Five Great Things About Home Ownership

If you’ve been on the fence about homeownership, now is the time to take a leap! Don’t let the negative press deter you from one of life’s greatest joys.

Take a look at five short and sweet reasons that homeownership is great!

1. Equity. When you pay rent, you never see that money again. It is lining the landlord’s pocket. Yes, buying a home may come with some hefty initial costs (downpayment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Homeownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today’s market.

2. Relationships. Renters tend to see their neighbours come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbours stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.

3. Predictability. Well, as long as you have a fixed-rate term on your mortgage it’s predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years (or so). You know that each year you’ll need to pay for the gutters to be cleaned, and so on.

4. Ownership. Okay, this is a given. Homeownership means you “own” your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart’s desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!

5. Great Deals. It’s a great time to buy. Interest rates are at historic lows. We’re talking 4.0 percent instead of 6.0 or higher. This means big savings for today’s buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a downpayment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.

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Home Inspections: The Basics

The house you want may look great on the surface, but are there problems you just can’t see? Having your home inspected before committing to the purchase is not just smart, but essential, and could save you a lot of money. A home buyer’s eye isn’t trained to spot evidence of problems or potential problems the way a home inspector’s is.

Finding out the defects before you sign on the dotted line enables you to make an informed decision whether to go ahead with the purchase or not. If you decided to go ahead, you can use the information from your home inspection to negotiate a better price.

Home inspections check all of the major systems in the home, such as the plumbing, electrical, heating and air conditioning. They’ll also do a visual inspection of the foundation, doors, ceilings, roof, walls, windows, ventilation, insulation, sewage system, lot, and garage. Their services are required to protect your investment and ensure there are no structural issues or flaws in the house that you may not be aware of.

Unlike homebuyers themselves, whose observations are partial, a home inspector performs his role with an unbiased attitude and with the best interests of the customer in mind. By identifying existing or potential areas of concern, the inspection report will help secure your investment, avoid post-closing surprises and provide you with peace of mind. An insightful report is fundamental to making the right home buying decision.

The process usually takes about three hours, during which time the house is examined from the ground up. The inspection includes observation and, when appropriate, operation of the plumbing, heating, air conditioning, electrical, and appliance systems, as well as structural components such as the roof, attic, foundation, basement, exterior and interior walls, chimney and doors.

A home inspector can also look for the potential for flooding by analyzing the grading outside the home and signs of active moisture inside.

For condominiums, the magnifying glass is usually focused on elements such as the type of structure and its rain-sealing system; condition of the grounds, walkways, driveways, and parking garage; condition of the roof; type and condition of the balconies; type and condition of windows and doors; and the level of finish, workmanship and care.

Inspections usually take about 3 hours for a two-storey detached house, 2 – 2.5 hours for a bungalow, and 2-2.5 for a two-bedroom high-rise condo. Remember that the inspector needs to walk the grounds, the underground parking garage, and view the exterior building envelope as well because the common area costs have to be paid out of the maintenance fee. If there is no provision in the reserve fund plan for undetected defects, there could be an additional assessment placed on all unit owners.

Home inspections cover about 1,000 check-points in about 400 items around the home. Findings are usually in the form of a comprehensive report, together with a recommended action. It is important that such a report include an objective evaluation of the condition of the home, clearly relating existing defects and indicating potential problems.

Learn more about different types of Edmonton Homes or begin searching for Edmonton real estate for sale. If you have questions about which type of housing is best for you, try asking an Edmonton Realtor for help.

Questions To Ask When Choosing a Realtor

When you’re choosing a Realtor, there are some questions you can ask that will help you understand the agent’s experience and help you make the right choice and pick a professional that you can trust and will work well with. This is just a basic list of questions to get you started: there are many more you could ask! These are to get you started in the right direction, but ultimately the key to a good relationship with a Realtor is listening and acting on your needs.

Questions to Ask Potential Realtors

1. Are you a full time agent?
2. How long have you been working as a real estate salesperson?
3. Have you received any recognition awards from your brokerage? (This will help you find out how active they are, as the more active they are, the more experienced and knowledgeable they will be.)
4. How do you keep yourself current in the property market?
5. Do you have a real estate website?
6. What areas do you work in? (You want someone who works and sells in the area you’re buying in so they will have an in-depth knowledge of the community. A Realtor who lives in the area is an added bonus!)
7. Do you have basic knowledge of home construction? (They don’t need to be a home inspector, but should have an idea of what to look for.)
8. Are you technology savvy? (This is important because you may miss out on opportunities. For example, a listing just came out and the agent sends you a quick email, so you are able to see the property faster and possibly put in an offer.)
9. Are you more a buyer specialist or a listing agent only, or do you work in both areas equally?

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Expert Advice: Insurance Broker

Buying a home can be an intimidating process, so it’s important to have the right people around you to answer any questions you might have along the way. Finding the people you want to work with can make a huge difference to your level of understanding and comfort when purchasing a home.

Insurance Broker

When you purchase a home with a mortgage, your lender will require you to have your home and its contents insured. Nearly all homebuyers will purchase homeowners insurance, and most will include all-risk coverage on the building and its contents. This kind of policy will cover you for more than just fire and theft, but wind, hail, lightening, explosions, an impact by vehicle and basically anything else you can think of.

An important part of homeowner’s insurance is the liability exposure. This is important if someone lips and falls ont he sidewalk outside your home, or if your dog bites someone – a homeowner’s insurance policy will cover you for your building, contents and liability.

If the house you’re buying is less than 10 years old, depending on the company you may qualify for a 10 to 15 per cent discount on your insurance. You may qualify for additional discounts if you’re over the age of 50 or 55, if there’s a burglar alarm, if you’ve had insurance for three years without making a claim, or if you’re buying a home without a mortgage.

Generally, company insurance rates can range from $500 to $1,000 annually. Some companies may start with very high rates, but offer more discounts. Others may start with a lower base rate, but offer fewer discounts. If the homeowners don’t qualify for many discounts, it’ll be best for them to go with the lower base rate.

If you’re not looking to buy a home for a year or two, it’s still a good idea to get a tenant’s content insurance package. This insurance can prove valuable even if you don’t own very much – purely for the liability coverage. For instance, if you’re living in an apartment building and there’s a grease fire in your kitchen, the building owner’s insurance will cover the damage, but your landlord may sue you for the damage. If you have a tenant’s package you’re covered. The second benefit is that you’re gaining insurance experience, and you’ll get your claims-free discount when you go to insure your house later on. If you’re a first time insurance buyer, you’re not going to get that discount. The cost for tenant’s insurance, if you’re still living in an apartment, ranges from $100 to $200 per year.

When looking for an insurance broker, start with the Insurance Brokers Association of Canada or your provincial chapter. Because most brokers will give you a quote over the phone, it’s a good idea to call a few to see what kinds of different quotes and packages are available. Since each broker represents many different insurance companies, the broker will record your details and see which company’s policy fits your situation best.

Working on a referral basis is also a good idea. The majority of people get referred to an insurance broker by their real estate agents or mortgage brokers.

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Expert Advice: Home Inspector & Appraiser

Buying a home can be an intimidating process, so it’s important to have the right people around you to answer any questions you might have along the way. Finding the people you want to work with can make a huge difference to your level of understanding and comfort when purchasing a home.

Home Inspector and Appraiser

Home inspectors check all of the major systems in a home, such as the plumbing, electrical, heating and air conditioning. They’ll also do a visual inspection of the foundation, doors, ceilings, roof, walls, windows, plumbing, ventilation, insulation, sewage system, lot, and garage at the very least. Their services are required to protect your investment and ensure there are not structural issues or flaws in the house that you may not be aware of.

Buyers will often order a home inspection as one of their conditions on the offer to purchase. They are the unbiased eye there to protect you and your investment. It’s important to find a qualified, experienced home inspector because at present, there are no standards for this occupation: anyone can call themselves a home inspector!

First time homebuyers should go to any chapter of the Canadian Association of Home & Property Inspectors when looking for a reputable inspector. They can be assured that these inspectors have some form of training or are en route to the training that each province has designated as required for membership.

You should take caution when the term “certified” is used by home inspectors, as they may have only taken an online exam or two-week home study course and may offer bargain prices. Sometimes first time homebuyers put all their money into their down payment and are picking an inspector based on price, which is not the best way to approach things.

It’s a good idea to interview home inspectors before booking an appointment. Have them explain what they’re going to do and ask them about the length of time the inspection should take. For a single-family home, an average home inspection should take 2 to 2.5 hours. Condos or smaller dwellings will take less time. If anyone says they can do it in an hour, they’re probably not spending the time they should and you should continue looking.

Asking potential home inspectors if they have error and omission insurance is another good idea. It’s used to protect both the home inspector and the buyer should anything be missed. This insurance isn’t cheap and insurance companies don’t issue this type of insurance to just anyone, so you can bet the insurance companies will make certain those inspectors are properly trained.

Also beware of any inspector who doesn’t encourage the buyer to attend the inspection, and would rather the homebuyer show up at the end with a cheque. Good home inspectors will encourage buyers to attend the inspection, since buyers will likely need to learn the locations of major valves and shut-offs in their new home.

In most cases, your lender will hire an appraiser to appraise the value of your home, but it’s also a good idea to have an independent appraiser as well to ensure you’re not overpaying before agreeing to buy the home.

When a lender orders an appraisal, it’s likely the homebuyer will not be able to view the appraisal document, even though they may have paid for it, so you may want to negotiate with your lender and find an appraiser you’re comfortable with, from your lender’s list of approved appraisers.

An appraisal takes about 30 minutes, but it may take about two days to receive the report. To find an accredited appraiser, first time home buyers can go to the Appraisal Institute of Canada’s website or ask for a referral from a Realtor or lender. To ensure your appraiser has experience, you may choose to go with an appraiser with a designation, like that of a Canadian Residential Appraiser (CRA).

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Expert Advice: Mortgage Broker

Buying a home can be an intimidating process, so it’s important to have the right people around you to answer any questions you might have along the way. Finding the people you want to work with can make a huge difference to your level of understanding and comfort when purchasing a home.

Mortgage Broker or Banker

Whether you’ve decided to finance your purchase through a bank or another lender, having a banker or broker who understands your daily cash flow needs and long-term goals is an integral part of the home buying process.

First time home buyers should choose someone they feel comfortable with, because you’re going to be sharing a lot of personal financial information. You need to ensure this person is knowledgeably, unbiased and accessible. Getting a mortgage is a very complicated process and unless you have all the information at your fingertips, it’s very easy to make mistakes by being superficially attracted to things such as an interest rate – you really need a professional who can navigate you through all that extraneous information and get you to what really maters.

A good banker or mortgage broker will provide buyers with an understanding of how a different selection of mortgage products affects their overall big picture. Often, people focus on getting the lowest interest rate possible, but depending on what their future goals are, the interest rate could be secondary.

So where does a first time homebuyer find a good broker or banker? It’s like finding a good mechanic: start asking question of people you know and work with, and look for recommendations.

Most banks have detailed listings of rates and products on their websites. If you choose to go with a mortgage broker, you might want to check the website for the Canadian Association of Accredited Mortgage Professionals (CAAMP). A CAAMP designation means they’re held to a higher standard, have a business code of conduct, and take ongoing training. After that, you’ll want to conduct research on those individuals – see what kind of work they’ve done in the past, and read testimonials about the service they provide. Members who ar not in good standing cannot keep their CAAMP designations, so this is a great reference and tool for first time buyers looking for an experienced mortgage broker.

One of the first things you’ll want to ask your potential mortgage broker is how much access to lenders they have. Most brokers say they have access to all lenders but that’s not always the case. Asking how long a broker and their company have been in business is also a good idea: the longer the company has been active and with a good reputation, the more likely the broker has established relationships with a wide variety of lenders and are more capable of dealing with those lenders on behalf of their clients.

Good bankers and mortgage brokers will ask questions to identify if the mortgage product that’s being obtained is really the best product for the buyer. They should be asking whether the product fits with your short-term and long-term goals, and if it’s going to provide you with the terms and conditions you need to maintain your cash flow and lifestyle.

In addition, a good mortgage specialist should ask about your income: do you get a salary every month, are you subject to commissions, do you think you might be transferred, are you planning to move, what sort of flexibility does your budget allow you for an increase in interest and payments, etc. A good interview with a good banker or mortgage broker will be at least one hour of questions to find out all of your wants and needs when it comes to the mortgage.

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Expert Advice: Real Estate Lawyers

Buying a home can be an intimidating process, so it’s important to have the right people around you to answer any questions you might have along the way. Finding the people you want to work with can make a huge difference to your level of understanding and comfort when purchasing a home.

Real Estate Lawyers

You’ll require the services of a lawyer to protect your legal interests, such as ensuring the property does not have any liens or charges. A lawyer will review all the contracts before you sign them. You’ll also want your lawyer to review your offer to purchase so that you understand what you’re getting into and are able to negotiate the terms.

Lawyers have the knowledge to be able to insert provisions that will protect you. For example, if you’re buying a new single-family home, you want to make sure you don’t have a storm drainage system running through your backyard that’s an easement. A standard agreement allows developers to do whatever they need for the development. However, a lawyer would know to put a clause in that would prevent that from happening.

Regardless of what you purchase, it’s important to have your lawyer put in the offer to purchase that the agreement is conditional upon their review and approval. If you don’t have the clause in the agreement and you have the lawyer review it after you’ve signed, it’s too late. 20% to 25% of first time home buyers use a lawyer only to close the deal, and not while drafting the offer to purchase. Some people would rather save on legal fees and figure it’s a standard agreement, so a lawyer review isn’t really necessary. The truth is every agreement is different, and some newer properties will even have hidden charges that can be missed by people who haven’t been trained in the legal profession.

You wan to make sure you know what you’re buying and you know what your costs are so there are no unpleasant surprises at the closing.

Recommendations are probably the best way to find a good, experienced real estate lawyer. But it is important to do some of your own research and find out what organizations they’re affiliated with and what work they’ve been doing more recently. Law associations can refer you to a lawyer who specializes in real estate or condominiums, specifically, and you’ll want to hire a more experienced lawyer if you’re buying a condominium because the closing process is lengthier.

When deciding on a lawyer, it’s important to find out how available they are, and if they’re willing to educate you. As a first time homebuyer you will have more questions and won’t fully understand the process, so you will very naturally require more time. This should be done over the phone, as most lawyers charge by the hour, so it could be costly to pay for each consultation.

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Expert Advice: Real Estate Agents

Buying a home can be an intimidating process, so it’s important to have the right people around you to answer any questions you might have along the way. Finding the people you want to work with can make a huge difference to your level of understanding and comfort when purchasing a home.

Real Estate Agents

When buying your first home, your Realtor is going to be a key player on your team. They’ll help you find a home, write an offer to purchase, and negotiate the price. But they’ll also act as a guide throughout the entire home-buying process. A knowledgeable Realtor should have an in-depth understanding of the market, familiarity with all neighbourhoods in their region, and can often refer you to other people you’ll need to build your team.

Realtors hear the good, the bad and the ugly when it comes to other service providers a first-time buyer will need to work with. They know who to stay clear of and who has a fantastic reputation.

Because your Realtor will be instrumental in helping you find your first home, it’s important you and your Realtor have chemistry, like any other relationship. They are someone you need to feel comfortable with and have a tremendous amount of trust in. Not all personalities work well together, so you’ll want to find someone who is willing to work as part of a team, with and for you.

It’s a good idea to “test drive” a few Realtors by going out and looking at a few houses very casually and ensuring you’re comfortable working with the Realtor. If that doesn’t suit your schedule, the same rules can apply by phone. Because first-time buyers often take a lot more time than other buyers, you need to ensure the Realtor you choose will be able to give you the time you need. Ensuring they are patient and even looking to build a long term relationship are qualities to look for in your agent.

When you’re interviewing Realtors you should ask them how much time it should take, how familiar they are with the area they’re looking at, what resources they have for first-time buyers, and if they can provide testimonials. A Realtor who has good reputations with clients should have no problem providing these.

A good Realtor will ask if you’ve been pre-approved, what sort of house you’re looking for, which neighbourhoods you’re interested in, how many people are going to be living in the home, where each member of the household works, if you have any kids, what kinds of hobbies or sports they do, if anyone works from home, what your future plans are, and whether they’re looking for a house that can adapt to those future plans.

So now that you know what to look for in a Realtor, where do you find one? There are thousands of Realtors to choose from; that’s why referrals or recommendations are a good place to start. Speak to family members, friends or co-workers who have had a great experience with their Realtor, then meet with them to see if they’re a good fit for you.

First time homebuyers should look for experienced Realtors, who they feel confident will negotiate a good price on their behalf. It’s also important to many people to have a Realtor who you feel genuinely cares about your purchase and your future. A great Realtor doesn’t necessarily have to be someone that’s been around for 20 years: someone who’s brand new on the job could give you 150% of him or herself and might be aware of the market and city as much as someone who’s been around for a long time.

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Healthy Housing

Research has shown that your housing choice can have a direct impact on your health and that of the environment. When considering a new home or condominium, be aware that some developers are now offering buildings that have been designed to minimize energy use through improvements to wall insulation, the quality of windows, and heating and cooling equipment efficiency.

Not only does this save energy and minimize harmful environmental emissions, it also saves you money now and in the long run.

Developers are also becoming aware that the materials and systems they construct their buildings with can have impacts for your health. For instance, a building designed with a ventilation system for your unit, one that distributes fresh air directly to all rooms and exhausts air from the kitchen and bathroom, can greatly improve the quality of your indoor environment.

Similarly, be aware that materials and finishes used in the construction of your home or condo can have an impact on the quality of your indoor air. Note also that the commuting distance between your home and workplace will have a significant impact on energy use and your budget.

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Benefits of Buying New Homes

For the vast majority of Canadians, home ownership is an important goal – something they dream about, plan for and enjoy achieving. Today’s new homes offer greater value than ever before. If you are considering a home purchase, you owe it to yourself to explore the benefits of buying new.

Everything is new.
It is hard to describe the feeling of “new”. Simply enjoy it – along with the knowledge that everything is chosen by you to fit your lifestyle and your preferences.

Totally up-to-date construction.
A brand new home is built to the latest codes and standards, using modern building practices, products and technologies. For you, that means solid, lasting quality throughout – both what you can see and what you cannot. Energy efficiency to keep your costs down. A comfortable living environment. A home that’s easy to take care of.

Financial predictability.
Buying new makes it easier to manage your household budget. You know what your fixed housing costs are, and you do not have to worry about sudden expensive housing repairs or replacements for many years.

After-sales service.
Once you are in your new home, you still have back-up: your builder is only a call away if you have any concerns or questions. Professional builders have a customer service program and established follow-up processes, and will tell you clearly what to expect after move-in.

Warranty.
Professional new home builders provide a warranty on their homes, which is a great reassurance for new homebuyers. In addition, many of the products used in the home are warrantied by the manufacturers beyond the lifespan of the builder’s warranty.

Open The Door To Your New Home

Get the facts and consider whether you want to purchase a new home instead of a resale home, and you could enjoy the long-lasting benefits of a brand new home, today and for a long time to come.

When you are ready to purchase a new home, one of the first steps is to take a close look at the builders in your community. Who you buy from can be almost as important as what and where you buy. In fact, some would say it is even more important!

Your new home buying experience and your satisfaction with your new home rely on finding the right builder. The web site of your local Canadian Home Builders’ Association is a great place to begin. Use the “Find a Member” tool to get the names of professional new home builders in your community. Many members have links to their own websites so you can quickly get a first impression of the whole company, the types of homes they build, and their range of services. This will help you zero in on builders that are a good fit for you and your family.

When visiting builders’ websites, look at the homes and the communities they are building in and note what else they tell you about their homes, their values, services, experience and so on. If you like what you see and read, take the next step and visit the builder’s model homes or call them for an initial discussion.

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