My Role as your Buyer's Representative

                        My Role as Your Buyer's Representative
My Role as your Buyer’s Agent is to work on your behalf to find your home. In addition to representing your interests, offering advice, providing information, and selecting and showing you property that meets your criteria, I have prepared this summary of the journey we will take when we find the home on which you would like to make an offer.
 
How much should you offer?
As your Buyer's Agent, I will have access to past sales of comparable properties that we may use as a guide in deciding value on a potential purchase.   There are three important considerations when looking at comparable solds: 
1.  Adjustment for time on the sales being used as comparables
If, for example, the property you are looking at as a comparable sale closed over a year ago, the market conditions may be very different and an adjustment needs to be made to reflect the up or downturn in the market. 
2. Condition of the home in relation to the comparables being used.
By working with me, you have chosen to work with a very active, full-time Realtor and I will likely have been thru many of the properties to which you are “comparing” the property of interest.  The more active the Realtor, the more "in touch" they are and more competent they will be in offering advice. 
3.  Attributes of the homes being compared -
Proximity to each other (the best comparables are in the same neighbourhood) square footage, property size, amenities (positive and negative - eg backing onto a park or backing onto a mult-family high-density development), levels of finished space, numbers of bathrooms, etc. will also be adjusted up or down to reflect as best as possible, a good comparison.
 
After review of some good comparables, we will then look to the motivation of the Seller:
Seller's Motivation
As your representative, I will search the history on the property - how long has it been on the market in relation to the average marketing time for the city, how many, if any, price reductions have been processed, does the property have a history of frequently changing hands and if so, is there a reasonable explanation? The seller's property information statement "SPIS" may reveal defects).  Often the longer the period of ownership, the greater the emotional attachment,. Perhaps they raised their children there, and will have a greater perceived value in their home than the buyer who may see worn carpets, dated fixtures, and floral wallpaper. We will need to be sensitive to this in the offer presentation and be sure not to offend the seller by being overly negative about “all the work” their home needs.
The “flip” side to this may be the short term ownership of a property by an investment buyer who has purchased the property, made improvements, and put it back on the market to turn a profit. 
The bottom line is getting at the seller’s motivation to sell…is it a genuine need to sell or is the objective purely profit.
Properties that have gone "Power of Sale" should not be assumed to be bargain basement prices as the Banks still have a responsibility to obtain fair market value and are obliged to market the property through the same MLS process as other properties in order to ensure that they have secured the best possible sale price. Any discounted prices on a Power of Sale are usually tempered by the fact that the property will be sold “as is” and no guarantees are offered by the Lender as to the condition of the property.
In today's buyer’s market we see fewer sellers on "fishing expeditions" meaning that they are trying to cash in on the rising prices we have seen in the past.  Homes that are properly priced and in good condition are still selling and multi-offer situations can still occur.    There is no limit as to how many offers can be registered on a property.  The responsibility of the seller’s agent is to notify the buyer’s agent if another offer is pending and deal with any or all offers in a timely fashion.  The buyer's agent will, when preparing an offer, investigate the "irrevocable" required for a response to your offer and ensure no stall tactics or unnecessary delays occur in getting the offer presented.
 
Finally, don’t forget the Buyer’s Desire for the Property
Even when all the mathematics are calculated, the stones are all unturned, and the investigations are complete, the price you may be willing to pay for a particular property may be more than (or less than!) the results that our research indicates.  These are the emotions that are not always definable by a dollar value and will be different based on your personal desire for the property. Don’t be afraid to pay a little more than you thought at the outset. If, for example, your parents live a block or two away and will be providing childcare, this could be a good reason to pay a little more. If, on the other hand, homes like this are a dime a dozen and you don’t feel comfortable with the negotiated price, walk away and wait for the next one. Today’s buyer’s market offers more choices and less urgency than a seller’s market.
In a perfect market, the true value of a property is the price the buyer is willing to pay and the seller is willing to accept, with no undue pressure or influence (example – a multi-offer would be a case where the selling price could be inflated due to competing offers) and complete and perfect knowledge of the marketplace. The reality is that there is no such thing!
 
The Negotiation Process
Negotiating in real estate is often considered the high/low game....the buyer comes in low, the seller signs back high and the realtors plays courier back and forth until either an agreed price is reached or the deal comes to a stalemate.   Negotiation involves the wants and needs of two parties and price is just one factor.  Showing genuine consideration for both the buyer and the seller can often result in a better outcome.  Decisions such as inclusions, closing dates, responsibility for repairs to defects that may be revealed upon inspection, are all tools for negotiation.  The job of the realtors is to navigate these issues to satisfy the parties involved.  For example, the seller may prefer a long/short closing and the first time buyer, usually in a renting situation, can accommodate this.  A closing date favouring the sellers can be of significant $$ value to them and the first time buyer is usually best able to accommodate.  Inclusions such as appliances can have a higher perceived value to first time buyers who will need them than the seller may have in taking them.  (eg - to go out and purchase five appliances may set the buyer back $3,000+ vs. the inclusion of the sellers’ used appliances that may have a resale value of $1,000)  Repairs needed and defects revealed thru inspection are also elements to be negotiated.  If, for example, the first time buyer has the time and know-how, or a family member or friend in the specific trade (eg - plumber - removal of galvanized plumbing, electrician - removal of knob and tube wiring, roofer - need for new shingles), they may negotiate a better "as is" price knowing they can save on doing these necessary repairs themselves.    (As an added benefit to the buyer, these repairs would be eligible for a tax rebate as part of our new government incentives!)
 
FINAL STAGES - AN ACCEPTED OFFER, NOW WHAT?
By implementing a "team approach" at an early stage in the process of buying your first home, as your Realtor, I can ensure you are well-informed and offer a more positive experience throughout the search and right up until the closing on the purchase of your first home.
The team members consist of:  your Realtor (me!), a Mortgage Broker, an Accredited Home Inspector, an Insurance Agent, and a Lawyer.  The earlier the team is assembled, the better.  The mortgage broker will determine the qualifying amount offering a "pre-approved" figure to use while searching for the home, by securing the lawyer early in the process you will have access to legal advice should more complex issues arise beyond the scope of the Buyer's Agent.  Generally, lawyers will not charge extra for a small amount of additional time spent as legal fees for real estate are typically a "flat fee" based on the purchase price of the property.
During your “conditional period” (the time within which you have negotiated with the seller to satisfy yourself that you can secure financing on this home, conduct a home inspection, and obtain insurance), the following will take place:
Your mortgage broker will need a copy of the accepted offer to confirm that the property satisfies the lender. The lender may, depending on the downpayment, order an appraisal prior to removal of your financing condition.
The home inspector will arrange to attend the property with you for typically 2-3 hours to examine all visible components of the home. It is advisable to attend as a first time buyer if only to be educated on the mechanics and typical maintenance required for your biggest asset.
Your insurance company will need details of the home you have purchased including square footage, distance to the nearest fire hydrant, age of the furnace, roof covering, etc.
My job is to ensure that you have done your “due diligence” during your conditional period (typically 10 business days) at the end of which either of the following then occurs:
1. You are satisfied with the results of your inspections, your mortgagee has approved the property and your insurance company has given the go ahead and you attend at my office to sign a “Removal of Conditions” making your purchase “solid.” The sold sign goes up and the lawyers proceed to do their title search and prepare transfers and mortgage documents.
Or
2. You have, through your investigations, revealed significant defects with the property that give you cause for concern on proceeding with the purchase. We may then attempt to renegotiate with your seller in light of our findings, accept the property with the defects, or sign a “Mutual Release” to end the deal and arrange for the return of your deposit.
Hopefully #1 is the outcome but be prepared for the possibility of “surprises.” 
Once you have a binding agreement, and all conditions are removed, you are on your way to homeownership! Don’t be surprised to feel the occasional moments of anxiety, these are natural. No one ever knows for certain whether the real estate market in their local area is going to continue to go up or down, or whether interest rates will stay as low as they are right now. Just remember that real estate is a long term investment that puts a roof over your head, has always historically gone up in value over time, and your rent payments no longer go towards your landlord’s bank account but are now going to pay down your own mortgage and to build equity for your future….CONGRATULATIONS!
 
I look forward to working with you.
 
Marianne Vandelinde


 

 

 

 

 

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