The Choice to Buy
Buying VS Renting – Your Options
Before you set out to purchase a home it is important for you to know if buying is the best option for you. Below are some points to consider when making your decision.
FREEDOM FROM RENT INCREASES
With a fixed-rate mortgage like most homeowners have, your payments of principal and interest remain the same for the entire term of your mortgage. You no longer have to worry about increasing rents that will continue to escalate.
BUILDING EQUITY FOR THE FUTURE
Rental payments are gone once you have made them. That money is never seen again. But, with each mortgage payment you are buying something tangible, making an investment and building equity in your home. The longer you own your home typically the larger the equity.
KEEPING UP WITH INFLATION
Owning your home helps you keep up with inflation. Real estate has historically kept pace with and usually appreciates faster than the rate of inflation. This makes owning a home one of the very best financial investments that you can make.
SECURITY FOR RETIREMENT
Eventually your mortgage will be paid leaving you living rent-free for your retirement.
PAY BACK ON IMPROVEMENTS
A renter gets no benefit from any of the improvements that they make on the property. As a
homeowner you can realize some or even all of the cost of the improvements that you have made when you sell your home.
AVAILABILITY OF RENTAL ACCOMMODATIONS
Vacancy rates are extremely low in the South Okanagan often making high quality rental accommodations difficult to secure.
When living in a neighbourhood that is filled with homeowners like yourself you will find that they too care about and have invested in their property. They, like you are willing to invest time, money and effort into the care of their property, which ultimately improves the value of your own.
IT WILL BE YOURS
When owning your home there are no more restrictions that renters must face. You can paint the walls any colours, hammer nails into any wall and make any improvement or renovations that you would like which enhance your lifestyle.
The purchasing of a new home is an exciting and wonderful time in your life.
Whether you are looking for your first home, looking for something larger or smaller, looking for a place to enjoy your retirement or for that very special recreational property you are embarking on a journey that will create memories for you and your family.
Your family has certain needs and your new home must meet those needs.
It is important for you to know and share with us what matters most to your family so that we can find your perfect place.
Buying a home is exciting but it can also be a bit overwhelming. Inside this guide you will find useful information designed to be a resource to you and help you be prepared for the process.
Some things you may already know… others will be new to you. It is our job to assist you and guide you through the process so that we can avoid the most common pit falls. One of our most important tasks is to educate you to the process so that you can make the most informed of decisions.
RE/MAX® knows that selecting a home is one of the most important decisions our clients make in their lifetime. We approach this task with care, sensitivity and knowledge.
Your happiness is of utmost importance to us. It is our hope that at the end of this process you are so pleased with our services that you become a client for life and consider us a valuable resource for all things related to your home. Rest assured that we are here for you every step of the way.
Enjoy Your Journey!
You Have Decided to Buy
Using A Real Estate Agent
When real estate agents work with Sellers and Buyers, often an Agency relationship is established.
As a Buyer you have two options when choosing an Agent.
1. You can use a Buyer’s Agent who is your representative throughout the process. Your Designated Buyer’s Sales Agent is fully committed to you, protects your best interests and negotiates on your behalf to get you the best possible deal.
2. You can use the Listing Agent who will provide you with honest information but is not expected to take care of your interests nor give you advice. The Listings Sales Representative looks after the best interests of the Seller…
The following chart outlines to you the benefits of using a Designated Buyer’s Sales Agent.
CLIENT VS NON-CLIENT
SERVICE CLIENT NON-CLIENT
Give advice and counsel X
Keep bargaining and financial position confidential X
Negotiate best price and terms X
Point out reasons not to buy X
Disclose all information that improves your
bargaining position X
Prepare offers favourable to you the Buyer X
Show listed and unlisted property X
Give advice as to the price you should offer X
Arrange showings X X
Assist with financing X X
Provide accurate information X X
Explain forms and agreements X X
Your Financial Position
Before you begin looking for your home, you need to determine your financial position so that you know how much you can spend on your home. The following is a list of things that you need to look at and determine before you can begin searching for your dream home.
Determine the price range of homes that you can afford and how much money you can use as a down payment.
Get pre-approved for a mortgage and have a credit check done for the best rate in the market at no cost.
Be prepared for the deposit which must be given upon subject removal or in some cases upon signing of offer.
Some other financial areas you may wish to consider:
PRE-APPROVAL: Many financial institutions offer a pre-approval service that tells you in advance the amount that they are willing to lend based on your income, down payment and any debts that you currently have.
This way you will be able to view homes that match your budget and affordability.
GROSS DEBT SERVICE (GDS): The normal banking system allows buyers to use up to 32% of their gross monthly income towards housing costs, which includes mortgage payments, taxes and heating costs. If the property to be purchased is a condominium then half of the monthly maintenance fees must be included.
TOTAL DEBT SERVICE (TDS): In order to get a more accurate estimate of what you can afford, TDS takes into account any additional debts that you owe (car payments, credit cards etc…). No more than 42% of your gross monthly income can be used for housing costs and other debts.
Remember that your comfort with your monthly payments is more important than qualifying within the guidelines of a financial institution. Take time to create a detailed budget to ensure that what you are comfortable paying is in line with what the system allows.