8 Big Mistakes That Can Cost You Money When Buying A Home
#1 Using an Inexperienced Realtor
Calgary home for sale Buyers are sometimes under the mistaken belief that using a Realtor's services costs them money. This can be an expensive mistake. You can have your own REALTOR, a Buyer Broker or Purchaser's Agent, who is committed to using the experience gained through hundreds of successful negotiations for your benefit - at no charge to you! Your Calgary real estate agent most often is paid from the same commission that the seller's agent is paid from - by the seller.
# 2 Working directly with the listing realtor
Agency is important to understand. Simply what it means is who is working for whom. The agent may be working as a sub agent - representing the seller's best interests during negotiations - or as your agent representing your best interests during negotiations. Your Realtor should always explain what the situation is beforehand. If you are not sure whom your agent is working for - ask for clarification. You need to know if information you divulge will be used for the seller's benefit - or yours. Oftentimes you have no way of knowing what a listing Realtor's relationship is to the Seller. A Realtor has to disclose blood relationships but you would never know if the Seller contacted the Realtor from a flyer or if they have been dealing together for years and they are best friends. The Buyer can end up in a situation where they are at a huge disadvantage by not understanding the intricacies of the situation. the Calgary real estate market and potentially the true value of the property that they are hopeing to buy by have a realtor that wil show them the MLS listings for comparable recent sales in the area.
#3 Not Knowing the Market or Having a Pricing Evaluation Completed
Before you make an offer to purchase that special home, you must have a good idea what the market value is to ensure you do not overpay. Your agent can prepare a Comparative Market Analysis showing what similar homes have recently sold for, and the difference between the asking and selling prices. This is the same type of report the seller receives when deciding on an asking price.
#4 Not Trusting the Experts
Failing to recognize different negotiating styles and strategies can sometimes make or break a transaction. For example; many buyers think that the way to achieve a fair purchase price is by offering low. This is the strategy of the buyer who is not in possession of all the facts essential to negotiating the best possible deal. Many times that type of strategy will polarize negotiations and lead to inflexibility on the part of the seller - or worse yet - failed negotiations!
If you have chosen your REALTOR wisely, now is the time to trust him/her. Remember, in the real estate business, an agent with many successfully closed transaction costs no more than someone who is inexperienced. That experience could mean a better deal at the negotiating table.
#5 Failing to have the home inspected by a competent Home Inspector
Many home Buyers will spend as little as a half an hour in there new home before committing to a purchase. A qualified inspector will spend up to four hours going through your property. Inspectors know what to look for and how to look. For a few hundred dollars you could save yourself some major headaches.
#6 Not knowing and understanding the Offer to Purchase contract
It is important to understand completely the terms of the Offer to Purchase. Wrong assumptions, poorly written or missing clauses, and not understanding how the clauses affect the purchase, can lead to increased costs or a void contract. Clarity is important as well as timeliness. Sometimes a Seller's motivation can change or they might have generated a Buyer that will pay them more. If a condition is not waived on time or not waived properly you could lose your house or end up paying more for it. An experienced Realtor can thoroughly explain the agreement and help you to fulfill your contractual obligations.
#7 Letting Your Emotions Get in the Way
Buying a home is an exciting time and is usually an emotional decision. It is important that those emotions be validated by facts. It is very easy to get caught up in the excitement. An experienced agent will help to balance the emotion with the information you need to make the right decisions. At a time like this objectivity can be priceless.
#8 Failing to be pre-qualified for your mortgage & obtaining a rate guarantee
When looking for Calgary homes for sale knowing how much you can comfortably afford will ensure you are looking in the right price range and prevent you from buying a home that will strain you financially and emotionally. Having an interest rate guarantee will protect you in times of fluctuating rates and ensure that your initial projected payments do not suddenly escalate, resulting in extra interest charges. A letter of pre-qualification can sometimes mean a lot at the negotiating table, be sure to get one from your lender.
Being aware of these big time mistakes will help ensure you receive best value for your dollar when the time comes to buy your home!
First Time Home Buyers Tax Credit: What it Means for Calgary Homebuyers
Starting in 2009, the Government of Canada introduced the First Time Home Buyers Tax Credit. Don’t let the name fool you – this tax credit not only applies to single-family detached homes, but it also applies to semi-detached homes, townhouses, mobile homes, condominium units, and apartments in triplexes, fourplexes, or apartment buildings, located in Canada. The maximum possible amount of the credit for 2009 is $750. This is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000.
Want to know if you qualify? An individual will qualify for the HBTC if:
- they acquire a qualifying home; and
- neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the year of purchase or any of the four preceding years.