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Real Estate FAQs

 

Real Estate FAQs Answers

 

1.    How do I know if a list price is fair?

Your Real Estate Agent will look at the sales history for the past 6 months of similar properties and compare recent sales in the area to determine true market value.

 

2.    How do I know what price to offer?

Most Real Estate Agent will advise you to make an offer based on competing offers, recent sales, the condition of the property and any other factors that may be relevant to the price.

 

 3.    Why do I need a home inspection?

A thorough home inspection gives you information about the condition of the home’s structural foundation, and any electrical, plumbing or energy issues it may have. An inspection might  stop you from buying a property if it needs too much work, give you an opportunity to make a lower bid, or ask the seller to make the necessary repairs. You can place an offer or a property conditional on a subsequent home inspection.

 

4.    What happens to the deposit I made while I wait for closing?

 It’s held in the listing brokerage’s trust account until closing when it is applied towards the purchase price and related costs. You may be entitled to the interest accrued on the deposit once the property has closed if an interest-bearing clause was part of your original offer.

 

5.    What is a bidding war?

 A bidding war is another term for multiple offers on a property. Your real estate agent can advise you in advance whether a property is likely to have multiple offers, and work out a strategy to help you place the winning bid.

 

 6.    How do I found out about open houses?

 Ask your real estate agent for listings of open houses, drive around the areas you want to live in, and check out MSL.ca.

 

 7.    How long do I have to wait until closing?

 Most closings are within 30-60 days from the date of acceptance of the offer, but they can be as long as 90 days.  This varies based on buyer and seller needs and other practical concerns.

 

8.    When should I make my offer conditional?

Conditional offers are considered to be a weaker offers by the industry, but are sometimes necessary. A condition in the offer means that the contract isn’t binding until conditions are fulfilled or waived. They could include getting financing from a mortgage broker, repairs to the property, or your lawyer reviewing status certificate documents in the case of a condo.

 

 9.    Do I need a lawyer if everything seems standard?

It’s in your best interest to hire a lawyer to go through the Contract of Purchase & Sale and related documents, and to do a title search for the property to ensure that it is free from encumbrances.

 

 10.  How much of a down payment do I need?

 You’ll need at least 5% of the purchase price if it is your principal residence or 2nd home. A minimum of 20% or less if you are purchasing an investment property.

11.  What happens if I make an offer on a house and change my mind before I give them a deposit?

Contact your real estate agent immediately and discuss the situation with them. Depending on the terms and conditions of their offer you may be able to walk away, but there is no guarantee. Each circumstance is different. Think very carefully before you make an offer to purchase to avoid potential problems down the road.

 12.  I’ve been pre-approved for a mortgage. Does this mean that Ican waive conditions?

No, you have to ensure that the property you’re purchasing also passes the mortgage lenders’ approval. Your lender may request an appraisal of the property. Once the lender approves both you and the property that you’ve made the offer on, you can waive your financing condition. Ensure you get formal approval from the lender before you remove the financing condition from your purchase contract.

 

  13.Why should I buy a home instead of renting?

Most people feel a sense of pride when they own their own home and finally   have the freedom to do what they want. They may also be able to save money on taxes by deducting usage in square footage from their home if they have a home business. Your home may also increase in value over time. 

 

  14.  Can I buy a home if I’ve declared bankruptcy in the past?

That depends on the circumstances surrounding your bankruptcy, but most    lenders would consider giving mortgage financing if you have re-established credit for 2 years or more with at least 2 creditors.

 

15. What should I consider when I choose a neighborhood to live in?

First you have to like the area, and it should be located near good schools, parks, community centres, shopping, transportation, and have a history of sound development policies. You might also consider how the neighborhood might change in the future. Is it in an area where property values are likely to rise and provide you with a good investment return?

 

 16. What is an appraiser?

A real estate appraiser is an impartial, independent third party who provides an objective report on the value of real estate known as an appraisal. Most licensed appraisers will provide the value of the property using the cost-to-build approach and recent sales as comparable. High-ratio mortgages generally do not require an appraisal. Conventional mortgages will require one, the broker or the lender will contact the appraisal company and book the appointment. You may want to confirm who is to pay for the cost.

 

  17. What if my offer is rejected?

This is often the start of the negotiation process.  You may have to offer more money, an earlier completion date or reduced conditions that might not be important to you. Generally, the offer goes back and forth a few times, it is negotiated or the offer collapses.  Ask your real estate agent for guidance, and do not get carried away in the heat of the moment and spend more than you can afford. This is where a real estate agents expertise is invaluable.

 

 18.  If I find a home I like, should I call the real estate agents number on the sign?

No, you should call your own realtor. The real estate agent listed on the sign works for the seller and has no fiduciary duty to you. This is a major purchase and you want a realtor who can guide you and keep only your best interests in mind. Another way to think of it is, would you hire a home inspector that is working for the seller?


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