I love Mark's insightful articles, here is another one:
Last week I wrote about six important things that will ensure you buy the right
house at the right price, using your head, rather than your heart.
Here are five more things to keep in mind.
1. Understand bidding war rules
The main reason you overpay is panic while you are caught up in a bidding
war. In advance, find out first what the house should sell for. Many sellers
deliberately list for a price below market to attract a lot of buyers. Do not tip
your hand. If you give your offer too early in the day, the seller’s agent will call
everyone to try and encourage a bidding war. Bring in your offer around 7 pm
and make the irrevocable period no more than four hours. Put the pressure on
the seller, not on yourself.
2. Ask the seller hard questions
Ask the seller or the sellers agent if they know about an problems with the
house, things like basement flooding, mould or roof leaks, even if the leaks
have been repaired. Then ask if they know about the neighbourhood that would
have an impact on your purchase. Tell them you are relying on this information.
Watch how they answer. Most sellers will refuse to sign property disclosure
statements, but they are required to respond truthfully to these questions if you
ask them directly. If the seller refuses to answer or acts suspiciously, then you
need to discuss this with your home inspector and your real estate agent and
either adjust your purchase offer or walk away.
3. Basement apartments must be legal
If the home contains a basement apartment and the income is important to
you, make sure that it complies with zoning and the fire code by-laws. If it doesn’t, then all it takes is one complaint from a neighbour and you may be
forced to spend thousands of dollars to make it comply after you buy.
4. Check about your insurance premium early
Find an insurance agent right away and if possible, check what it will cost to obtain insurance as soon as you sign your agreement and before you waive
any conditions. An insurance agent can check the history of claims in the neighbourhood and can let you know about claims for sewage back-ups or
vandalism. This is important information that any buyer should have before deciding to waive their conditions and complete the deal.
5. Look into after sale warranty protection
More companies are entering this market, where for a fee of up to $500 per year, buyers can obtain after sale warranty protection on their furnace, air
conditioning, electrical and plumbing systems as well as on all major appliances. This is needed since no seller will warrant these items after closing.
Check out the deductibles and what may be excluded from coverage under these policies as they are all different, yet they can provide peace of mind and
only one number to call when you have a problem later.
If you follow these simple steps and buy with your head instead of your heart, chances are you’ll get the house you want at a price you can afford, with no
unwanted surprises later.
Mark Weisleder is a lawyer, author and speaker to the real estate industry.