5 Steps to a Successful Real Estate buy
You have decided that it is time to get into the PEI real estate market. You’re excited and you want to find that house and get moved in right away. Let’s keep up up for just a minute and make sure that you are prepared, and that you know the basic steps to home buying on PEI.
1. Get you financial house in order
The first step to getting your financial house in order is to determine if you are in a position to get a mortgage. Start by ordering your credit report. It will show if you have any financial problems including liens, unresolved payment disputes etc. You will need to resolve any noticeable issues and have these removed from your credit report. In addition your credit report will show your credit score which is a proprietary system of assigning a number between 300 and 900 to indicate your credit worthiness. clearly the higher the number the better risk you are. You should know that better credit risks are usually allowed to carry a higher debt load, earn a better interest rate and of course will find it easier to be approved for a mortgage.
Secondly you have to determine how much PEI real estate you can provide. You should approach several lenders and seek a pre-approved mortgage. In this way you will know that you have a mortgage obtainable for the next 90 days and what price range you should be looking. You should try both edges and mortgage brokers to see who will give you the best rate.
2. Determine what you are looking for
Once you have a budget you can begin the search – right? Well not exactly! You should take the time to write a list of those features your next house must have and another of those features you would like the house to have if you can get them in your price range. You need to know the area that you want to look in and on PEI this method deciding between rural and city living. Many locating to PEI may not understand the implications of rural living as they often have not spent a winter here so this should be considered too. However once you have made your lists and put your finances in place it is now time to see a realtor and start the search seriously.
3. Working with a Realtor
Your first decision when choosing how to work with realtors is to determine if you are looking to contract a buyer’s agent. A buyer’s agent will work for you while some people feel more comfortable not to have their own agent and to work with the listing agent. While there are rules of conduct and the listing agent has to treat you honestly and fairly, it should be understood that their first duty is to their client, the vendor, and not to you. For this reason I believe that having your own PEI real estate agent is advantageous and most importantly it isn’t going to cost you – his/her commission will be paid by the vendor as a divided between listing and selling agents. In functional terms this method that the listing agent shares half the commission with your agent. Many PEI real estate sales include two agents in this way. If you are working with your own realtor then you need to meet with him/her and discuss your needs and wants based on your lists. If you are working alone then you will need to hit the local real estate guide and the internet and begin to search yourself using the lists you have made as search parameters.
4. Negotiation & Offer
Once you have found the “ideal home” it is time to make an offer. Choosing just the right amount and best terms to offer is a skill. Often home purchases are won or lost on the opening bid and it isn’t always about money but rather terms, such as closing dates, and some people get hung-up on the inclusion of certain items such as appliances or drapes. If you have your own realtor he/she will help you determine fair market value and write your offer. The way fair market value is usually determined is based on comparable sales to be found in that neighbourhood over the last 6 months for homes and similarities that are similar enough to compare. Generally an offer around or just slightly below the average of comparables will be seriously considered in addition as closing date, inclusions, and subjects. Subject might include “unprotected to selling your present home”, “unprotected to IRAC approval” (necessary if you are a non-resident) and can include “unprotected to appropriate financing” but shouldn’t in your case as you already have your mortgage financing in place and that makes your offer stronger already. The vendor can accept your offer, counter offer or ignore your offer.
Closing and conveyancing is the time of action of legal work including land title move, working out pro-rated items such as character taxes, oil left in the tank etc. It is the time of action of making your offer reality and the move of title and funds. You will need a PEI lawyer to carry out this very important function. At this stage the final work on your mortgage will be completed too. Shortly thereafter, everything signed and sealed, you will be the proud owner of your new home and ready to move it.