Learn How to Write a Real Estate Offer to Purchase
As a buyer, when writing an offer on a property, you want to be able to pay the least possible amount for your
home. Sometimes buyers will offer 5-10% off of an asking price for no reason other than they were told to by a "friend" This is so silly You may want to offer more, you may want to offer less. The only way to make a reasonable offer is to do your homework.
REAL ESTATE TIP #1 - What the seller paid for their home is irrelevant.
REAL ESTATE TIP #2 - What the seller is asking for their home is also irrelevant.
Knowing why a seller is selling is always helpful when you make an offer, but this information is protected by the sellers real estate unless it is allowed in writing to be disclosed. However knowing the reason for selling is still irrelevant on the true market value of the home, as is the asking price. There are several things to take into consideration, prior to making an offer on any home.
- Market Conditions: Is it a buyers market or a seller's market? Knowing what type of real estate market you are in will help you choose an initial offer price. Completing a community absorption rate is the easiest way to know.
- Possession Date: Edmonton Real Estate Agents have access to this information and as a rule of thumb, the quicker, the possession date, the more motivated the seller is. Most homeowners in Edmonton have a 30-day negotiable possession date. If a longer possession date or a set date is asked for, this is an indication which the seller needs a specific date and can be more important than price. Keep in mind, if the property is tenant occupied, tenants do have a 90-day tenant-right. Normally, homeowners with tenant occupied properties or vacant property are more motivated.
- History: Your REALTOR® will know the history of this home. How long the sellers have owned the property, how long they have been trying to sell it and if there have been any price adjustments. Your real estate agent is also required to pull the title of the property which will indicate any recent financial debts including the current mortgage to ensure there will be enough funds to close on possession date.
- Condition and Size: Size is a factor of price more in places like China than Edmonton. The value of a home is in the condition. You may want to go back into the home to take a better look at the overall condition. Is the flooring laminate or hardwood? Are the faucets Walmart or Moen? Has the yard been meticulously maintained properly or neglected? Will you be replacing any fixtures, chattels, windows, shingles in the near future? Look at the property through the eyes of your experienced real estate agent. They will notice things you don't.
- Complete a Buyers Comparative Market Analysis: Examine all recent comparable sales. Only use recent properties that are similar in configuration, age, and location to the home you want to buy. Your REALTOR® can complete this for you.
REAL ESTATE TIP #3 - If the property has been staged, don't be fooled by how pretty it looks. Staging a home does not increase property values.
Read more about purchasing a home in Edmonton with our simple 5 step process
Did your Home Get Stigmatized?
In real estate, a stigmatized property is a property which buyers may shun for various reasons other than its physical condition or features. These reasons can include the death of someone who was occupying the home to a murder which has taken place inside the property. Some buyers believe the house may now be haunted.
- When a death occurs inside a home, it may not always be disclosed to a buyer. Although when there has been a murder, it is usually public information and can be found on the net. According to the Real Estate Council of Alberta, a murder on the property does not need to be disclosed.
- Many jurisdictions recognize several forms of stigmatized property and have passed resolutions or statutes to deal with them. One issue that separates them is disclosure. Depending on the jurisdiction of the house, the seller may not be required to disclose the full facts.
- When a home is considered a stigmatized property, the selling value may be decreased to attract more buyers. These houses are priced accordingly and purchasing one for a lesser real estate cost, financially benefit the buyers.
- Types of stigma may include houses formally used in a crime, such as a drug house or brothel. Foreclosures where debt collectors are unaware that a debtor has moved out of a residence and may continue their pursuit at the same location
- The wrong starting price can also stigmatize a property when selling your Edmonton home. When a residential dwelling sits on the market for long periods of time, buyers assume there is something wrong with it. Learn how to price your Edmonton home properly from the start.
BUYING A HOME WITH A 5% DOWN PAYMENT
Investing in Edmonton's real estate market is relatively simple. For a small amount of money down, usually, five per cent, (plus closing costs) and can own an asset worth significantly more and build your net worth. Your down payment must be from your own savings or a gift from a family member. You cannot use a loan or line of credit.
To use the 5% down payment option, the following rules apply:
The home must be your principal residence - in other words, you will actually live in the home. So if you plan on buying a condominium or other property for residual income, you won’t be eligible for the Canada Mortgage and Housing Corporation’s 5% down payment option.
To calculate your GDS or Gross Debt Service ratio, factor in your monthly mortgage payment, utility costs, property taxes and condo fees, if applicable. This number cannot exceed more than 32% of your gross taxable income. Plus, all your consumer debt, loans, and housing-related payments cannot exceed 40% of your gross taxable income: this is your Total Debt Service ratio or the TDS.
Finally, you must have good credit and a minimum of one year with your current employer.
ALSO SEE: 5 Steps to buying a home
Keep in mind, as of January 1st, 2018, the government has imposed more qualifying restrictions on Canadians and you must now qualify at two-per-cent higher interest than your current rate. Once you have your pre-approval completed. Contact an experienced real estate agent with their ABR designation and start house shopping!
Pros and Cons of Condominium Ownership
Living in a condominium in Edmonton offers a sense of community living. Whether you are taking out the trash, working out in the exercise room, relaxing in the lobby or picking up your mail, there will be ample opportunities to engage with your neighbours.
Pros of Condominium Ownership
No Maintenance. The biggest benefits of condo living are that other people do the maintenance for you. They cut the grass, maintain the common areas including elevators, amenities, windows, doors, and shingles No grass to mow or snow to shovel with the exception of detached condos and townhouse style condominiums.
Cost. Condominiums are less expensive than buying a comparable house in Edmonton. Obviously, the cost of a condo versus the cost of a house depends on the location. Property values in Edmonton vary in each neighbourhood. But typically, you'll spend less on a condo, " Maintaining a single-family house can be expensive. It is your responsibility to keep your home in living standard conditions. When purchasing the first home, going brand new is a smart choice.
Security. Most apartment condos offer gated or locked entries, with special keys or electronic fobs. If you live alone, or security is a concern for you, this can be a major perk. In addition, you’re living in close proximity to other people and in an emergency, this will be helpful.
Amenities. Exercise rooms, Guest suites, swimming pools, underground parking, and courtyards. Many condo communities offer residents amenities that are out of reach for the average homeowner.
Cons of Condominium Ownership
Homeowners Association Fees. Of course, there is a few to live in a condominium. It costs money to maintain a large building. When you buy a condo, you essentially become a business partner in that community. You pay a condominium fee each month (on top of your mortgage) which goes towards the upkeep of the property, as well as future investments. This fee can vary from a few hundred dollars upwards. It will depend on the current condition of the complex, how well the monies have been managed and future expenses.
Less Privacy. You will be meeting your neighbours. Some condominium complexes in Edmonton offer in-house managers and know everyone by name. Depending on how well your complex is built, your neighbour may even know what time you get home every day. Expect to have someone looking at you when you are out on your balcony or sitting in the front yard. Socialites love this!
Less Freedom. Depending on your condominium complex, you may or may not be allowed to have pets, have Bar-be-ques on the balcony, change the flooring to hardwood, have guests stay for long periods of time or rent out your unit. Read the by-laws before purchasing.
Levies and Special Assessments: In Edmonton, Condos have been hit hard by the recession, the oversupply and there are plenty of issues with a few Edmonton condominiums, whereas some builders missed adding building materials during construction, such as water vapours. Also as more people struggle to make ends meet, more condo owners are dropping out of paying their condo fees. This can increase the cost of what you will be paying each month.
Things to inquire on prior to purchasing a condominium
- Reserve Fund Study
- Are condo fees reasonable
- Bi-laws - are you allowed pets?
- Financials - Is the complex in the red
- Professionally or Self Managed
- AGM - Annual General Meeting
- Any upcoming special assessment
Today, several banks will request to review these documents prior to releasing your financing. Also, have your lawyer review these documents if you are not comfortable with the lingo.
Communities for Edmonton Dog Lovers
Edmonton has over 40 dog park and off-leash areas where your best friend can run and play without having you on the other end of the leash. You too can get physical and emotional benefits from exercise and by socializing with other dog owners.
My top 3 places to live for Edmonton dog owners are near
- Buena Vista - Great Meadow: A large off-leash dog park near the valley zoo, north of Laurier Park and south of Melton Ravine in the Glenora area. The Buena Vista Dog Park features an open off-leash area, access to the river valley for those dogs who love to swim, park benches, ample parking and river valley trails with maps for walking and cycling. Note* No smoking or vaping tobacco or cannabis in this park.
- Hermitage Point South located between 129 Avenue and 137 Avenue, 22 Street and the River Valley in northeast Edmonton. It features plenty of natural walking trails, picnic sites, Ambassador, portable toilets, seasonal summer fishing and a large off-leash dog area. Our Edmonton Ambassadors at the Hermitage Park Dog Park help improve the quality of our off-leash areas, and enhance the user experience for human and canine visitors by encouraging positive interactions, and creating a culture of community at the park. Homes near the Hermitage Point South Dog Park are very reasonably priced. Check them out!
- Terwillegar Dog Park in southwest Edmonton accessible via Rabbit Hill in the Riverbend District. Although the Terwillegar Dog Park is a multi-use area, it is most popular for pet lovers with larger canines. This park also has a 262-metre-long footbridge that links the park to Oleskiw River Valley Park on the north side of the river, perfect for long strolls with your best friend.
How real estate agents help home buyers when buying
There are several reasons why buyers prefer to work with real estate agents when buying a home, even when a buyer has sold their existing home via "For Sale by Owner". The few of these reasons include knowledge of the ever-changing markets, expertise in both negotiations and communities, experience and exclusive real estate tools.
A large portion of Canadian Real Estate Agents has earned their ABR (Accredited Buyers Representation) designation, which means, these REALTORS® have completed the education needed to service buyers with a higher standard. REALTORS® who are representing buyers expect to get paid for their services at some point in time. It is usually within a few weeks of the buyer taking possession of their new home. In the province of Alberta and to ensure real estate agents' are compensated for their services, a mandated agreement by RECA (Real Estate Council of Alberta) will need to be signed. It explains how much, the term of the agreement, what services will be provided and other relevant information.
If you have questions - ASK. Never sign anything you do not fully understand. Real Estate Agents deal with forms on a daily basis, and most of us can explain listing and purchase agreements without even looking at them. A good REALTOR® should have gone through each agreement and address questions or concerns you may have had. Near the bottom of both the Buyers Agreement and Sellers Agreement, there is an acknowledgement clause prior to signature placement. In an Exclusive Buyer Representative Agreement, it states...
- 14.1 You acknowledge that:
- (a) you have read this agreement.
- (b) you have received and read the Guide.
- (c) this agreement creates a sole agency relationship with us, as the Guide describes.
- (d) you had the opportunity to get independent advice from a lawyer before signing this agreement.
- (e) this agreement accurately sets out what we and you agree to.
Which means you can obtain legal prior to signing or you may want to take the agreement home to read over more thoroughly. These agreements are not rocket science, but knowing what you are signing is important.
- REAL ESTATE TIP#1: "The Guide" is referring to the Consumer Relation Guide which explains how the professional relationship including fiduciary duties and the real estate agency will interact with each other.
- REAL ESTATE TIP#2: Buyers Real Estate Agents, normally do not charge an extra fee above what is offered by a seller, unless otherwise agreed in writing.
Have a real estate question? We are here to help. Contact us anytime
Why You Need a Property Title Search
When a real estate agent in Edmonton is working for either a buyer or a seller, a property title search needs to be pulled prior to listing a home or writing an offer to purchase to ensure the saleability of the property.
Basic information on a property title will include:
- The current owners' name: In the event of an estate sale, probate may or may not have been completed and your real estate agent will ensure the person selling the property does have power of attorney. In the event, there is only one person on the title in a marriage, a dower consent will also be needed to complete the sale.
- The Legal description: The municipal or mailing address is different from the legal description and includes a block, lot and Plan number.
- The amount of the last mortgage, any second or third mortgages or the original purchase amount at the time of purchase or there may be a nominal fee.
Other things which can be revealed on a property title search may include:
- Outstanding or owing property taxes, special assessments, delinquent condominium fees which have not been paid by the seller.
- Outstanding creditors including other financial institutions and businesses for things like unpaid vehicle loans, furniture stores, construction loans, personal loans, etc
- A lis pendens, which is normally added by a lawyer during divorce procedures and "freezes" the transfer of a property until all parties are satisfied.
- Easements and Liens from a third party, such as the municipality, utility company or Environmental liens, who may have rights to use part of your property.
- Covenants which are restrictions on the land that can limit what can be built on it, where it can be built and from what materials it may be built. Breaching a covenant can have serious consequences so it is necessary to be aware of any covenants on your property.
If you are not represented by an Edmonton Real Estate Agent, with the legal description and a small fee, the public can pull the title of a property plus details on any registered documents attached to it. Also note, between the time a condition has been removed from an offer to purchase to the time a buyer signs with their lawyer, there may be a change on the land title certificate.
Are your home shopping expectations realistic?
There is no such thing as a perfect house. If you are pre-qualified and have been looking for a home for a long time, there will be one of four reasons you haven't found your dream home
You can't afford the homes you like.
Either stop looking until you save enough money to purchase your dream home or be realistic what you can afford. Your first home does not to be the forever home. Purchasing your first property is the first step to getting your dream home by building equity. However if you have found a few homes, which would only need a few touch-ups like a new kitchen, talk with your mortgage broker to see if it is possible to add a renovation loan into your mortgage.
Chosen the wrong real estate agent to help you.
The majority of Real Estate Agents in Edmonton and the surrounding area have access to the same MLS Data, but if there hasn't been anything which has caught your attention, you can either fire your agent and find one who will work harder for you, which may include knocking on doors in a specific area or making community phone calls to find you a suitable property. Or maybe you are just too picky.
There are many people who prefer to rent. Every month, they pay for someone else's mortgage, helping the homeowner build equity. Or you have signed a long lease and are not in a position to buy. Or you may have a reason for not purchasing yet. If this is the case, stop looking until you are really ready. Every time you view a home, the seller must vacate the premises which means more cleaning and making arrangement to remove children and pets.
You are TOO cheap.
What the asking price of a home is, is irrelevant to the purchase price. For example: if two identical homes are listed at $400,000 and the other at $375,000 and you are still "Low Balling" the less expensive one, you will never get a good price. A good real estate agent will complete a buyers CMA for you, which will indicate a fair value market price and if it is below, you've already made money.
BEST REAL ESTATE TIP: No matter what type of market we are in, the longer you postpone your purchase, the more money you will lose. Eventually, house prices will go back up in Edmonton, but so will interest rates!
EXTRA HOME COSTS FOR BUYERS
Are you ready to purchase your new home? Often, buyers find themselves overwhelmed with the cost of purchasing a home and should be aware of these extra home costs to ensure you won't be struggling at the last moment to find more cash to complete your purchase.
When a home is sold, the buyer incurs various closing costs in addition to the property sale price. Although most of the expenses of the house are paid for by the seller, usually including real estate commissions, the buyers pay a variety of fees such as mortgage origination charges, appraisal fees, title insurance, lawyer, home insurance, homeowner association fees (HOA) and property tax adjustments. Depending on the buyer and the home purchased, there may be additional fees including CHMC Fees, which can be added to your mortgage amount and other costs. agreed upon and not covered by the seller costs.
Don't forget your moving and utility hook-up costs. As a rule of thumb, one to two per cent of the cost of your home will cover all closing costs. Learn more about how to buy a home in Edmonton.
If you would like to know more about purchasing a home, contact one of our Edmonton Real Estate experts today for help and free advise.
Come in, Welcome to our Open House!
Open houses are great for the listing real estate agents because it gives us an opportunity to meet the neighbours who may be thinking about selling their home and to pick up new buyers.
When real estate agents host an open house, the ultimate goal is to sell the home. The real estate agent who is hosting the open house is representing the seller, has already spent time and money and anyone who walks through the door needs to understand, the agent will be asking you questions.
If you are only looking for decorating ideas or you are already under a Buyer's Brokerage Agreement, let the hosting real estate agent know. We have Rules, Regulations and a code of Ethics, whereof, we are not allowed to interfere with another REALTORS® Clients. However, if you are not currently working with a real estate agent, REALTORS® are always looking for new business.
If you are interested in the property and would like more information on the home, call your current agent - DO NOT tell the listing agent. Anything you tell the hosting real estate agent will be disclosed to the sellers and in the event, you write an offer on this property, information can be used against you in negotiations. It is our job to work in the best interest of our clients which would include informing the sellers of all interested parties.
Real Estate Agents are also responsible for ensuring the proper care of the home while showing. If you have children, please hold their hands and don't be offended if the REALTOR® is following you everywhere.
If you are just starting your new home search and have questions or would like a real estate buyer representative to help you through the process (for free), contact us.
How to use a Comparative Market Analysis
Edmonton real estate agents can provide a comparative market analysis, also known as a CMA, for any property including properties subject to divorce, civil enforcement, foreclosures, estate sales, city tax purposes, etc. It takes time for real estate agents to complete an accurate home evaluation. Unless you have plenty of experience in buying and selling real estate, online home evaluations may be completely misleading and should never be used as a realistic asking price.
Seller Comparative Market Analysis
When working with sellers, a comparative market analysis is used to determine a realistic and accurate asking price. A Seller CMA is based on comparable properties which are currently active (homes for sale), recently sold homes (usually within the last six months), expired (homes which did not sell for various reasons) and the history of these homes. Other factors will include the current Edmonton real estate market, supply and demand, the condition of the property, the location, community absorption rate and many other factors. An experienced, professional Edmonton Realtor will take the time to go through all of this data with you, together determining a true asking price for your Edmonton Home.
Buyer Comparative Market Analysis
When working with buyers, a comparative market analysis is similar to a bank appraisal and is used to write a reasonable offer to purchase. A buyers CMA is based on both current homes for sale and recently sold home price in Edmonton taking into consideration all relevant factors including the condition, size and location. For new builds, this process is a bit different and is based more on the cost to build, economic factors, building quality, and the reputation of the builder.
Free Comparative Market Analysis
If you are thinking about selling your home or if your home did not sell due to other factors, feel free to contact us for a professional no-obligation Edmonton home evaluation. We also service Morinville, Bon Accord, Gibbons, St. Albert, Spruce Grove, Beaumont and Devon. Our Homes & Gardens Real Estate Agents will take the time to help, educate and inform you on all real estate aspects of your community to determine the right value for your home, ensuring you receive the highest possible price. Simply CLICK HERE to fill in the form and we will get in touch with you shortly.
Understanding Buyers Brokerage Agreements
Buyer Brokerage Agreements have been around for several years, and only recently has been mandated for real estate agents to have buyers under the agreement when working in a "client status". This legal change created security for both consumers and real estates in Edmonton and throughout Alberta. This form states the responsibilities of both the buyer and their real estate agent including:
- The mandated Fiduciary Duties, to protect interests of the buyer
- The buyer cannot hire more than one broker or real estate agent to represent them
- The term of the agreement. Depending on the real estate market and how long the real estate agent chooses to work with a buyer, this agreement is normally 30 Days to 1 year and allows enough time for the buyer to purchase a home. If the buyer has not purchased a home during the time frame, they may extend the agreement or sign with another agent.
- The retainer fee (normally $1000 - $2500) which is held in trust by the real estate agent/broker and forms part of the buyers down payment.
- Remuneration is stated in the agreement and can not be changed without written consent from all parties. This protects the agents' commissions and allows the buyer to know how much the REALTOR receives for their services. (usually paid for by the sellers real estate agent)
- While under the agreement, If the buyer elects to purchase a property without the help of their real estate agent, they will owe the agency the commission set out as per their Buyers Brokerage Agreement.
- This agreement also lays out the obligations and duties of the real estate agent ensuring the agency is working in the buyers best interest. Some of these obligations may include
- Showing you all properties you may be interested in as soon as possible
- The duration of the agreement
- Advertising for properties which meet your search criteria
- Pulling titles to ensure closing capacity
- Setting you up on Auto-prospecting.
- Fiduciary Duties of the real estate agent
- Explaining and helping to prepare the offers to purchase
- Negotiate favourable terms for the buyer
- Provide a Buyers CMA to ensure you are not overpaying
- Inform you on all aspects of your offers including any counters
- Assist you with a chose of mortgage brokers, inspectors, lawyers, etc
- Any other relevant services you may require
For more information on working under a Buyers Brokerage Agreement, feel free to contact us.
Do you really need a property inspection when purchasing a home in Edmonton?
A real estate property home inspection is an objective visual examination of the physical structure and systems of a house, from the roof to the foundation. It is for the sole benefit of the purchaser and is usually subcontracted to a certified licensed residential real estate inspector, paid for by the buyer and can take one to four hours depending on the size and condition of the property. At the end of your inspection, a standard home inspector’s report will be supplied covering the condition of the home.
A home inspection can identify the need for major repairs or builder oversights which can lead to unpleasant surprises and unexpected difficulties in the future. Buying a home can be the largest single investment you will make and spending a few hundred dollars for peace of mind is money well spent.
Home inspection components covered include:
- heating system including furnace and hot water tank
- central air conditioning system
- carbon monoxide and fire alarm detectors
- interior plumbing using both visual and water residue tools
- mold issues and water damage
- electrical systems
- the roof & attic
- visible insulation of walls, ceilings, floors, windows and doors using a thermal ray tool
- foundation & basement
- other structural components which may need major repair or replacement.
Depending on your chosen property inspector, there may be some things that will not be inspected such as things which can not be seen visually and appliances. You may want to check that these chattels are in working order.
If a home inspection is not allowed on a bank foreclosure, it is still a good idea to have one done, prior to putting in an offer.
In Alberta, builders must supply a new home warranty at closing, however, new homes should ALWAYS have a home inspection done. Building a house takes time and there are always things that get missed. It is easier to address these concerns before you remove your inspection condition.
What if the report reveals problems? No house is perfect. If the inspector identifies problems, it doesn’t mean you should or shouldn’t buy the house. Talk it over with your real estate agent. There are a few options to address any concerns you have.
What is a Real Estate Absorption Rate?
During listing appointment and the CMA process, sellers often ask "How long will it take to sell my house?" Although there is no magic way of knowing the answer, know what is currently happening economically and using a real estate absorption rate here in Edmonton will give us a good indication of how long a property will be on the market. An absorption rate will also tell us if it is a buyers market or a seller's market and is often used by real estate investors. It can also give a prediction on the demand of an Edmonton community.
Knowing how to use and calculate absorption rates using this real estate tool has several benefits. It's the best thing next to a crystal ball. An absorption rate It is a rate at which homes sell in a given area during a given time period. Absorption rate is calculated by dividing the number of sales in a given month by the number of available homes for sale. It is the inverse of months of supply.
For example, if there are 100 houses listed for sale in a certain area, and 10 houses sold over the last month, the absorption rate is 10/100=10%. Which means, assuming no other house listing are put on the market, it would take 10 months for buyers to purchase enough properties to absorb the real estate demand.
As a rule of thumb, an absorption rate of 20-25% or higher means that homes are selling quickly and the market favors sellers. Lower absorption rates mean that homes are not selling quickly and supply is much greater than demand, favoring buyers.
If you are thinking about selling in Edmonton or the surrounding area and would like to know the absorption rate in your community, contact us.
Questions to Ask a Buyers Real Estate Agent
Below is a great question list for all Edmonton new home buyers. Purchasing a home is one of the largest investments you will make in your lifetime. Choose your REALTOR carefully. Don't be afraid to ask questions.
What type of properties do you mostly sell?
- Purchasing a single-family detached house is different than buying a condominium, new builds or luxury properties. It is important that the Edmonton Real Estate Agent you choose has in-depth knowledge of the type of property you are planning on purchasing.
What is your negotiation style and experience in multiple offer situations?
- Even in a buyers market, you may be in a multiple offer situation and great negotiating agents have personalized techniques for winning bidding wars. Some agents can be too aggressive and will lose due to their unlikeability, other agents can be too passive. Choose a real estate agent who is creative and on your side.
How many homes did you sell last year?
- This is a very important question. The average real estate agent in Edmonton sells about 8 properties a year. Some agents will sell over 100 properties per year. If you want a REALTOR® who will spend time with you, is knowledgeable and experience, choosing a real estate agent who sells 25-50 homes a year is your best bet.
Do you have other professionals you work with on a regular basis?
- Again, another very important question. Agents have relationships with other real estate providers and depending on how this question is answered, it will give you an insight on how long they have been in real estate, but more importantly on how they conduct their business.
Are you a full-time real estate agent?
- Not all Real Estate Agents are full-time REALTORS®. You don’t want someone doing this part-time or as a hobby. Looking at properties for fun is not the same as having fun when looking at homes. When viewing homes, great Edmonton real estate agents will point out the flaws of each home and they all have them, not commenting on how pretty the bedroom is set up.
Do you normally work in my price range?
- Most Edmonton real estate agents work a wide range of prices, but if they usually help home buyers purchase million-dollar homes, you might not be a top priority. Similarly, if you want to purchase new build homes and they normally work on older properties, the agent may not have the right connections for Edmonton home builders.
Will I be required to sign a buyers brokerage agreement?
- If any Edmonton Real Estate Agents answers "No", find another REALTOR®. The Canadian Real Estate of Alberta has mandated to work with all residential buyers under an agreement. There are 2 types of agreements - Exclusive & Non-Exclusive.
Do I have to work with your recommended service providers?
- If the agents say “yes”, it’s illegal. Find another REALTOR®. Good real estate agents in Edmonton should have solid recommendations for other service providers, but you should never feel pressured to use their recommendation. A good agent doesn’t do everything on their own. They have a team of other professionals including mortgage brokers, home inspector, contractors, Conveyancers, real estate lawyers, etc.
Can I review all documents before I sign them?
- A good real estate agent will take the time to explain the documents and provide you with ample time to review important documents. Never feel pressured into signing. Real Estate Contracts are a binding agreement and it is important you understand them thoroughly prior to signing.
Do you use e-signature or DocuSign?
- An e-signature is an electronic signature and gives you an indication of how internet-savvy the real estate agent is. the electronic signature also eliminates the need to print, fax, scan, and ship documents and are time documented. During this conversation, your agent will also mention auto-prospecting, which is a system to keep you updated the moment a new home which meets your criteria arrives on the Edmonton or surrounding area market.
How long have you been a licensed real estate agent?
- This question is one that cannot be missed. Experience in the real estate industry is important. The longer a real estate agent has been selling real estate, the more transactions they have likely completed.
Do you attend the inspections?
- Inspections are a contingency or buyers condition when purchasing a home. If any real estate agents in Edmonton or the surrounding area, tells you don't really need one, find another REALTOR®. You may think an inspection for a condominium or a brand new property is a waste of time and money, but have an inspection can save you thousands of future dollars and find unforeseen issues. New Home warranties have limitations.
How will I know how much to offer when I find a home?
- Listen carefully to how the real estate agent answers this. If the REALTOR® pulls title and does a buyer's Comparative Market Analysis or CMA, congratulations, you have found yourself a great Buyers Real Estate Agent.
Feel free to contact us if you have any questions or need help with purchasing your dream home.
The first step to buying a home is deciding if you are ready to become a homeowner and start building equity for your future. There is a lot to know when it comes to buying a home in Edmonton. Whether you are buying your first condo, moving to a bigger house or downsizing, our in-depth 5 step home buyers Guide will take you through all the steps.
- First: Get pre-qualified for a mortgage and choose a financial lender
- Second: Choose the best Buyers Agent or Edmonton
- Third: House hunt like a real estate professional online and in person
- Submit an offer with confidence by understanding Alberta Real Estate contracts
- Fifth: Be prepared for other costs associated with buying a home in Alberta
STEP 1: Financing - Pre-approval and choosing a financial lender
Not all financial institutions are the same. If you choose to use a who works at your personal branch, keep in mind, most persons who work in a bank get paid by the hour, unlike a mobile mortgage specialist who only gets paid when they have completed, processed and get your mortgage application approved. For a list of mortgage brokers, contact us.
The first step to buying a house or condo in Edmonton is finding out how much your bank is willing to lend you based on the lenders' rules. Keep in mind with the change of Canada's new mortgage qualifying rules. You must qualify at two per cent higher than what your current interest rate will be.
Your lender will look at your income, your debts, your down payment and your credit rating. Having a verbal or online pre-approval is a waste of time and is not a real pre-approval. Your lender/Mortgage Broker will ask for a list of items to be provided including a recent bank statement, pay stubs, job letter, last 2 years of T4's for a true pre-approval.
A mortgage pre-approval will be in writing which is normally valid for 90 or 120 days. Pre-approvals will also include an interest rate guarantee - get this in writing from your lender to ensure you have documentation in the event interest rates rise prior to purchasing your new Edmonton home.
LEARN MORE ABOUT MORTGAGES
Our Edmonton Real Estate Agent Team is here to help you. We have several mortgage brokers we deal, feel free to reach out and ask us for a list of mortgage specialists.
STEP 2: Choosing the Right Buyers Agent
If you are like most people, you want to find a Realtor who is a good fit. Both real estate agents and Realtors have had to undergo a certain amount of training in order to qualify to help you buy or sell real estate. However, in Canada, in order to be considered a Realtor, a real estate professional must be a member of the Canadian Real Estate Association (CREA). There are several Realtors in Edmonton who choose not to work with buyers, while others choose to work solely with buyers. These Realtors are known as Buyer Agents.
There are several ways to find a buyers agent who will be a good fit. Most Realtors in Edmonton have their own websites. Some of these websites are very generic, while others provide personalized extensive real estate information. Some Realtors will also specialize in a specific part of Edmonton or have a real estates specialty such as condominiums, luxury homes, relocation moves or acreages. Another great way to find a buyer's agent is to visit open houses. However, if you fall in love with the house, it is in your best interest to seek out a different agent.
Interview a few different Realtors before signing a commitment called a "Buyer Brokerage Agreement". Remember this agent will be helping you make the biggest investment of your life and you should make sure they have your best interests in mind. Below is a list of questions which may help in the interview process when buying.
- How long have you been a REALTOR?
- Do you have any other real estate designations?
- How much commission do you charge?
- Will you show properties that are at a lesser commission offered?
- How will you keep me informed on new properties which meet my search criteria?
- What is your real estate niche or specialty?
- Do you have a list of references I can contact?
- How many homes are you willing to show me (If this number is less than ten - move on to another agent)
- If I cancel my agreement, is there a fee?
- When are you available to show me homes (Note* Part-time Realtors may not be able to accommodate your schedule)
To book an appointment for your personalized Edmonton home buying consultation, contact us.
STEP 3: House Hunting like a Real Estate Professional
Let's face it. You have been house shopping for your home online and have seen a few "bad real estate photos", or a property with no photos or wonder why a particular house has been on the market so long. The reality is, there may be great homes, but the sellers chose the wrong agent to market their home.
When you come across those bad real estate photos, try to look beyond the photographer, the horrific lighting and the messy house with clothes on the floor, pets or worse yet, the seller's children in those photos. If the selling agent has not taken the time to properly market a home, the sellers are not happy and want their home to be sold.
When there is only one exterior photo on a property, read the comment section. Odds are, this home is tenant occupied, or not in show-able condition (Very messy) or the sellers have chosen really ugly paint colors for the walls. These homes are usually fantastically priced properties that need a little TLC and some cleaning. If you are looking for a home in a particular area, learn to calculate the absorption rate to make the best financial purchase and make a great real estate deal.
Don't be fooled by pretty homes. Both a Seller and the Sellers Realtor want as many potential buyers into their home, but don't be fooled by how lovely it looks inside with that sparkling granite counter-top, cutest little girls rooms or awesome man cave. Take a deep look at the finishing. This is the best indicator for how well the home has been built and taken care of. A great buyers agent will point out imperfections they notice.
Don't overlook homes which have been on the market for a while. These properties may have had several price adjustments, especially in Edmonton's real estate market and may now be below or at the proper market value. Take a second look. There may also be other reasons which factor in a long time on the market which can include the property was "tied up" a few times with other offers which have fallen apart on financing or an inspection. Remember, when a pending offer is on a home, it can be conditional for a few weeks at a time. Another reason, a property may be longer on the market could be due to a "lis pendens", probate, civil enforcement or other government enforcement contingencies.
STEP 4: Submitting the Offer
Normally there are two basic (three when purchasing a condominium or more with rural properties and acreages) conditions or "subject to's" when purchasing a home in Edmonton.
- Financing: Although you have completed your pre-approval, this does not mean you have been qualified to purchase that dream home. Once an offer has been accepted, your financial institution will need to submit your offer to the underwriter and your credit will be checked again. Do not go out and purchase any major items which would require financing such as a new vehicle during this time frame. If you are obtaining a CHMC Mortgage, the credit check will be done for a minimum of the last seven years.
- Inspection: Hire a certified residential property inspector with a good reputation and credentials. The cost in Edmonton for a certified residential home inspector usually costs between five to six hundred dollars. No matter what type of home you are buying, including foreclosed properties to new builds. This small fee can save you thousands of future dollars.
- Condominium Documents (Condo purchases): Always double check you have received all condominium documents and review them. If you do not understand the legality or do not have the time, have your real estate lawyer review them for you. There is a lot of information in the condominium documents and you do not want to be surprised with a $30,000 special assessment when you move in.
- Rural and Acreage: Septic inspections are beyond the scope of a standard home inspection but when purchasing an acreage in Alberta, they are crucial. Other conditions you should add to your rural purchase agreement include a satisfactory water well, water flow, water quality tests and pumping equipment inspections
STEP 5: Buyer Beware & Other Closing Costs
Calculating the cost to purchase a home in Edmonton is pretty simple. Calculate your total down payment plus add one and a half per cent of the total purchase price of your home. For example on a $300,000 home, with a five per cent down payment, you will need a total of $19,500. Your financial institution will ask to see this additional amount to ensure you have enough money for closing costs such as lawyer fees, title transfers, mortgage application, and appraisal fees. Additional mortgage fees like CHMC can be added into your mortgage or can be paid up front.
If you have added certain terms into your purchase agreement, such as "Seller to repair a broken window, steam clean carpets, remove dog feces from the backyard, etc, you may also want to add an additional clause
"Seller will allow the purchasers to complete a satisfactory walk-through regarding the terms of the property prior to possession"
In Alberta, the transfer of real estate titles is processed a bit different than other provinces and keys do not get released until monies have been received by the Sellers lawyer. In the event and terms were not completed, it is more difficult for remediation this after.
Note* If you are purchasing a foreclosure, keep in mind, that this property is sold "As Is, Where Is".
If you have any other real estate question about purchasing a home in Edmonton or the surrounding area, contact us by email.
How to Avoid Paying Too Much for a House
Before you offer any seller a price for a property, there are a few facts you should to know. The asking price of a property does not necessarily reflect the "market value" of the home.
Below are a few questions you should check into prior to making an offer.
Is the property tax assessment accurate? If not, find out why
For the city of Edmonton, you can find out the tax assessment value of any residential property at https://maps.edmonton.ca/map.aspx. Although the amount the city thinks the property is worth does not necessarily reflect the true value. It is only used as a starting point.
Are real estate prices going up or coming down?
What is the latest real estate trend in that community? To determine if an Edmonton neighborhood's property values are going down or to tell if it is becoming one of Edmonton's hot spots, use the absorption rate tool.
How much was the bank property appraisal?
Financial institutions base their appraisals on the "Emily System", which is an accumulation of recently sold comparable properties. If there are no relevant sold Edmonton properties or if your home is more unique, independent appraisers can do a "cost to replace" appraisal. A good Edmonton real estate agent will complete a "Sold Comparative Market Analysis", (CMA) for you, prior to submitting an offer to purchase.
Is the property staged to avoid any defects?
Don't be fooled by the staging in a property. This is one of the biggest mistakes a buyer can make. When viewing a home, overlook the nice furniture and freshly painted walls. Take a close look at the overall condition of the property. An easy way to know if a dwelling is shifting is to open and close the windows and doors.
Do you know what a realistic offer should look like?
No matter if you are buying a home in Edmonton in a buyers market or a seller's market. Submitting a realistic offer is important. When a home is priced accordingly to the real estate market, don't try to "low ball" the seller, you will end up paying more because you have insulted them. Do your research.
For more information on submitting real estate offers in Edmonton and find an experienced buyer's agent, contact an Edmonton Homes & Gardens Real Estate Agent.
What is the difference between a garage suite and a garden suite?
The official city description a garage suite is "a self-contained accessory dwelling above or attached to a rear detached garage, on a single detached lot which usually comes in the form of apartment-sized living space, with its own kitchen, bathroom, and living space, on the second floor of your garage".
The city description of a garden suite is "an at-grade self-contained, accessory dwelling located in a building that is physically separate from the principal dwelling." Typically, garden suites are single-story structures built in the backyards of single detached homes and must have their own kitchen, bathroom, and living space.
There are several benefits of purchasing a house with a garage or garden suite or building on an existing house in Edmonton including ...
- Garage and garden suites are great ways to add some rental income to your property to help pay down your mortgage. It eliminates the shared interior space the way you would with a basement suite. These smaller living spaces are also a great way to add some diversity to your community because they allow different demographic access to housing options on your street.
- Garage and garden suites can keep family members nearby, yet allows for more personal space. It can be a great option for keeping your parents or your children close, while still maintaining some privacy by ensuring everyone has their own space. Alternatively, some ageing empty nesters have decided to downsize into their own garden or garage suite, and allow their children’s family to live nearby, in the main house.
- As with any good infill project, it is all about creating more flexible living options so every Edmontonian can choose the neighbourhood that suits them best. For more information on Garage and Garden suites, visit the city of Edmonton's Infill website.
Real Estate Agent Fiduciary Duties
Real Estate Agents in Edmonton and the province of Alberta who is in an agency capacity for buyer or seller clients have duties mandated by the legal system called fiduciary duties. The position of the REALTOR® is a fiduciary capacity, acting in the best interests of the client.
- Obedience: Your real estate agent must obey your instructions as long as it is legal and in accordance with your brokerage agreement.
- Loyalty: Your real estate agent must be loyal and keep your best interests ahead of those of any other party, including themselves.
- Disclosure: In the province of Alberta, the law requires real estate agents, whether in an "agency" capacity or not, to disclose material facts to their client. Material facts are those that, if known by the buyer or seller, might have caused them to change their purchase or sale actions. In a signed agency agreement, your real estate agent must disclose more than the material facts. They must disclose all known or suspected information regarding the purchase of the property.
- Confidentiality: A real estate agents fiduciary duty of confidentiality means that nothing learned about you can be disclosed including your business, financial, personal affairs or motivations. This confidentiality fiduciary duty must be maintained for eternity.
- Accounting: Your real estate agent is accountable for all documents and funds in the transaction. Accurate reporting of the whereabouts of all monies pertaining to the transaction and the ultimate disposition. All documents are to be kept for at least six years.
- Reasonable Care: The words "reasonable care" are only finally fully defined in many cases by a judge or jury when it's too late to change your actions. Most Edmonton Real Estate Agents, as a rule of thumb, go by the ethics code "What we know, you know" when acting in an agency relationship.