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DreamScape Realty
“Turning dreams into reality”
Is Pleased to Present
An Information Seminar
For Home Buyers
Welcome!!
Here is an outline of what we will quickly cover in
this seminar.
➣ The Decision, should you Buy or Rent?
➣ Use a REALTOR® or buy “For Sale By Owner”?
➣ Choosing a REALTOR®
➣ Agency
➣ Qualifying & Financing
➣ New Home or Pre-owned?
➣ House or Condo?
➣
Style - bungalow, bi-level, two storey, split etc.?
➣
Location?
➣
The Search
➣
You’ve Found It!! The Offer & Negotiation
➣
A Home Inspection?
➣
Legalities
➣
Conclusion
Now, on with the show!!
The Decision, Buy or Rent?
Should you purchase a home, or should
you rent? Let’s look at the two options.
Rent vs. Buy
➣
Renting may be less expensive to start
➛
➛
➣
Damage deposit is generally less than down payment
Rent may be less than mortgage payment for a short
time.
Buying is likely cheaper over the long term
➛
➛
➛
Rent tends to rise with inflation.
Mortgage payment remains constant (subject to
interest rates) because the cost is locked in for a given
amount of debt.
Because of this, rent will very likely be higher than
mortgage payments in a few years.
➣
Equity = Value of Home
minus amount owed on
property.
➣
Buying builds equity
➛
➛
➣
➣
As prices rise, so does
equity.
As the mortgage is paid
down, equity increases.
Renting does not build
equity and costs continue
to rise.
Buying builds equity and
controls long tem costs
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
Yr. 1 Yr. 5 Yr.
10
Yr.
15
Rent
Yr.
20
Yr.
25
Mortgage
Yr.
30
Yr.
35
Average Calgary Residential Sale Price
1975 to 2010
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
1975 1979 1983 1987 1991 1995 1999 2003 2007
Avg. Increase/Decrease in the last 40 Years
+ 7.98%
Avg. Increase/Decrease in the last 30 Years
+ 5.46%
Avg. Increase/Decrease in the last 25 Years
+ 6.89%
Avg. Increase/Decrease in the last 20 Years
+ 6.18%
Avg. Increase/Decrease in the last 15 Years
+ 8.01%
Avg. Increase/Decrease in the last 10 Years
+ 9.02%
Avg. Increase/Decrease in the last 5 Years
+ 10.68%
Please note that there are no guarantees. All we can do is base our
assumptions on the historical numbers .
A Rent vs. Buy Scenario
Let’s assume John has $20,000 and he is paying $1,500/month rent, plus utilities.
He can’t decide whether to continue renting and invest his money, or buy a house.
If John buys a home for $350,000 and uses his $20,000 as a down payment, his
mortgage will be $340,725 (including mortgage insurance, more on this later). At
an interest rate of 5.0% and a 30 year amortization, this will make his mortgage
payment $1,825 / month plus taxes, say $175 / month (estimated) which is a total of
$2,000 / month. This payment will remain basically stable (subject to interest
rates) until the mortgage is paid in full.
After five years, with inflation (4%), the home is worth $425,825. The mortgage
has only been paid down to about $320,282. This means that he has $105,543 in
equity. John has paid $120,000 in mortgage payments. Subtract the $97,490 rent
payments (assuming 4% per year rent increases) and he has paid $22,510 more in
mortgage than he would have in rent. Subtract that amount from the $105,543 in
his equity and he has a net increase of $83,033. Capital gains on a personal
residence are not taxable.
If John decides to continue renting and invests the $20,000 at 8% interest,
after five years he will have $29,387 which is a $9,387 profit. This profit,
however is taxable so even at a nominal rate of 15% tax he ends up with a
net gain of about $7,979.
The long term outlook is even more dramatic, if all the assumptions above
are used as average figures for the next 30 years. At the end of 30 years, if
John buys the house, he will have over $1,135,000 (future value of the
home at 4% inflation for 30 years) in equity and since the house will be
paid off, there will be no mortgage payments left to pay.
If he rents, in less than ten years, his rent will be as high as the mortgage
payment. Because rent will continue to rise, in 30 years his rent will have
climbed to over $4,800 per month and he will still be paying rent. His
$20,000 will have grown to less than $296,000 before deducting taxes.
What do you think John should do?
REALTOR®
or
“For Sale By Owner”?
A Brief Discussion
Realtor or “FSBO”
➣
The Choice is Yours.
➣
Knowledge & Experience
➛ Since the seller pays the commissions, (from the proceeds
of the sale) it does not cost you more to have the services
of a REALTOR®.
➛ Most “FSBO” sellers have had market evaluations done
and are trying to save the REALTOR® cost for
themselves, not for the Buyer.
➛
➛
REALTORS® have vast resources with which to analyze
a property.
REALTORS® probably see more properties in a month
than most buyers will in five years. They can suggest
what to look for and suggest clauses in the contract to
protect the buyer.
Why use a REALTOR®?
Not all licensed or registered brokers and salespeople are REALTORS®.
Only real estate licensees who are members of the Canadian Real Estate
Association (CREA) are REALTORS®. These REALTORS® are
committed to a high standard of professional conduct, ongoing education,
and to a strict Code of Ethics and Standards of Business Practice. Using the
service of a professional REALTOR® helps in disclosing maximum
property information and facts therefore reducing your risk.
Your Benefit
 Teaming up with a REALTOR® provides you with invaluable access to
professional real estate expertise and knowledge. You benefit because:
 Your REALTOR® can help determine your buying power and refer you to
lenders best qualified to maximize your loan and minimize your cost.
 Your REALTOR® has full access to all the features of the Multiple Listing
Service®, Canada's most powerful real estate marketing network.
 Your REALTOR® provides local community information on utilities,
zoning, schools, etc. REALTORS® assist you in making the best choice
selecting an environment where you and your family can grow.








Your REALTOR® has a finger on the pulse of the housing market and is
knowledgeable about developments and trends in real estate; and,
Your REALTOR® has the facts on comparable pricing, neighborhood trends and
housing market conditions, data you can use to set your best course of action and
maximize your homes resale value when you are ready to sell.
Your REALTOR® can negotiate the best deal. There are myriad negotiating factors,
including price, financing, terms, date of possession and often the inclusion or
exclusion of repairs, furnishings or equipment. By negotiation alone, your
REALTOR® often saves you more than the cost of their service.
Your REALTOR® assists you in providing due diligence to evaluate the property.
This may include inspections for mold, dry rot, asbestos, faulty structure, roof
condition, septic tank and well tests, just to name a few. Your REALTOR® can
assist you in determining what conditions to recommend and assist in finding
qualified professionals to investigate and provide report to you.
Your REALTOR® can guide you through the sales process making sure everything
flows smoothly from initial offer to closing.
You are protected when you work with a REALTOR® for a number of reasons:
All REALTORS® are graduates of a real estate education program and are
committed to pursuing ongoing professional development courses;
REALTORS® must adhere to a strict Code of Ethics and Standards of Business
Practice; your guarantee of professional conduct and service excellence.



All REALTORS® carry errors and omissions insurance;
The Real Estate Assurance Fund is available to you in the rare event of fraud, or
breach of trust by a REALTOR®. It is your protection against financial loss. This
fund is financially supported by our members; and,
A licensed brokerage supervises the business conduct of all REALTORS® to ensure
their compliance with Alberta law.
Why the registered “®” after the word REALTOR®?
Only REALTORS®, who are members of the Canadian Real Estate Association and
a local real estate board, can call themselves REALTORS®. Calgary Real Estate
Board members adhere to a strict Code of Ethics and Standards of Business
Practice, that non-board members and independent listing companies do not.
REALTORS® take mandatory education every two years to ensure that they are
knowledgeable in every aspect of the ever changing real estate industry.
Above content from the Calgary Real Estate Board.
Peace of Mind
The experience and advice of a good REALTOR® can be invaluable, and at
virtually no cost to the Buyer!
Choosing a
®
REALTOR
What should you look for in a REALTOR®?
Choosing a REALTOR®
There are several things to consider when choosing a REALTOR®. Here are a few.





First, and most importantly, choose a REALTOR® that you like, know and trust.
Without these things, the relationship is off to a rocky start at best.
If you like, don’t hesitate to ask for references.
Choose a REALTOR® that has experience with the type of home you plan to buy.
If you are looking at a condo for example, choose a REALTOR® that has condo
experience. If the REALTOR® you choose isn’t experienced, they should have
experienced back-up to call on for help.
Your REALTOR® should be available. He or she should answer your calls or at
least return your messages in a timely manner. Waiting several hours or even
days is not acceptable.
Find a REALTOR® that will be patient with you. One that will show you as
many homes as you want until you find the right one. And, answer all your
questions. One that will take as much time as it takes to get it right. This is a big
decision and investment for you. Get it right.
Agency
What is Agency?
Types of Agency
Sole Agency
Sole Agency occurs when one Brokerage represents the Seller as the Seller’s Agent
and another Brokerage represents the Buyer as the Buyer’s Agent.
Transaction Brokerage
Transaction brokerage occurs when one or more industry members in the same
common law brokerage, or the same designated agent from a designated agency
brokerage, represent both the buyer and seller in the same real estate transaction.
Transaction brokerage is permitted with the fully informed, voluntary and timely
consent of both parties to the transaction. The industry member must obtain your
written informed consent to transaction brokerage before this relationship may occur
and before any offer is presented to buy or sell a property.
Agency Relationships
Agency is a relationship established when two parties agree to have one party act on
behalf of the other. If you decide to have a REALTOR® act on your behalf, the
agency relationship exists between you (the client) and the Agent (the Brokerage and
its REALTORS®, including the Broker, Associate Brokers and Associates).
When the Agency relationship exists, the REALTOR® owes you the following duties:
 Undivided Loyalty – the Agent must act solely in your best interests
 Confidentiality – the Agent must keep your confidences
 Full Disclosure – the Agent must inform you of all facts known to the
Agent that might affect your relationship or influence your decisions.
 Obedience – as long as your instructions are reasonable & legal
 Reasonable Care & Skill – the Agent must exercise reasonable care & skill
 Full Accounting – the Agent must account for all money and property
placed in their hands while acting for you.
Sole Agency
Sole agency is a relationship in which the brokerage or industry member
acts as the Agent for only one party in a trade. The essence of the agency
relationship is that the Agent has authority to represent the Client in a real
estate transaction. In sole agency, Agents are obligated to protect and
promote the interests of their clients.
Buyer’s Brokerage
Seller’s Brokerage
Buyers Agent
Seller’s Agent
Buyer(s)
Seller(s)
Transaction Brokerage
Transaction brokerage occurs when one or more industry members in the
same common law brokerage, or the same designated agent from a designated
agency brokerage, represent both the buyer and seller in the same real estate
transaction. Transaction brokerage is permitted with the fully informed,
voluntary and timely consent of both parties to the transaction.
Brokerage
Brokerage
One Broker or Agent
Buyer(s)
Seller(s)
Broker or Agent
Broker or Agent
Buyer(s)
Seller(s)
Transaction Brokerage Rules
In real estate sales, the Transaction Facilitator:
1 Will not, without prior written permission of the applicable Client, disclose to
the other Client:
a:
That the Seller will accept a price less than the asking
price (or a countered selling price)
b:
That the Buyer will pay a price higher than the price
offered, &
c:
The reason the Seller is selling and the Buyer is
buying.
d:
When representing multiple buyers, the terms and
conditions of competing offers.
e:
Personal information relating to the Buyer or the Seller.
2 Will disclose to both parties all facts known to the Transaction Facilitator that
materially affect or may materially affect the marketability or value of the
property.
Customer Status (Non-Agency)
If you do not want to be in an agency relationship but want to work with a
brokerage, you should choose customer status. The Brokerage is not your Agent
and does not owe agency duties to you. Duties are limited to honesty, limited care
and skill and not negligently or knowingly providing you with false or misleading
information. The Brokerage might recommend Customer Status when a conflict
of interest will affect its ability to fulfill agency duties to you.
If a brokerage recommends Customer Status but you would prefer to have an
agency relationship, you should opt to work with another Brokerage.
Every Broker or Agent must have each Client sign an “Agency Disclosure
Acknowledgement”.
This Acknowledgement does NOT tie you to the
REALTOR®.
It simply acknowledges that you understand the Agency
relationship.
If the transaction is a “Transaction Brokerage” situation, both Buyer and Seller
will be asked to sign an “Transaction Brokerage Agreement” form.
Financing
Qualifying for, and financing your home
Qualifying
Qualifying Criteria Used by the Lenders
There are several things the lenders take into account when deciding
whether to finance a property. They are as follows:
1 Employment
a:
Stability (is the job permanent?)
b:
Longevity (length of time on the job).
2 Credit History (does the Buyer pay the bills on time?)
3 Value of Property
4 Gross Debt Service ratio (GDS)
5 Total Debt Service ratio (TDS)
GDS
➣
GDS is the calculation of how much of the Buyer’s total income may be
used for mortgage payments
➛ Most lenders allow 32% of the Buyer’s gross income.
➛ Costs for heat & taxes are deducted
➣
Example: Buyer’s gross annual income = $75,000
➛ $75,000 x 32% /12 = $2,000
➛ $2,000 - $150 (taxes) - $100 (heat) = $1,750
➣
Buyer is qualified, subject to a TDS calculation, to make mortgage
payments of $1,750 per month
➣
For example, an interest rate of 5.5% per year has a payment of
(approximately) $5.33 per thousand dollars of mortgage (assuming a 35
year amortization). This means this person could qualify for a mortgage
of $1,750 / $5.33 = 328.33 x $1000 = $328,330 based on the "GDS"
calculation. The maximum purchase price would be $328,330 plus the
down payment based on the GDS calculation.
TDS
➣
TDS is the calculation of how much of the Buyer’s total income may be
used for mortgage payments plus all other monthly debt payments.
➛ Most lenders allow 40% of the Buyer’s gross income.
➛ Heat, taxes and all other debt payments are deducted.
➣
Example: Buyer’s gross monthly income = $75,000
➛ $75,000 x 40% / 12 = $2,500
➛ $2,500 - $150 (taxes) - $100 (heat) = $2,250
➛ $2,250 - $100 (credit card) - $450 (loan) = $1,700
➣
Buyer is qualified using TDS calculation to make mortgage payments of
$1,700 per month.
➣
This means this person could qualify for a mortgage of $1,700 / $5.33 =
318.95 x $1000 = $318,950 based on the “TDS" calculation. The
maximum purchase price will be $318,950 plus the down payment.
Since the lenders use the smaller of the two calculations, the TDS calculation is
used and the total mortgage allowed is $318,950.
Price = Down Payment + Mortgage. Add the mortgage amount to the available
down payment and that is the maximum purchase price.
Mortgage Insurance
➣
Mortgage loans over 80% of the value of the property must have
Mortgage Insurance
➣
Mortgage Insurance is not life insurance. It is used to pay out the
financial institution in the event of foreclosure
➣
Two companies offer this insurance, CMHC and GE Capital
➣
Premium rates vary from 1.0% to 4.5% depending on the down
payment and other criteria
➣
Premiums are usually added to the mortgage amount.
Bank or Mortgage Broker?
This question depends on whether you have a relationship with your Bank. If you
do, that may be the best route for you to take. The Banks do a good job of lending
(it is their core business) and since they already know you it may make things
easier.
The advantage of a Mortgage Broker is they have a wider range of lenders to work
with. Where a Bank (Credit Union, other financial institution) has only their own
products, a Mortgage Broker has access to many lenders (some as many as 30 or
more) and sends your application to several lenders who then offer their best deal.
The Mortgage Broker finds the one that is best suited to your circumstances.
The choice is yours but whichever route you go, it is a good idea to get a mortgage
approved early. There are a couple advantages to doing this. First, when you find
your dream home, you are ready to act. Second, you lock in an interest rate,
usually for 90 days. If interest rates go up, you are protected; if they go down
you get the lower rate. Even if you aren’t quite ready to buy just yet, locking in
the rate can help, and it can be re-locked in again at any time.
Historical Mortgage Rate Chart
New or Used?
Advantages & Disadvantages
of
New & Used Homes
New Homes
➣
➣
Advantages
➛ Most new homes carry a warranty.
➛ If building new, a choice of colours and other options.
➛ Choice of lot in new subdivisions.
➛ Choice of floor plans.
➛ G.S.T. is usually payable. However there is usually a rebate which is
on a sliding scale, depending on the purchase price.
Disadvantages
➛ New home subdivisions are generally located some distance from
schools, shopping, transportation etc.
➛ Fencing, landscaping can be extra costs after possession.
➛ Noise and dirt while subdivision is completed.
➛ Difficulty selling while still competing with new home builders.
Realtors & New Homes
In most cases REALTORS® can work with Buyers for the purchase of a new
home.
 The Calgary Region Home Builders Association and the Calgary Real Estate Board
have signed a cooperation agreement. Most builders have signed on to the agreement.
 Part of the agreement states that “The Builder agrees, by adhering to this Code of
Conduct, that there can only be ONE price for the home, whether sold in-house or
by a participating REALTOR®”.
 This means that you can have a REALTOR® work on your behalf in the purchase of a
new home without it costing you any extra.
 In all honesty, there is not a lot a REALTOR® can do. The Builders prices are usually
fairly firm. Your REALTOR® can help with location, option choices & some small
negotiating points.
 You can go and view show homes without your but if you want to have your
REALTOR® represent you, don’t ask the show home representative many questions
and don’t give them your name. If you see something you like, take your REALTOR®
with you on a second trip.
 There are some rules and conditions that must be met. Ask your REALTOR® for
details.
Used Homes
➣
➣
Advantages
➛ Location may be closer to schools, shopping, transportation,
downtown, hospitals etc.
➛ Established neighbourhoods may have mature trees, parks.
➛ Fencing and basement development may already be done.
➛ Generally quieter with less construction in area.
➛ Not competing with Builders when re-selling.
➛ No G.S.T.
Disadvantages
➛ Generally there is no warranty on the home or appliances.
➛ No colour choices.
➛ May need repairs.
House or Condo?
Which is for you, a house or a condo?
Condominiums
➣
A condominium is a type of ownership, not a style of
building.
➛ A condo can be an apartment, a townhouse, a duplex,
or even a house. For example, not all town homes are
condos, & not all condos are town homes.
➛
When you own a condo, you own all of the insides of
your unit & a percentage of the common areas of the
complex.
➛
You pay a monthly “Condo Fee”. This fee pays for the
operation of the corporation, upkeep of the common
areas and the exterior of the building (s). It might also
pay for other things such as parking, utilities or security.

Condominium ownership: Means you own the unit you live in and share
ownership rights for the common space of the building. Common space includes
areas such as corridors, grounds around the building, and facilities such as a pool
and recreation rooms. Condominium owners together control the common areas
through an owners’ association. The association makes decisions about using and
maintaining the common space.

The Association: Includes all owners in the complex, elects a Board of Directors
at Annual General Meetings (AGM’s). I can’t stress enough the importance of
paying attention to what is going on with the Board. Get the minutes of the Board
meetings and AGMs. Attend the AGMs. If possible get elected to the Board. You
have a big stake, both financially and lifestyle wise, in what is happening. You
simply can’t afford to not pay attention.

Budget: The Board often hires a management company to manage the building.
The management company will prepare a budget for the Board to approve. The
budget includes the costs of running the complex. Things such as landscaping &
snow removal, garbage pick up, building maintenance, insurance costs,
management costs, utilities and reserve fund costs.
 Condo Fees: These costs are allocated to the owners by way of the “condo fee”.
Usually, the total cost split between the owners based on the size of their unit. For
example if you own 6% of the total area of the liveable space, then your condo fee
will be 6% of the budget broken down monthly.
 Reserve Fund & Reserve Fund Study: Condos must have a “Reserve Fund” in
place so that when repairs to the common areas, heating, air conditioning etc., the
money is there to do the repairs. A “Reserve Fund Study” is a 25 year plan
outlining the expenses the condo is likely to occur and how much money needs to
be in the fund. The Reserve Fund Study is re-done every 5 years so it doesn’t
become out of date. The idea is to prevent large “Special Assessments” or cash
calls to repair or replace something which could be disastrous if the owners
couldn’t come up with the cash.
 Condo Documents: When you purchase a condo you will receive the “condo
docs” which will include most of the ones listed below as well as some others. I
have just listed the main ones.
 By-Laws – These are the rules & responsibilities by which everyone must live. Pets,
parking, noise, are just a few of the items here.
 Financial Statements: These will tell you of the financial health of the corporation
 Budget: This outlines the current expenses and breakdown of the condo
fees
 Reserve Fund Study
 Management Agreement
 Insurance Certificate
 AGM Minutes: This is the minutes of the most recent Annual General
Meeting
 Board of Directors Meeting Minutes: These are the best place to see what
is happening with the condo.
 Other relevant documents
When you buy a condo you are able to review these documents and within
a set period of time (usually 10 days) either accept or reject them. If you
reject them, the deal is dead and you get your deposit back.
In summary, a condominium is a lifestyle choice. Condos have advantages
like freedom from yard work but also some disadvantages like more rules
and condo fees.
Condos – Advantages & Disadvantages
➣
➣
Advantages
➛ Lifestyle choice
➛ No lawn mowing or snow shovelling
➛ Less maintenance
➛ Community involvement
Disadvantages
➛ Less private
➛ Less control on surroundings
➛ Monthly condo fees
➛ More rules & regulations
Single Family Homes





For the purposes of this presentation, single family homes are any
home that is not a condo.
A single family home usually is a stand alone residence but it could
also be a duplex, triplex or townhouse where no condominium
corporation exists.
The attached homes (duplex, townhomes etc.) usually have an
agreement registered on title, sometimes called a “Party Wall
Agreement”, that spells out the responsibilities of each owner. It
usually allows for the owner of one unit access to another unit for
the purposes of repair.
This is a much simpler form of ownership. There are no condo
boards, meeting, rules etc.
The home owner is responsible for all maintenance and repairs
Single Family Homes - Advantages & Disadvantages
➣
➣
Advantages
➛ More private
➛ More control over surroundings
➛ No condo fees
➛ Fewer rules & regulations
Disadvantages
➛ Mow your own lawn and shovel your sidewalks
➛ Maintenance must be done by owner
➛ Maintenance must be paid for by owner
Home Styles
What Style of Home Suits You?
Home Styles
There are many building styles but most are based on one of the four
basic styles and combinations of them.
1 Bungalow
A bungalow is basically a home with one level above grade
with a basement below grade. You enter slightly above grade level
to the main floor.
2 Bi-Level
A bi-level is similar to a bungalow but is raised slightly above
grade. You enter at grade level and then go up a half set of stairs
to the main floor or down a half set to the basement. This gives the
home larger windows in the basement making the basement much
more liveable.
3 Two Storey
A two story has two floors above grade, one on top of the other
and a basement below grade. A two (or more) storey home takes
less area on the lot to get the same floor area as a bungalow or
bi-level, but the basement is smaller. It has one full set of stairs
going from the main floor to the upstairs and another full going
to the basement.
4 Split Level
Split level homes come in many configurations. They often have
multiple levels that may or may not be above each other.
Generally there is a half set of stairs going from each level to the
next level.
The floor area is calculated on the floor area that is above grade (the
ground) only. Any area that is below ground level is not included in the
floor area listed. Let’s look at the four styles separately.
Since we only calculate the square footage of a home by what is above grade (ground),
in all of the diagrams below the white area is considered the floor area. I am going
to assume that all of the homes shown are 1,000 sq. ft. homes (above grade only)
The Bungalow

The bungalow is the simplest of styles. It is also one of the most popular. Here the
main floor would be 1,000 sq. ft. but the basement area would give another 1,000 so
the total living area would be 2,000.
Bungalows
The Bi-Level

Notice the home is raised about half way out of the ground compared to the
bungalow. You enter the front door and go up a half flight of stair to the
main floor or down to the basement. This allows for the larger basement
windows.
Bi-Levels
The Two Storey

Because the above grade living area is on two floors, you can get the same
living space on half the foundation. This works well on a small lot. It does
make the basement smaller however.
Two Storeys
The Split Level

The split level is basically half bungalow and half bi-level. A four level
split is shown here
Split Levels
A Couple Variations
3 Level Split
Two Storey Split
Location
Where Do You Wish To Live?
Location, Location
Some concerns about the general district are:
➣
How is the district in relation to:
➛ Your work?
➛ Schools?
➛ Shopping?
➛ Transportation (buses, LRT etc.)?
➛ Parks & Recreation?
➛ Other interests?
➛ Does the district in general have a good
record for re-sale value?
Location, Location, Location
Some other, more specific concerns might be:
➣
What is the general condition of the neighbourhood?
➣
How do the neighbours look after their property?
➛ Is the grass cut? The weeds controlled?
➛ Are the trees trimmed? Etc.?
➣
Cleanliness of the area?
➣
Are the parks and other amenities in a good state of
repair?
The Search
You’re ready,
It’s time to find your Dream Home!!
MLS® & Your REALTOR®
Your REALTOR® will use the MLS® (Multiple Listing Service®) to:
➣
Locate homes for sale in the district (s) of your choice.
➣
Locate homes for sale in the style (s) of your choice.
➣
Locate homes in your price range.
➣
Make appointments to view the appropriate homes.
Viewing Homes
There are many things to look for when viewing homes. Here are just a
few.
➣
➣
The Exterior
➛ The general condition of the yard, fencing etc.
➛ Roof, soffit and eaves.
➛ Siding or stucco, window frames etc.
➛ All of the above on the garage, if there is one.
The Interior
➛ Windows, and sills.
➛ Flooring
➛ Carpet, lino, hardwood
➛ Kitchens, Cupboards, drawers etc.
➛ Appliances
➛ Bathrooms, fixtures, tiles around tubs
➛ Ceilings, (look for signs of water damage)
➛ Basement
➛ Cracks in the foundation. (Note: Minor
cracks are common in virtually all concrete
foundations.)
➛ Furnace, water heater.
➛ Electrical & Plumbing
These are just some of the items to pay attention to. Your Realtor® can
help point thing out for you. It is a good idea to take some notes on each
home. It is very difficult to remember everything on every home. Also, a
second or even a third showing on a home you are interested in buying is
quite common.
Viewing Hints
➣
➣
➣
➣
It is extremely important that unless there is a genuine emergency, you do
not cancel once your REALTOR® has made appointments. Sellers go to a
lot of trouble when they know their home is about to be shown. They clean,
re-arrange plans, go out and generally disrupt their lives for you. Also,
please be on time.
When going house hunting, it is a good idea to wear shoes that are easy to
get on and off. You don’t want to wear hiking boots that take five minutes
to lace up at every home!
Try to remember your favourite three properties. If you try to remember
them all, you will drive yourself crazy and forget important details of the
ones you do like.
Rank them #1, #2 and #3. If you see a new home that you prefer over one
of those, try to eliminate #3 from your mind and substitute the new one in
the right location, #1, #2 or #3.
More Viewing Hints
➣
Find a REALTOR® that will show you as many homes as you
need to see. Some REALTORS® believe that they should be
able to show you five or six homes and you should buy one of
them. I disagree. It is likely the largest purchase you will ever
make. You need to be comfortable with it. Keep looking until
you are satisfied!
➣
Having said that, nothing is ever perfect. All homes have flaws
of some kind. The question is whether the flaws are important
enough for you to not buy a home that you like.
➣
Once you find your home, don’t doubt your instincts. You must
be prepared to act. If you like a property enough to want to buy
it, chances are someone else will like it as well. If you
hesitate you may (probably will) lose it!
➣
It doesn’t matter if you have looked at one
house or fifty, when you find the one you
want, buy it!
Open Houses
➣
Open houses are generally held by the listing REALTOR®.
➣
You do not need your REALTOR® with you to go
through an open house.
➣
If you see a home at an open house that interests you, call
your REALTOR® to arrange a private viewing at a later
time.
➣
If the home is simply a “must have now”, call your
REALTOR® immediately!
➣
You do not have to buy the home from the REALTOR®
holding the open house!
You Found It!!
The Offer to Purchase & Negotiation
The Offer to Purchase
➣
The Offer to Purchase is a legal document
➛
It is too complex to go into detail here, but here
are some suggestions.
➛
It is a good idea to get a copy of the Offer to
Purchase contract from your REALTOR® before
you find the perfect house. This gives you a
chance to read it over and ask any questions ahead
of time.
➛
Offers are always done in writing.
Price
➣
The price you offer is entirely up to you. Your REALTOR®
can give you advice as to what is reasonable and what is not.
Your REALTOR® can check the MLS system to figure out
the average difference between list and sale price in the area.
➣
While everyone wants to get a “bargain”, making an offer
that is extremely low is not a good idea. It alienates the
Seller and makes him/her defensive and less willing to
negotiate.
➣
Things other than price are also important. Possession date is
very important and chattels (the items included, fridge, stove
etc.) are also things that can be negotiated.
Deposit
A deposit must accompany the offer. The deposit shows good faith
and becomes part of the down payment for the purchase.
➣
If the offer is not accepted, the original deposit cheque is returned
➣
The deposit is held “In Trust” by the listing real estate
Brokerage
➣
are
to the
If the offer is accepted and then one or more of the conditions
not met, the deposit is returned from the listing Brokerage
Buyer
➣
The amount of the deposit varies, but $5,000 is common.
Occasionally a larger deposit is required. Your REALTOR®
have a better feel for this, depending on the circumstances.
will
Conditions
Conditions are clauses that you may include in your offer.
If the condition is not satisfied the offer is null and void and
your deposit is refunded. Conditions are generally used to
protect the purchaser. Some Conditions that you may wish
to include in your offer are:
➣
Offer is Subject to Financing
➛
If you are unable to get appropriate financing
the offer is null and void.
➣
Offer is Subject to a Home Inspection
➛
A home inspection is a service provided by professional
home inspectors. They look at all of the major
components of the home such as the roof, plumbing,
heating and electrical and give you a detailed report.
➛
If the inspection finds HIDDEN flaws of a reasonably
substantial nature (usually over 1% of the purchase
price), you may cancel the offer and have your deposit
refunded.
➛
The cost of a home inspection is generally around $350
plus G.S.T. depending on the size of the home.
➛
A home inspection is recommended.
➣
Some Other Common Conditions
➛
Offer is subject to the sale of the purchasers
present home by a certain date.
➛
Offer is subject to review by purchasers
lawyer by a certain date.
➛
Offer is subject to viewing of home by third
party such as parents or co-signer.
Presentation of the Offer
➣ Usually, the Buyer’s REALTOR® will meet with the Seller’s
REALTOR®, but sometimes it is done by way of faxing.
➛
The Buyer’s REALTOR® explains the offer, all
conditions and any other relevant details.
➛
Seller’s REALTOR® presents the offer to the
Seller(s).
➛
If the Seller decides to accept the offer as written, it
is a sale; subject to the conditions in the offer.
➛
If the Seller makes any changes to the offer, it is
called a counter offer.
The Counter Offer
➣
➣
The Counter Offer is brought back to the Buyer(s)
➛
If the Buyer(s) accept the counter offer as written, it
is a sale subject to the conditions.
➛
If the Buyer(s) make any changes, it becomes
another counter offer that must be taken back to the
Seller(s) for their consideration.
Acceptance
➛
Once both Buyer(s) and Seller(s) have agreed to all
of the terms and conditions it is a sale subject to the
conditions of the contract.
The Conditions
➣
Satisfying the Conditions
➛
Time is of the essence. It is the responsibility of
the parties to the contract to make every attempt
to satisfy the conditions within the allotted time.
➛
If there is a condition that cannot be satisfied, the
contract is null & void and the deposit is returned
to the Buyer.
➛
Once all conditions are satisfied, waivers of
conditions are signed by the Buyer(s) and it is
now a FIRM SALE!! You are moving into your
new home!!
The Legal Stuff
Lawyers and Other Considerations
Legal Considerations
➣
The Lawyer
➛
➛
If you have a lawyer, contact him/her
Give the lawyers name to your REALTOR®. Your
REALTOR® will get copies of the documents to the
lawyer. If you don’t have a lawyer, your REALTOR®
can suggest three or four for you to choose from
Closing Costs
➣
The Closing Costs
➛
There are some costs involved above the actual
down payment
➛
Ask the lawyer about the closing costs. I recommend
that you have about $1,500 set aside for this purpose.
Generally, the closing costs are less than this, but it is
better to have extra than not have enough.
➛
There may be an appraisal cost of about $200 and a
home inspection cost of about $350 as well.
Other Stuff
➣
The Other Stuff
➛
Contact the utility companies (Atco Gas, Enmax,
Telus, The City of Calgary) and perhaps Shaw cable
and let them know of your new address and the
possession date
➛
Change your address with Canada Post and notify all
your friends and relatives
Possession Day!
What to expect on the big day
It’s Here! Possession Day!
➣
The Walk Through
➛ The purchase contract has possession at noon on
“Completion Day”
➛
Generally a “walk-through” is done between 10 and 11
am. You meet with your REALTOR® and go through
the house
➛
At the walk through you look the house over and make
sure that it is in the same condition as when you bought
it. Check that the appliances are working, the furnace
and the plumbing
➛
Assuming all is OK, there is nothing left to do but
move in
➛
On the RARE occasion that all is not OK, call your
lawyer for advice.
Great Expectations
➣
Expectations
➛
This is an exciting day. Often the walk-through can be
a bit of a let down. It may have been several months
from the time of purchase and people tend to remember
the things they like about a home and forget the other
things. Also, when you last saw the home, it had
furniture. It had pictures on the walls. It was a home.
Now it is empty. There are nail holes where the
pictures used to be, and in most cases, the carpet has
not been cleaned.
➛
Not to worry! You will move in your furniture, hang
your pictures and make it YOUR home. It will be the
home you dreamed of, in no time at all.
Great Expectations
Enjoy the journey. You have a million decisions to make.
Where to put the couch, the TV. What picture to hang
where and many more.
Congratulations!!
You’re a taxpayer!
(Oops, I mean, homeowner)
Conclusions
We Hope This Seminar Has Been Both
Helpful & Informative
Thank You!
I would like to thank you for taking the time to view this
presentation. I have tried my best to confuse (er, I mean educate)
you. If you have any questions, please ask. I will try to answer
them as best as I can.
I hope you found some of this information to be helpful and I
look forward to seeing you again.
Also, ask about my “Listings by E-Mail” service. It is a service
that automatically e-mails you listings that match your criteria as
soon as they are listed. It also gives you much more information
than “www.realtor.ca”. You will find it extremely helpful!
Contact Info
My name is Bing Fountain. I have been a REALTOR® in
Calgary for almost 30 years and have been the Broker/Owner
of DreamScape Realty since 1997. If you have any questions,
my contact information is below.
Bing Fountain
Broker/Owner
DreamScape Realty
“turning dreams into reality”
712 Alderwood Pl. S.E.
Calgary, Alberta
T2H 2B4
Call:
25-DREAM (403-253-7326)
E-mail: dreammaster@dreamscape.ca
Web Site: www.dreamscape.ca
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