Friday, June 24, 2011

BUYING AND SELLING: Savvy Buyers Know Value When They See It

Suddenly it begins. After all the anticipation of finding your dream home, your buyer agent has called and you're off to see the first property that may be "it". You're excited, but are you really prepared to recognize the best deal when you see it?

Whether you've shopped for a home before or not, you probably lack professional real estate assessment skills. How have you honed your powers of observation when it comes to construction and interior design details? Buyer agents are expert at both assessment and observation since they are legally and financially bound to make sure buyers they represent understand what they are buying.

Don't make assumptions that you'll be covered by professional ethics and expertise. Ask a lot of "how can you tell …" questions beforehand. Have positive and negative features pointed out to you as you walk through to evaluate the house or condominium you hope will be a dream, not a nightmare.

Too many buyers look at the wrong things in the wrong way and end up paying more than necessary. As a buyer, you must look at things differently than a casual observer would:

You're not there to give the owners a thumbs-up or down on their colour scheme. The best buy may be a poorly decorated or out-dated home with great bones.

You're not shopping for furniture. If you love the furnishings, beware. They may distract you. If you hate them, imagine the rooms empty and then mentally add your pieces.

Don't buy with your nose. Yes, dampness can be a warning sign, but if the owners love smelly food or need to wash the dog, hold your breath. A house or condo that shows badly can save you money.

You're not the tidy police. If the level of housekeeping and clean up is below your standards, suck it up. Look carefully to separate dirt from damage. If a power clean and a coat of paint would transform the place, what's that worth to you?
You are viewing the property to prepare to make an offer. If the property is worth visiting, it's worth serious consideration from an offer point of view. To help you establish a crystal clear, accurate impression of value, be prepared. Pack high- or low-tech versions of a tape measure, note-taking material, and camera. Get a copy of the listing and take notes about what you want to have included in an offer. Check out appliances since if they're too old you don't want them in the offer. After you've seriously considered the property, decide whether you want to make an offer. Don't decide this when you first see it from the curb or the front door.

Here are five ways to get ready before you go:

1. Are you ready if the first one is the best one?
There's not a magic number of properties to see before you find one you like. If the buyer agent has been listening, the first one may be it. Can you make an offer if you love it? Have you been pre-approved for financing? Have you got all the advice you need from friends and family, or
made arrangements with them to come immediately when you find "the one?" Measure your large items so you'll know what will fit while you walk through. Unnecessary delay may put you in a bidding battle.

2. Viewing a property does not mean staring at it, but experiencing the space and vistas firsthand.
Watch television's real estate programs and you'll see real estate agents enter the room first while buyers hover in the doorway peeking in. Go completely into the room. Move around the room, so you see it from every corner, doorway, and vantage point. Look out of every window to see who'll look in. Check every closet and built-in. Study the space so that your eye travels around the room following the walls, not the cleverly-staged furnishings. Question furniture positioning. What is being hidden? What potential is there for arranging your large pieces like sofas, beds, and wall units? Don't take pictures and expect to sort things out later. Get out on the balconies and walk the perimeter of the yard. Evaluate the view and what privacy you'll have. Make thorough observations first, then photograph key positive and negative features. Go through twice, but reverse the direction, so you have a different view of everything. Take as long as possible to get to know a property since you may not be back until the day you move in.

3. No property is an island.
Drive and walk the block and neighbourhood to see what positives and negatives exist. Which noise sources, including parks and schools, and which pollution sources may impact the property? Where will developers be busy soon? Check area official plans for upcoming developments and municipal use plans. That great phase one you buy into may be crowded out by the next two phases. If you're purchasing a view, determine exactly what protects the view from future construction?

4. Establish automatic pre-offer follow-up with your agent.
Make it clear that you need details regarding costs, including utility records, condominium fees, increase history, and property taxes. Copies of receipts and permits for major renovations and repairs are essential to ensure quality of workmanship and insurability. If you intend to operate a home-based business, the agent will know what zoning bylaw is relevant. Have the agent ask about an assumable, existing mortgage which may be less expensive to increase than starting from scratch.

5. Take a reality check and stop looking for your dream home.
This is bricks and mortar you're after. There will be compromises and disappointments however much you love the property. If the house has been made-over or staged, a multitude of unpleasant realities may be waiting below a coat of paint. Get excited about ownership, but stick to your budget. The same advice that works for travel, works for home ownership: Take half as many clothes and twice as much money.

Realty Times PJ Wade June 14, 2011

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