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Tips for Buying a Property: Five Errors to Avoid

In light of the real estate market's expansion, RE/MAX wishes to inform new buyers looking for a house, condo or other propertyof the choices they must make with regard to mortgage loans and pre-purchase inspections.

1. Inadequate Mortgage Loans

Mistakes made when selecting a mortgage loan can prove costly and impede your lifestyle.

Like most people, you are probably unaware that there exists a simple way to calculate the monthly amount you can dedicate to a house, condo or other property while maintaining your lifestyle. Often times, brokers set this amount using the gross debt service (GDS) ratio. Besides your property's base cost, you must also consider real estate transfer rights, notary fees and moving expenses, as well as plan for additional funds in case of emergencies.

2. Failing to Secure Pre-Authorization on a Mortgage Loan

Many sellers will demand that potential buyers secure a pre-authorized mortgage loan. If your dream house is subject to several competing offers, such pre-authorization may give you an edge. Please note that this process may take several days once you've submitted the required information to your financial institution, such as proof of income and your down payment amount.

Should you meet all criteria stipulated by your lending agency, it will then provide you with a written pre-authorization. According to the Canadian Mortgage and Housing Corporation, said pre-authorization is subject to deadlines and does not guarantee the issuance of a mortgage loan.

3. Ignoring One's Basic Needs

Many future buyers don't always know exactly what they're looking for when they buy a house, condo or other property. You must take into account all amenities offered by the target neighbourhood, especially when leaving the city for the suburbs. For example, what is the walking distance to grocery stores, schools and banks within the area? While this is an important factor among many house and condo buyers, it is often overshadowed by the excitement surrounding the amount of bathrooms in a given house or the huge rooftop terrace above a condo. You should definitely write a list of your priorities, keeping in mind your day-to-day and family needs.

4. Foregoing a Pre-Purchase Inspection of Your Future Property

You should always conduct your own pre-purchase inspection, even if the seller proposes that you consult the report produced following a previous pre-purchase inspectionor other buyers are lining up to submit a promise of purchase on the property you'

Upon submitting a promise to purchase, make sure that a qualified inspector bound by the proper requirements will perform a thorough pre-purchase inspection of the property in question. All things considered, this initial investment of a few hundred dollars could end up saving you several thousand down the road.

5. Negotiating with One's Heart

Buyers and sellers often let their emotions override their reason. Indeed, feelings may impede negotiations. Unwittingly, sellers may attribute real value to their memories, which don't have any financial value among buyers. One must strive to remove all feelings from the equation.


RE/MAX, Québec's Highest Performing Network of Real Estate Brokers

The benefits of working with me for the purchase

Informed

To be informed, at all times, of the new products available on the market without having to spend hours on internet;

Access

Having access to comparable sales in the drafting of the promise of purchase and thus know the true value of the desirable property;

Expert

Get advice from an expert who also analyses the data made available;

Third party

Receive well lit objective opinions of a third party, to avoid getting carried away at first sight or turn down a good deal on account of something non-substantial;

Service of a professional

Secure the services of a professional, ability to advise you on the terms to use when writing the promise to purchase;

Negociator

To have an experienced negotiator at your side who knows the pitfalls to avoid when presenting a promise to purchase, more so in the presentation of simultaneous promise to purchase.

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