Urban vs Suburban

There are pros and cons to living in both, but one important factor is the cost of living in each location. If you prefer to live in the city, look at all your options to see what your budget will get you in the city, versus what it will get you in the suburbs. After weighing both options, the question remains, Urban vs. Suburban?

Explore the Neighbourhood

Depending on if you are a young professional, are raising a young family, or are downsizing, you are likely looking for a likeminded community and neighbourhood where you will fit in. While conducting online research is a great place to start, nothing is better than first hand experience. These tips will help you choose the perfect neighbourhood.

Research Proximity to Work and School

Did you know that many Canadians feel that the time it takes to get to work is often as important as the job itself? According to the survey, commute time could be a deciding factor in choosing one job over another, and the same applies for choosing the location of your home. When choosing a neighbourhood, take some time to research the proximity to work and schools. Don’t forget to use the Travel Time calculator on the search page of remax.ca to help you take the guesswork out of choosing a location.

Think About Family & Friends

Finding the right locations means considering the distance to family and friends, and how long it will take you to get to them. If a new location will mean you are further away from the people closest to you, you must consider if it is still the right option for you.

Look Into Crime Rates

One of the main reasons your house feels like home is because as soon as you walk through the door, you feel safe. Getting a good understanding of what happens in the neighbourhood you are considering moving to can easily be done by conducting research on the crime rates in that area, compared to the other areas you are considering.

The Paperwork

When you’re ready to make on offer on a house, your agent 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.:

• 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, the buyer should come prepared to make a deposit on the home they 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 the buyer walks away from the deal, in most cases he or she will forfeit their deposit.

There’s no standard deposit amount. It will vary based on the type of property and how badly the buyer wants this particular home. The way the deposit is handles also varies by province, but it’s generally given to the seller’s agent, to be held is 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. It’s a good idea to get pre-approved for a mortgage. In case you have to move quickly with your offer, you’ll be ready in terms of your financing. As a buyer, you’ll know exactly how much you can spend, and the seller also wants the reassurance that you will not back out of the purchase based on financing.

Firm vs 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. 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.

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.

Legal

Your offer is a legal document, so ensure you read and understand everything outlined in the paperwork. The buyer has 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’re 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’ve taken possession. Work with an experienced real estate agent and a good real estate lawyer to ensure your best interests come first.