Buying a Home with Marty Schaap

Buying a home involves a process, and if done carefully and thoughtfully, should result in you having a home plus a good long-term investment. The beginning of this adventure it can seem very overwhelming to both experienced and novice Buyers. Whether you are interested in buying an executive, luxury estate home or small, single bedroom condo, you may appreciate help.

Here, then, is a step-by-step game plan for finding a home and working with me to make it yours.

GETTING READY: How much money do you have set aside for your down payment? This will affect the size of mortgage you will need and whether you can even consider buying. The more money you have the lower the amount you need to borrow. Round out your preparations by getting pre-approved for a mortgage. Find out how much money the bank will let you have and how much it will cost to carry. You can also get a mortgage rate locked in for 90 days or more, depending on the lender. I can help you get in touch with a mortgage representative who will be very helpful for financing.

FINANCING OPTIONS: If you don’t have the 20 percent down payment needed for a conventional mortgage, you will need mortgage insurance. This can cost up to 3.5 percent of the amount of the loan. Most people add this cost to their mortgage principal, which will increase the monthly payment somewhat. First-time buyers, or people who have not owned a home in five years, can borrow up to $20,000 each from their registered retirement savings plan to help pay for a home purchase. The money must be repaid in annual installments within 15 years or there is a tax penalty.

WISH LIST: What do you want your home to have? Two car parking, pool, fireplace, eat-in kitchen, walk-in closets? What neighborhood do you want? Local amenities? Transportation? Put it down on paper. This list will change according to affordability and as you look at homes. It will serve as your guideline as to what is truly important to you and show you where you can compromise if needed.

START SHOPPING: We will sit down together and review your wish list, financial data, benefits and concerns of individual properties and of various neighborhoods to get a sense of what available properties will be best for you. The number of houses we visit is wide open, but be aware that you can’t always get what you want. I would like to work under the assumption that you are ready to make an offer when shown the right home. I will be there every step of the way representing you and your best interests. Always remember that I work for you – the listing agent is working for their client.

ETIQUETTE TIP: It is bad form to work with more than one agent at a time. Please keep it honest – I will always be honest with you.

KEEPING SCORE: Think you can keep the details of 5 or 10 homes straight in your head? Forget about it. Take notes and make special reference to things like property taxes, interior details, the appearance of neighboring homes and proximity to schools, shopping and recreational facilities. By the way, I am going to show you the properties most likely to match your wish list first. You may find the right place the first time out!

PREPARING AN OFFER: I will help you set a value by analyzing sales of similar homes in the area. Beyond price, there is a moving date to consider as well as the question of whether you want a condition on home inspection (which you do), financing and any other inclusions to be added to the offer. Once we enter the offer process, it can be a little tense. You may be asked to stretch your budget. This is the time you’ll have to make hard and fast decisions. Offers often go back between buyers and sellers. I am there to negotiate on your behalf and for advice and support.

TIPS FOR A HOT MARKET: Committing yourself to spend hundreds of thousands of dollars on a home is best done after a long and vigorous discussion of the pros and cons and then, ideally, a night to sleep on it. Too bad you won’t have time for this in a roaring real estate market. If you find a home that you just have to have in a hot market, you will have to act fast to secure the home, usually by putting in very a strong offer. If a bidding war breaks out, set a ceiling based on your own financial position and recent market developments. Be aware that the seller may reject all bids and ask for additional money.

TIPS FOR A NORMAL MARKET: Size up the seller and then decide how aggressive you want to be with your offer. Try to find out why they are selling. Has there been a marital breakup, an estate sale, a transfer, financial difficulties? What have comparable properties sold for? Remember, hard bargaining is one thing, insultingly low bids another.

THE DEPOSIT: A deposit check with your offer is a sign of good faith. It will speak loudly of your seriousness and good will. It is amazing how far the right steps will get you. Don’t forget to ask that the deposit be placed in a term deposit so that it earns interest until it is needed to close the deal.

HOME INSPECTORS: Having your home inspected allows you to move in with your eyes open to its physical strengths and weaknesses. Recommendations from friends, family, or my recommended list are a best way to find a good home inspector. Inspections could last two to three hours and cost between $350 and $550. Be sure that he or she is qualified and experienced. Don’t be shy to ask. Also make sure your inspector has insurance to cover any errors or omissions he might make. Ensure an impartial opinion on your home by rejecting inspectors who offer to repair the problems they find.

THE DEAL: So we have made a deal, which includes agreement on the price, the down payment, the deposit, closing date, and possibly mortgage details. It’s been a hard road from beginning to . . . . no, it’s not the end yet.

Once the Promise to Purchase is accepted, signed and fulfilled, it’s delivered to your notary. The notary will then search title and determine that it is free and clear of all encumbrances including encroachments on your lot, work orders on the property or liens. You do not want to buy any problems. On the signing day you give the notary the rest of your down payment, the property is registered in your name and you are handed the key.

CLOSING COSTS: An ironic term because there seems to be no end to them. In addition to the cost of your home, there are notary’s fees and related expenses, land transfer taxes (more commonly known as Welcome Tax), a home appraisal if applicable from the bank and adjustments to cover property taxes paid in advance by the Seller. There are also adjustments made for any items leased, condo fees, and fuel adjustments. I can help you calculate that number pretty accurately for you.

PRIDE OF OWNERSHIP: Finally! This is something you’ll get from the first moment you step through the door of your new home. You’ll realize that it has all been worth it. Congratulations! The kindest way to show your appreciation for a job well done is by referring my name to your friends, family and acquaintances.

We have just begun our long-lasting relationship. Remember that I will continue to be there for you.