The Informed Buyer's Guide : simplebooklet.com

STEP 01 Deciding Where and What to Buy Congratulations on taking this first step toward buying a home Pride of home ownership is indeed one of life s greatest joys and biggest accomplishments It is an exciting time and my hope is that this guide will bring clarity and peace of mind during your home buying journey Let s get started The first step is deciding where you want to live what type of home you are looking for and what features are must have s or would be nice to have s in a home Invariably there will be tradeoffs but rest assured I am here to help sort through the options to find you the best house at the best price and with as many of your wants and needs as possible 2

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Questions to Help You Get Started The next few pages are intended to assist you in narrowing down exactly what you re looking for in a home This process can also be completed online at my website The Essentials What type of home are you looking for Single family semi detached condo etc ______________________________________________________________________________ What style of home is best for you Bungalow split level two storey duplex etc ______________________________________________________________________________ What about the age of the home ______________________________________________________________________________ How many bedrooms and bathrooms do you need Square Footage requirements ______________________________________________________________________________ What are you looking for in a kitchen family room Do you want a separate dining room What is your preferred layout ______________________________________________________________________________ Features What are your high priority features Hardwood floors separate tub shower in the master etc ______________________________________________________________________________ What other types of rooms do you need Main floor laundry room home office etc ______________________________________________________________________________ 3

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Questions Continued Exterior What size of yard are you looking for Is the backyard important Or is a side yard okay ____________________________________________________________________________ What about the front yard ______________________________________________________________________________ What other landscaping features are important A fenced yard play areas pool garden etc ______________________________________________________________________________ Is it important what direction the house faces _____________________________________________________________________________ Goals Who are you sharing this home with and what are their needs For example pets might need a fenced yard or extended family needs a separate entrance ______________________________________________________________________________ _____________________________________________________________________________ How much do you want to invest beyond the purchase price of the home in terms of financial or sweat equity if you can t find all the features that you want ______________________________________________________________________________ How long do you plan to live here This can impact the type of home the location and how much you will spend ______________________________________________________________________________ 4

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Questions Continued Features Continued What about storage space ______________________________________________________________________________ Basement Finished or Unfinished Would a large rec room be okay ______________________________________________________________________________ Do you need a garage or extra parking spaces ______________________________________________________________________________ Is energy efficiency important Newer windows or a high efficiency furnace ______________________________________________________________________________ Location How is your daily commute How easy is it to get to the places you need to go ______________________________________________________________________________ How close do you need to be to the highway shopping hospitals etc _____________________________________________________________________________ Are there any important location factors View from the backyard close to community amenities ______________________________________________________________________________ Is there a specific school district you want to stay in ______________________________________________________________________________ Do you have specific neighborhoods in mind ______________________________________________________________________________ Any HOA restrictions HOA preferred or not preferred Swim tennis HOA cost restrictions Etc ______________________________________________________________________________ 5

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STEP 02 Getting Pre Approved for a Mortgage The mortgage industry is a highly competitive field and it is important to understand that interest rates can change at any time Partnering with a mortgage advisor and or financial institution to help you find the right mortgage product at the best rate is key to your home buying process 5 Easy Steps to Get You Pre Approved For a Mortgage 1 Talk with a mortgage advisor Ideally someone who comes highly recommended There are hundreds of options to choose from when it comes to lenders You may already have a relationship with a lender you have used in the past or ne referred by a friend or family I d be happy to recommend someone as well 2 Complete and submit your application with the mortgage advisor They will collect your financial and personal information in order to find out how much mortgage you can carry 3 Gather all the necessary documents The mortgage broker will give you a list of documents that the banks lenders need to finalize the mortgage 4 Verification of your details They will do their checks and balances to make sure you are not getting in over your head 5 Obtain a copy of your pre approval This is a powerful negotiating tool especially in a multiple offer situations The seller of your dream home will feel more confident that you are the right person Having Pre Approval Documentation Can Offer Other Benefits Saves you time by only looking at properties that fit within your ideal monthly cost Rate guarantees and mortgage terms can save you money for years to come Less stress throughout the process You will know that you are ready and capable of buying Get a better deal on the home that you want Sellers typically prefer to negotiate with Buyer s who already have their financing in place 8

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STEP 03 Choosing The Right REALTOR First it s important that you understand whose interests REALTORS are legally bound to serve in a real estate transaction Listing Agent The Listing Agent is in a contractual relationship 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 Buyer Agent or Your Personal REALTOR When you engage the services of your own personal agent someone who enters into a contractual relationship 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 negotiation of the offer to purchase to achieve the best possible price and terms Expert advice on market value inclusions location as well as help you 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 As your Personal REALTOR my job is to ensure you are an educated buyer in all aspects of your home buying process 10

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STEP 04 Become an Educated Buyer The RE MAX Legends Home Buyer Service Program Educated buyers can make informed decisions creating a stress free and enjoyable home buying process With that in mind my exclusive Home Buyer Service Program will empower you with key market information and every possible advantage to ensure you become an educated buyer Here s what you can expect from me when you enroll in my program Absolutely no fees or costs to you as my buyer Access to property listings based on a variety of search parameters only available in multiple REALTOR MLS Access to a database of expired listings that may reconsider selling Proactive prospecting in your desired area to locate potential sellers with homes that match your criteria Homes that are not actively for sale on the market now but may be considering selling Access to For Sale By Owner homes that match your criteria Up to the minute access to the best deals on the market including brand new MLS listings newly price reduced properties current bank power of sales new home options private sales and deals under contract that have fallen through The most current real estate market information that may impact your buying decision including mortgage changes statistical sales data on median house prices sales and months of inventory local area market changes trends and much more 12

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Education Process Be Informed Every Step of the Way 1 After our initial fact gathering meeting I enter a detailed summary of your wants and needs for a home into my database and a variety of property search programs 2 I won t bombard your email with information that is not relevant to you The RE MAX website can daily update emails with any new listings or listings with price reductions that match your criteria We can always broaden the scope of what you are looking for if we aren t finding any homes that match your needs 3 As market area specialists with a pulse on local and national real estate market trends and changes we also ensure you are kept informed of all relevant industry changes that may impact your buying decision including price trends and mortgage rates 4 You get all the information about every property as well as professional guidance on values in the area and potential repair costs 5 When you find a home that piques your interest simply contact me and I can provide you with additional information on the home as well as schedule a virtual or in person showing Remember when selecting what homes to view Choose different styles and types of home that meet your needs Drive by the home and area or view the home on google maps for your first impression Select a maximum of 5 homes to visit in one day 3 to 4 is best Virtual Showings are also a great option to view homes in advance these can be prerecorded or live Schedule time after the showings to discuss the homes merits 13

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STEP 05 Making an Educated Offer The ongoing communication and education you will receive from our team will empower you to get the best possible deal on the home that you desire You ve found the one Fantastic Here s what happens next 1 I will conduct a detailed CMA Comprehensive Market Analysis complete with comparable active and expired listings recent sold comparable homes and historical data relevant to determining the market value of the home This will empower you to make an informed decision 2 I will prepare an offer that protects you follows your instructions and matches your schedule and needs 3 I will explain the details of the offer the terms and suggest options for specialty clauses ensuring you know exactly what you are agreeing to 4 I will present and negotiate the offer on your behalf to get you the home that you want at the price and terms you want What happens after this The seller may accept your offer congratulations The seller may reject your offer not common but it can happen and I would endeavor to find out why The seller may counter sign changing the terms of the offer and presenting the offer back to you Our negotiations continue until we reach agreeable terms between the seller and yourself or until I know an agreement cannot be reached and it is time to walk away 14

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Negotiation FAQs 1 How long will the negotiations take This is perhaps the most shocking part of things for many people Commonly negotiations are wrapped up within 24 48 hours on a traditional resale property In other words if we were to write an offer at noon it would not be unusual to receive a response typically a counter offer by the evening If we didn t get it to an acceptance that evening it wouldn t be unusual to have an accepted offer by the next evening Keep in mind that corporate investor and bank owned properties can take significantly longer for negotiations especially when an offer is submitted on the weekend 2 If the seller accepts my first offer am I forced to buy and shouldn t we have then offered lower No and no Unless we are writing an offer without contingencies which is unusual and we ll have talked about this a lot beforehand in that case you will have a time period typically 7 14 days to investigate whether or not this home will be acceptable to you If you don t like something you find out about this home during that time period we will be able to walk away and the contract will terminate 3 How low should we offer This is a strategy question and the answer is that it depends on too many factors for there to only be one answer There are times when an offer at 5 off the list price is perfectly acceptable appropriate Similarly there are times when an offer above list price is appropriate When we sit down to prepare an offer we will discuss this topic at length 4 What if there are other offers Will I know what they are offering When an offer is received the listing agent has a duty to present the offer in a reasonable amount of time Additionally offers have an expiration date meaning that if the seller does not respond before a certain time the offer terminates Despite this there are occasions when homes attract multiple offers We ll talk through detailed strategy should this happen but here are some basic things to know When you submit an offer knowing that there is another offer you will likely only get one chance to offer In other words it is rare to see counter offers made at this point it is assumed that buyers are offering their best terms and the seller will typically just choose an offer In order to make your offer as competitive as possible we will want to ensure that we have as few contingencies as are necessary to properly protect you we are offering as high a price as you are comfortable with and we are offering the closing date that most closely match what the seller is looking for From this perspective the experience of multiple offers is very similar to making blind bids at an auction The seller will typically not disclose the price they have accepted for fear that it will jeopardize future negotiations should this offer fall through 5 How many counter offers can we make As many as you d like However our experience has proven that once we get past 3 counter offers from either side i e 5 6 total counter offers our chances of reaching mutually acceptable terms start to diminish Remember the goal of a negotiation is to find mutually acceptable terms Our goal is to find the bottom end of their acceptable price range and we will never do so if they feel like we are trying to take advantage of them 15

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Glossary When buying a home there are certain documents and information that is common across all types of property be it a single family home condo or townhouse Title This document is registered at the land title office at the time of completion and it is proof of ownership Charges to the title such as mortgages easements covenants etc will show up on this document Property Disclosure Statement The seller fills out this document at the time they list the property for sale The form is a representation of the condition of the home to the seller s knowledge Community Association Disclosure The Seller fills out this document at the time they list the property for sale This form advises a Buyer of all the fees associated with an association including annual fees initiation fees and assessments Fixtures These are items that are affixed to the wall ceiling that should be included with purchase These are usually items that have been screwed in ie chandelier as well as most appliances Personal Property Personal property are items at the property that are not included in the sale Most Buyer s are aware that furniture does not transfer with the sale However there are a few items that a Buyer might expect to be included which are not It is important to review the Sellers Property Disclosure carefully before submitting an offer so that any items you believe to be included are noted in the original offer Note Refrigerators wine fridges curtains curtain rods etc do not stay with the property unless they are specifically requested in a contract and or noted on the seller s property disclosure as remaining Condition of The Home The condition of the home at the time of purchase should be in the same condition as when the buyer last viewed the home The challenge some of our clients have experienced is that their opinion of condition and the sellers has been different Rest assured that if this becomes a problem we will work with you and the seller to get a resolution Closing Closing is the day that the money and title of the property exchanges hands this is handled by the closing attorneys Your lender will need to send all documents to the closing attorneys office at least the day before closing You will need to wire funds to the closing attorneys office note Never send a wire without calling the attorney on the contract to confirm the wire instructions Once all parties sign documents and the funds are received the property is closed and the property sold Possession Possession is the day you get physical possession of the property Sometimes this is on the closing day However sometimes this occurs 1 3 days after closing We will work with you during the contract negotiations to determine the best move in date for you and the Seller 16

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STEP 06 Conditions Home Inspections and Waivers The offer has been accepted Now we need to satisfy the conditions This usually involves performing a home inspection getting the rest of your personal information and the property information to your mortgage advisor or bank and arranging for the other information that might be necessary like surveys water tests and homeowner s association documents I will help you make the necessary arrangements to ensure that the entire process runs smoothly before the deadline Next you will need to add some people to your team Finding a Home Inspector Home inspections allow you to scrutinize the details of the home and save you from some unpleasant surprises We have a comprehensive list of recommended professionals at www rmlgvendors com and you may have recommendations from family and friends as well but keep in mind when making your decision Ensure that the home inspector is a qualified professional We recommend using someone who is ASHI and or NACHI certified Ask if the inspector offers other services with their home inspection such as radon detection mold inspections pest etc Keep in mind the home inspector may recommend other professional inspections like roof HVAC and potentially even structural All inspections need to be completed during your due diligence time period so the sooner you can get your home inspector to the property the better 17

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Choosing a Closing Attorney Your closing attorney is an invaluable member of your team whose job is to ensure that you get what you are paying for and in accordance with the terms of your contract Your closing attorney and title company will ensure There is nothing on 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 that you need about your new home Your mortgage lender 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 complete the transaction They also ensure that the seller gets paid the purchase price Title is legally transferred Closing Attorney Recommendation Title Company Recommendation Experienced Attorneys Streamline Contract to Close Experience 22 Locations https www luederlaw com Provides legal descriptions and lien searches Experiences Liaison between your REALTOR and the closing attorney 18

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STEP 07 Preparing for Closing Day and Moving Day Typically you will have anywhere from 30 to 45 days to get everything ready for your home It could be shorter or longer depending on what you need and have agreed upon with the seller The closing date may be your move in date or you could agree to give the Seller a couple of days to move out after closing in which case your move in date would be a shortly after closing It is a good idea to get things organized well in advance of the closing date to reduce the stress of the move Closing Day Closing Attorney I will send the closing attorney the information about your purchase You will need to provide the lawyer with some additional information insurance down payment information fee payments adjustment payments and possibly other signed documents that they ask you for You will meet the closing attorney on closing day when you sign all the documents for closing Down Payment and Closing Costs Make the necessary arrangements to have the funds available when the attorney asks for it Liquidating some assets can require additional time Wire transfers will be need to be completed the day before closing Please remember to ALWAYS call and confirm wire instructions before sending funds Insurance The lender will typically need a copy of your home insurance before closing Call your insurance rep once you have the appraisal back on the purchase to check rates for a new policy They will need the date of the home age of improvements etc Most of this information can be found on the appraisal which makes it the best document for them 19

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Moving Day My team offers a complimentary moving concierge service which will guide you through the moving process This takes a lot of the stress out of wondering what you need to be doing and when you need to do it Here are some of the steps the service will walk you through as you approach moving day Change of Address It s time to start giving out your new address to everyone Voter Registration Your mailing address isn t the only thing that changes when you move it also changes your voting precinct The voter registration change can normally be completed as part of the change of address process Utilities It is important that you call the local utilities to get their services changed into your name These include phone internet television gas electricity water and any rental agreements You will also need to cancel services at your current residence Movers Whether you are using professional movers renting a truck or getting a bunch of friends together plan and organize it early Storage You may find that you need to move some items into storage before moving day or for a short time after Keep in mind most movers will not put lawn equipment and gas on the trucks so those items are sometimes stored during a move Movers Whether you are using professional movers renting a truck or getting a bunch of friends together plan and organize it early 20

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STEP 08 Move in Congratulations 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 on contractors or other professional services to hire Any issues with your home after moving in Assistance with filing for Homestead Exemption Questions for the listing agent or previous owner Evaluation of your home value over time Guidance on Property Tax value disputes Questions about the local real estate market Advice on purchasing an investment property Referrals to friends and family When you re thinking about selling Or any other real estate related matter you need As always our advice is fast free and confidential We re here for you through your move to date and beyond 21

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Common Closing Costs and Contract Expenses for Buyers There are two types of expenses that you should consider during the home purchase process The first are contract expenses These are expenses and deposits that must be paid prior to closing The second are closing costs expenses These are expenses and deposits that are paid at closing Contract Expenses The include the costs you incur for inspections of the property surveys appraisal and your earnest money deposit Earnest Money Deposit This is paid at the time of contract acceptance The amount of the earnest money deposit is part of the negotiation process However you could plan to be requested to make a deposit for no less than 1 000 and typically closer to 1 of the Purchase Price of the property This money is fully refundable during your due diligence You may also have additional financing and appraisal contingencies which protect your earnest money We will discuss all of those terms during the contract process In the event you breached the contract or missed a contingency deadline you could lose your earnest money This is one of the reasons it is so important to have someone paying close attention to all deadlines and contingencies during the contract to close timeline Appraisal Cost The appraisal cost is technically considered a closing cost However it is paid during the contract timeline Your mortgage advisor will let you know when this is due and the exact cost It typically ranges from 450 650 dollars depending on the size of the home Inspection costs These are optional but highly recommended Inspection costs are paid at the time of service and are not refundable Your total inspection costs depends on how many inspections you elect to have Home inspections can range between approx 450 650 depending on the size of the home Radon pest HVAC Septic Lead etc Inspections can increase the total However it is important to remember that while an inspection might be 100 200 more than you want to spend up front the information from those inspections can save you tens of thousands of dollars in the future 22

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Common Closing Costs and Contract Expenses for Buyers Closing Cost Expenses Funds to cover your down payment and closing costs will most likely have to be in the form of a wire transfer to your closing attorney s trust account Your lawyer will detail the exact amounts required for Part of the contract negotiations may include requesting the Seller to provide a credit for part of your closing costs However keep in mind that the Seller will always consider the bottom line net of your offer ie The offered price less any requested seller paid closing costs Example an offer of 250 000 to a Seller with a request for 5 000 in seller paid closing costs will be considered as an offer to purchase for 245 000 Balance of down payment after the earnest money deposit is applied Loan origination fees Points or loan discount fees you pay to receive a lower interest rate if applicable Credit report fees Mortgage insurance premiums if applicable CMHC Land transfer tax and title registration fees Title insurance policy premiums Survey expense if applicable sometimes this is paid before closing and adjusted at closing Legal fees and associate disbursements couriers copies etc Pro rated amounts for your share of any prepaid costs such as utility bills and property taxes 23

The Informed Buyer's Guide

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