1.) Get Pre-approved for Financing and Set a Budget

This should be the first step for any home buyer. Contact your mortgage broker/bank and see what they will approve to lend you. Once the lending amount is determined by your bank, assess your own needs and set a budget based on a quick glance at properties online that meet similar needs and wants.  Sometimes the purchase of a property can happen quicker than expected and the buyer only has 5 business days to satisfy their financing condition. Without a pre-approval, lenders find the 5 days very constricting and the buyer could potentially lose out on the property. Lastly, upon pre-approval your lender will lock you in at the current interest rate for a specific amount of time. If rates were to rise, you would still be entitled to the lower rate.

2.) Visit all Properties of Interest

If the property meets your needs and wants, schedule a showing. Pictures can be deceiving and even the best descriptions can’t compare to a first hand look at the property. Often realtors will not include photos of the house’s imperfections. Online pictures fail to show the neighbourhood, the neighbours, the general condition of the structure, mechanical components, and flow of rooms or layout.  Secondly, even if the property doesn’t suit its market, knowledge is gained.

3.) Look Past the Décor.

Don’t get fooled by the fancy decorations and décor. Professional stagers have a job for a reason…they have the ability to sell houses quicker and for more money. However as a buyer, you’re not buying the fancy décor and furniture, so look past the glitter. To the contrary, an opportunity exists if you can overlook bad décor, ugly furniture, or offensive odors. Generally these properties will stay on the market longer or be priced lower.

4.) Think Re-sale Value

At the time of purchase buyers generally give little consideration to re-sale, but this could come back to bite you down the road. Ask your realtor if the property fits the profile of the neighborhood. Even though you may only need a 2 bedroom home, if three bedroom homes suited for families are prevalent in the neighborhood, selling a two bedroom could prove difficult. People who are often relocated should pay special attention to re-sale.

5.) Use a Licensed Real Estate Agent

A licensed real estate agent can be your biggest asset in the purchase of a home. They have knowledge and experience to help guide you through the purchase process. An agent’s job is to educate you on local market trends and prices. They have access to a huge inventory of homes and can show you want local listings have sold for in the past.  It is their job to negotiate on your behalf with your best interest in mind.

6.) Understand Market Conditions

With the market continuously changing it’s important to know the current market condition and understand how it affects your position as a buyer or seller.

Buyers Market:  The supply of homes on the market exceeds demand. High inventory of homes, home listed longer on the market. Prices tend to drop in this type of market. Buyer has negotiation leverage.

Sellers Market:  The number of buyers exceeds the supply or number of homes on the market. Homes generally sell quickly and prices tend to increase. Buyers loose negotiating leverage.

Balanced Market: The number of homes on the market closely equals the demand or number of buyers.  Homes sell within an acceptable period of time and prices are generally stable.