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    Real Estate 101 London Ontario

    Buying a Home in London Ontario and Area

    Buying a home in London, Ontario, and the area is exciting but can be time consuming and expensive. It can be an emotional roller-coaster ride.

    Buying a property is usually the most expensive purchase you will make in your life, and it’s not something you do every day of the week.

     

     

     

    Glossary of Real Estate Brokerage Relationships

     

    Real Estate brokerages and their salespersons are required to disclose the type of working relationship they have with buyers and sellers in a real estate transaction.  There are several types available to you, and prudent to understand these when a Realtor provides specific assistance to you in buying or selling real estate.  Buyer’s Agent and Seller’s Agent relationships are commonly referred to as “agency” relationships and carry with them legal duties and responsibilities for the brokerages and the buyer and seller.

    Buyer’s Agent

    A Buyer’s Agent acts solely on behalf of the buyer and owes duties to the buyer, which includes the utmost good faith, loyalty, and fidelity.  The agent will negotiate on behalf of and act as an advocate for; the buyer.  The buyer is legally responsible for the agent’s actions when that agent is acting within the agency’s scope.

    Seller’s Agent

    A Seller’s Agent acts solely on behalf of the seller and owes duties to the seller, including the utmost good faith, loyalty, and fidelity.  The agent will negotiate on behalf of and act as an advocate for; the seller.  The seller is legally responsible for the agent’s actions when that agent is acting within the agency’s scope.

    UNDERSTANDING AGENCY -Who Works for Whom?

    Seller Agency (Single Agency)

    • Will represent the best interests of the seller
    • Will owe the seller fiduciary duties

    Buyer Agency (Single Agency)

    • will convey the best interests of the buyer
    • will owe the buyer fiduciary duties

    Transaction Broker (Dual Agency)

    • describes both the buyer and the seller equally
    • the objective is to get a mutually satisfactory agreement among all parties
    • All parties have confidentiality.
    • Both the buyer and the seller have a right to counsel.  Before making any decisions, both parties have the right to seek legal or financial counsel.

    How Much Can You Afford? Qualifying for a Mortgage:

    Find out from your lender how much you qualify to spend on a home. It is effortless to become excited about features found in homes out of your price range.

    • Most lenders require that your monthly payment range between 25-28% of your gross monthly income.  Your total monthly PITI and all debts (from installments to revolving charge accounts) should range between 33-38% of your gross monthly income and is a general rule of thumb. Still, other vital factors precisely determine your ability for a home loan.  These factors are:

     

    • INCOME:  History of employment, the stability of payment, the potential for future earning, education, vocational training and background, and any secondary income such as bonuses, commissions, child support, etc.

     

    • CREDIT REPORT:  History of debt repayment, total outstanding debt and full available credit.  If you have concerns about your credit report, consider contacting one of the major credit bureaus for a copy of your file.

     

    • ASSETS:  Cash on hand, other liquid assets such as savings, chequing, CDs, stocks, etc.

     

    • PROPERTY:  The home’s appraised value to ensure fair value and is marketable to secure the loan.

    Closing Costs:

    Don’t forget to think ahead carefully.  In addition to the down payment on your dream home, there will be loan processing fees and other closing costs.  These fees must be paid in full in cash at the time of the final settlement unless you can include these in your financing.  Typically, total closing costs will range between 2-5% of your mortgage loan. Your Realtor, your lender and your lawyer will provide a detailed schedule.

     

    Don’t Get Swept Away When Shopping.

     

    Choosing the Right Neighborhood is as Important as Choosing the Right House!

     

    There are many factors to consider when selecting a neighbourhood that is right for you.  Below are just a few of the many factors — You may think of others that are important to you. Districts have distinctive personalities designed to best suit single people, growing families, two-career couples, or retirees.  Investigate to determine that the neighbourhood you choose to look for home matches your lifestyle and personality.

    Scout out the Neighborhood!

    You must scout the neighbourhood in person.  You live in more than your house.  Talk to people who live there.  Drive through the entire area at different times of the day, morning, afternoon, evening, and late at night and going during the week and on weekends.

    • Look carefully at how well other homes in the area are maintained, painted, yards well cared for, parked cars in good condition, etc.
    • Look for things like access to major thoroughfares, highways, and shopping.  Listen for noise created by commerce, roads, railways, public areas, schools, etc.
    • Smell the air for adjacent commerce or agriculture.
    • Check with local civic, police, fire, and school officials to find information about the area.
    • Look at traffic patterns around the area during different times and drive from the site to work.  Is the neighbourhood near parks, churches, recreation centers, shopping, theatres, restaurants, public transportation, schools, etc.?

     

     

    Using a Realtor® to Purchase a New Home

    Why should I use a REALTOR* to purchase a new home?

    • The advantages of having a REALTOR*  help you purchase a new home are the same as those for buying a resale home…knowledge of the market, help in finding the perfect home quickly, expertise in contract writing/negotiation, and closing assistance.  The builder has a professional representative watching out for his needs, and you need the same expert representation.
    • Buying a new home is a little more complicated and time-consuming than buying a resale.  A Realtor will guide you through this process.  Experienced Realtors will know the ideal way of working with builders & have access to a database of information about subdivisions, floor plans, etc.  I am also
    • Familiar with new home warranties and builders’ purchase contracts.
    • Your interests are protected when you are entering into a contract for a semi-custom or build-to-suit home.  These transactions are complex, and the contract details must be exact to protect you and ensure you get exactly the home you want!

    Is there any advantage to not using a REALTOR* to purchase a new home?

    No.  There is no financial advantage for you to buy directly from the builder.  Builders have a “single-price” policy, meaning you pay the same price whether a Realtor represents your interest or not.  Just as in any resale, the Seller pays your Realtor’s fee.

    REMEMBER – the Builder requires that your Realtor accompany you on your first visit to the Builder’s sales office, or they will NOT PAY your representative’s fee!

     

    How to Choose a Good Inspection Company

    Is an inspection necessary?

    You have the right to request an inspection of any property you are thinking of purchasing by a professional inspector of your choice.  It would be best if you always exercise your option to have the property’s physical condition and its inclusions inspected.  Many of the more severe and expensive mechanical, electrical, structural, and plumbing problems are not noticeable to the untrained eye.  If repairs are needed, negotiate these in your contract offer.  A professionally conducted home inspection followed by a written evaluation is becoming standard procedure in home buying because of increased buyer awareness and savvy. Your Realtor will attend all home inspections and do follow-ups.

    Are inspectors licensed?

    Since an increasing number of buyers are requesting property inspections, there has been a rapid increase in the number of people entering the inspection field. At this time, there is no overseeing or licensing body regulating home inspectors. A good experienced Realtor will have screened and, over time, have a selected list of the best home inspectors.

    What does an inspection entail?

    A qualified inspector will follow the Standards of Practice in conducting their inspection.  The inspection consists of a physical inspection of the home with the purchaser present, followed by a written report detailing their findings.  They report on the general condition of the home’s electrical, heating, and air systems, interior plumbing, roof, visible insulation, walls, ceilings, floors, windows, doors, foundation, and visible structure.  The inspection is not designed to criticize every minor problem or defect in the home.  No home is perfect.  It is intended to report on significant damage or serious problems that require repair for the well being of the family, requiring considerable expense.

     

    What Is the primary purpose of the inspection? 

    The primary purpose of the inspection is to educate the buyer to make an informed purchasing decision.  The inspector should encourage the buyer to attend the home inspection.  A good home inspector knows how the home’s many systems and components work together and how to minimize the damaging effects of sun and water.  The buyer’s attendance at the inspection provides them with an overall idea of possible future repair costs and maintenance routines.  A home inspection is a valuable information, which could increase the life span, and perhaps the future selling price of the home.

     

    Continuing education is vital for inspectors. 

    A competent home inspector is familiar with the latest construction materials, home building techniques, and professional equipment.  Consumers should research whether prospective home inspectors actively monitor construction and real estate changes to keep their business practices current and professional.

    Time and fee guidelines for the inspection 

    The time necessary to properly inspect a home and the fee charged by an inspector varies according to a market location, the home’s size and age, and the individual inspection company.  However, you can expect that it will take an average of two to three hours to competently inspect a typical one-family, three-bedroom home, with an average cost of $400 to $600.

    Beware of false claims. 

    Consumers must be cautious in evaluating some of the claims made by people hoping to fill the growing demand for home inspection services.  Many new companies request only an application fee.  Some claim to offer certification but do not require exams or proven credentials.  Still, others boast engineering licenses as an assurance of competence, even though the engineering license has nothing to do with home inspecting.

    Inspection extras 

    Some inspectors may be qualified to provide other types of services with their inspection beyond the scope of inspection standards.

    Inspections In 2021

    Being a seller’s market in London and area with multiple offers, many buyers and their Realtor have opted out of including a home inspection clause because sellers are looking for clean offers, meaning no conditions! Many home inspectors offer pre-home inspections where they do a mini-review before a buyer submits an offer.

    Wise Realtors and sellers are having an inspection done before listing their home for two reasons.

    1. If anything that will harm the homes chance of selling, the seller can repair or disclose
    2. Allow buyers to see the inspection report to feel more comfortable in submitting an offer.

    Helping children cope with the move

     

    1. Show the children the new home and their new room before moving in; if this is not possible, pictures or videos will help them visualize where they are going.
    2. Assure children that you won’t forget their friends.
    3. Make a scrapbook of the old home and neighbourhood.
    4. Throw a good-bye party. At the party, have their friends sign a t-shirt.
    5. Have your children write good-bye letters and enclose their new address. You may wish to call the other children’s parents so that they will encourage return letters.
    6. When packing, give your children a box and let them decorate it.
    7. Start a scrapbook for your new home.
    8. Visit your children’s new school, park, church, etc. Take a camera.
    9. Help your children invite new friends over to your new home.
    10. Let your children choose a new favourite restaurant. It will help them feel in control of their New World.
    11. Please encourage them to send letters about their new home to their friends.
    12. Involve your children in groups, sports, and activities that they liked in their old neighbourhood.
    13. Remember, even if you only lived in a home for a few years, it is nearly their entire lifetime to a young child.

     

    Don’t forget the needs of your furry friends!

    Do not transport your pets much farther than they have safely travelled in the past without consulting your veterinarian.  To transport animals by air, you need an airline-approved animal carrier.  Ask about regulations, licenses, tags, etc., for pets.  Also, do not forget to obtain a copy of your pet’s medical records.