revenue Agency Canada Pension Plan / Quebec Pension Plan Old Age Security Employment insurance
Credit card companies Insurance companies and broker(s) Lawyer or notary Subscriptions such as newspapers, magazines and loyalty programs
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Informed BUYERS Guide • 2023
Closing Day Closing day is an exciting time. It’s when you finally get to take legal possession of your new home. The final signing generally happens at your lawyer or notary’s office along with the following events. • Your lender gives the mortgage money to your lawyer or notary. • You give your down payment (minus the deposit) to your lawyer or notary, along with the closing costs (typically 1.5% to 4% of the purchase price) to cover legal fees, land transfer taxes and other costs. • Your lawyer or notary pays the seller, registers the home in your name and gives you the deed and keys to your new home.
Move In As your personal REALTOR®, we know our role doesn’t end just because we’ve handed you the keys
You can call on us any time. Whether it’s: • recommendations for contractors or other professional services to hire • any issues with your home after the move in • questions for the listing agent or previous owner • evaluation of the home value over time • questions about the local real estate market • advice on purchasing an investment property or leisure property • if you have a friend looking to buy or sell • when you are thinking of selling Or any other real estate related matter you need! As always our advice is fast, free and confidential. We are here through your move in date and beyond.
Informed BUYERS Guide • 2023
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agrealestategroup.ca Serving Prince Edward County, Napanee, Belleville and area.