Alvina Usher - A GUIDE TO BUYING A HOME IN OTTAWA

A GUIDE TO BUYING A HOME IN OTTAWA

A GUIDE TO BUYING A O BUYING A HOME IN OTTAWA

Alvina Usher

Table Of Contents

10 Steps To Buying A Home In Ottawa I Would Like To Share With You The Benefits Of Experience And Advice:

Owning Vs. Renting

Buyers' Needs And Desires

Real Estate Horror Stories To Learn From 37

Buying A Home Is An Exciting Event, But The Process Of Finding The Right One Can Be Daunting. It’s A Major Investment. It’s An Emotional Time Of Making Lifestyle Decisions. It Isn’t Like Buying A Pair Of Shoes From The Department Store That Are A Bit Snug, Because You Can’t Just Return The House If You’re Not Satisfied. Once You Buy, You’re In For The Long Haul. To Avoid Costly Mistakes That Could Haunt You For Years, You Need To Make Sure You Do Your Homework Properly When House Hunting. VIEWING A HOME For Most People, The Prospect Of Going To View Homes They Like Is A Thrilling Experience. It’s Tempting To Think That This Is The First Step To Buying A Home, But It’s Not. Assuming You Have Your Down Payment, Mortgage Preapproval, And Other Financial Issues Handled, The First Thing You Need To Do Before Viewing Any Home Is To Determine What You’re Looking For. What Is Your Criteria? Do You Need A Certain Number Of Bedrooms And Bathrooms? Do You Want A Yard? Is A Separate Garden Area Necessary To Your Lifestyle? Do You Want Property Only In Particular Neighbourhoods? How Much Are You

Willing Or Able To Spend? Answering These Questions Will Save You Significant Time And Effort In Running Around To View Homes That Don’t Suit You. Once You’ve Decided Upon Your Criteria, Call Your Real Estate Agent. Let Them Know What You’re Looking For And What Your Price Range Is. They Will Get To Work On Your Behalf, Shortlisting The Properties That Meet Your Criteria So You Can Start Your Viewing From There. Then Comes The Fun Part: Finding That Perfect Home You’ve Been Dreaming Of! SCHEDULE ADEQUATE TIME When Going To View Homes, Make Sure You’ve Got Plenty Of Time To Really View The Home From A Critical Perspective. Schedule Enough Time To Do A Proper Inspection. Look Into All Closets And Crawl Spaces. It’s Possible You Will Be Living There For Years To Come, So Five Minutes Strolling Around Is Not Going To Be Adequate To Form An Opinion. Two Hours To View Your Potential House Is An Appropriate Calendar Entry. Research Suggests That When Buyers Spend A Longer Time Viewing A Home, They Are More Likely To Pay Below The Asking Price. BE THOROUGH Related To Scheduling

Adequate Time To View The Home, Be Thorough When Checking It Out. Open Drawers, Cabinets, And Cupboards. Look Behind Furniture, And Even Under It To Find Stains Or Signs Of Wear Not Readily Evident. Lift Up Rugs, If Necessary. While This May Seem Rude, It’s Not. You’re About To Make A Substantial Investment And You Need To Know Exactly What You’re Getting. An Artfully Positioned Chair Could Be Hiding Something, So Feel Free To Look Where You Need To. Of Course, If You’ve Dismissed The Home From The Start, Do Only A Minimal Walkthrough Or Don’t Bother With The Inspection At All. But If The Property Has Potential And Is Something You Like, Open Every Door And Look In Closets. WHAT COMES WITH THE PROPERTY? Confirm What Comes With Home — E.g., Whether The Stands Or Fixtures Are For The Exclusive Use Of That Home Or If The Owners Will Remove Them. Are Appliances, Such As Refrigerator And Washer/ Dryer, Included In The Sale? Make Sure To Get Confirmation In Writing If You Decide That You Would Like To Buy The Property. DON'T BE FOOLED BY STAGING Sellers Use Clever

Tricks To Make A Home More Appealing. They Can Strategically Light A Room To Draw Attention From A Problem Or Apply Fresh Coats Of Paint To Cover Water Damage Or Mold Issues. While You’re Viewing The House, Look Beyond The Immediate Aesthetics Of The Interior Décor. Focus Your Attention On What You’ll Get When The Furniture And Interior Décor Are Stripped Away. KEEP EMOTIONS AT BAY When Viewing A Home Initially, Try Not To Get Attached Immediately. Keep Emotions Out Of Considerations And Only Consider The Potential Property As A Building You Need To Inspect And Assess For Others. Rapid Emotional Attachment May Cloud Your Decision-making, Or Allow You To Overlook Failings In The House You Might See Differently Without An Emotional Lens. If You Get Attached From The Get-go, You Might Make An Emotional Decision And Overlook Major Problems. Certainly, An Emotional Attachment Will Affect Your Ability To Calmly And Dispassionately Negotiate. VIEW MULTIPLE TIMES If You Have Found A Likely Prospect That Strongly Interests You, View It Multiple Times. You’re More Likely To Identify

Potential Problems If You View It Several Times At Different Times Of The Day. You’ll Also Glean Knowledge Of The Neighbourhood At Various Times. Is A Street That’s Not Busy In The Late Morning A Commuter Route In Early Morning And Mid-afternoon? This Way, You’ll Know What Traffic Is Like In The Area And The Noise Levels That Occur At Different Times. CONSIDER THE OVERALL CONTEXT When Viewing, Don’t Just Consider A Property On Its Own; View It In The Context Of Its Location. What’s The Area Like? Is The Property Adjacent To A Train Track Or Noisy Intersection? Is There A Pub Or Restaurant Close By That Gets Noisy At Night? How Close Are You To The Things You Might Need, Such As Schools, Public Transit, A Grocery Store, Or Hospital? These Are Important Questions To Consider When Viewing Properties, As They Can Add Or Subtract From The Overall Enjoyment Of Your Home. LET YOUR AGENT DO THE JOB Don’t Go Viewing On Your Own. There’s A Security Factor In Traveling To Unoccupied Houses Alone. Additionally, There Are Other Ways This Makes You Vulnerable. A Seller’s Agent Might Think

You’re Unrepresented And Attempt To Take Advantage Of You. Let Your Realtor® Do The Job. If You Come Across A Property That Interests You, But Your Agent Hasn’t Told You About It, It Might Not Meet All Your Criteria. If You Think You Want To View It, Give Your Agent The Address And Phone Number. Your Agent Can Then Arrange A Proper Viewing For You, Together, Without The Owner Being Present. THE CONDITION OF THE PROPERTY In Assessing A Home For Potential Purchase, There Are Important Items To Be On The Lookout For — The Primary One Being The Condition Of The Property. Is The Home Structurally Sound? Walk Around The Interior Of The Home, Checking The Walls And Ceilings For Cracks. Hairline Cracks Are To Be Expected In Some Places. Check The Exterior For Cracks. Cracks Could Be A Sign That The Property Isn’t Structurally Sound. Points At Which Extensions Join Are Places To Look, As Cracks Often Occur There. Also Look For Loose Or Broken Tiles On The Roof Or Broken Guttering, Evidence Of Damage To The Drywall And Weaknesses On The Floors. It’s Acceptable To Ask How Long It’s

Been Like That, And Whether It Will Be Fixed. If You See Major Cracks Or Bowing Walls, Have A Structural Engineer Assess The Situation. Look (And Smell) Closely For Evidence Of Mold. Mold And Mold Damage Are Major Problems That Will Cost You A Lot To Clean And Repair. Don’t Just Look For It — Use Your Nose As Well. Mold Frequently Gives Off A Musty Smell, Even When There Are No Visible Signs. Inspect All Crawl Spaces, Basements Area, And Walls. Plaster That’s Flaking, Watermarks On Walls Or Ceilings, Or Even A Fresh Coat Of Paint In Part Of A Room Could Be Indications Of Mold. Don’t Overlook The Ceiling And Around The Skirting Boards Properly For Evidence Of Leaks Or Water Damage. Ensure Heating, Air- conditioning, And Electric Is In Good Working Order. Other Aspects To Consider When Looking At The General Condition Of The Property Are The Heating And Air Conditioning Systems. Have An Expert Assess That They’re The Appropriate Models And Capacity, And That They’re Working Properly. Check The Electrical Panel. It Shouldn’t Be Old Or Outdated, Must Be Easily Accessible, And In Good Working Condition. Ensure Wiring

Was Done Properly. You Don’t Want To Spend A Fortune Rewiring The Home To Bring It Up To Standard. Consider If There Are Enough Power Outlets And If They Are In Good Condition. Inspect Basements And Attics. Check The Attic For Water Leakage Issues. Look For Water Damage Or Leaks That May Have Affected The Insulation, Walls, And Ceiling Of The Attic. Make Sure The Insulation Is Adequate For Where The Property Is Located. In The Basement, Look For Evidence Of Moisture Problems. Is There Water Leaking Onto The Floor Or Water Around The Foundation? There Should Be No Cracks In The Basement Walls, And Any Wood, Such As Those In Exposed Beams, Should Be In Good Condition With No Rot. Look At Pipes And Turn On Taps. Check That The Plumbing Is Up-to- date. Run Taps To Ensure They Work Properly And The Water Pressure Is Strong Enough. Exposed Pipes In Unheated Areas Should Be Insulated, As Frozen Pipes Will Eventually Cause Water Damage. It’s Particularly Important From A Health Perspective To Determine That The Pipes Aren’t Made Of Lead. If They Are, You’ll Have To Replace Them. Also, Check The

Age And Condition Of The Hot Water Heater. Is The Exterior Of The Home In Good Shape And Well-maintained? Check For Evidence Of Water Around The Foundation, Which May Indicate Drainage Issues. The Ground Should Slope Away From The Foundation. If There’s A Porch, It Should Have A Foundation, Not Simply Sit On Soil. Check That Driveways And Walkways Leading Up To The House Don’t Have Cracks And Aren’t Crumbling. Check That The Siding Of The Home Is In Good Repair. Look At The Landscaping On The Property. It Shouldn’t Be Unkempt And Unsightly, As That Can Indicate A Lack Of Care. The Sprinkler System, If There Is One, Should Be In Proper Working Condition. If There’s A Deck, Ensure There Is No Decay Or Damage From Termites Or Beetles. PROPERTY HISTORY It’s A Good Practice To Know All That You Can About The Sales History Of The Property You Have Under Consideration. Don’t Simply Settle For The Information Contained In The Customer Copy Of Listings. Ask Your Agent For More Detailed Information. Find Answers To How Long The Property Has Been On The Market And Whether It Was Previously Listed,

Withdrawn, And/Or Relisted For A Lower Price. These Kinds Of Questions Can Help You Decide How Much To Offer. You’ll Also Need Detailed Information On The Property, Most Of Which Will Be Available From The Public Records. A Bit Of Research Online Will Disclose The Name Of The Owner, Original Age Of The Home, Mortgage History, Parcel Number, Previous Sales Of The Property, Property Deeds, And Any Judgments Or Liens Filed Against The Seller. Information About How Much The Property Taxes Are, And Whether They’re Paid Or In Arrears, Will Also Be Available In The Records. You’ll Also Be Able To See If There Were Permits Obtained To Make Improvements On The Home. These Permits Could Complicate The Sale Of The Property If Liens Were Attached By Workmen Or Improvements Were Not Done Up To Code. Don’t Skip This Search Because It Reveals Important Information About The Property In Which You’re Interested And Could Save You Money. You Can Get This Information Through Your Agent, Since Most Agents Subscribe To Services That Give Them Access To Such Data. If You’re Not Using An Agent, You Can Obtain

This Information Through A Local Lawyer Or Order Online For A Small Fee. MAKING THE CHOICE Once You’ve Done All Your Homework, You Need To Decide Whether To Buy The House. It’s Important That You Step Back And Evaluate All The Information Available To You From Viewing The House, Inspecting Its Condition, And Obtaining Public Records. Keep In Mind: You Will Likely Need To Compromise On Some Of Your Priorities. No Home Is Completely Perfect, And A First Home Is Often A “Starter” On The Way To A Dream Home. However Well It Fits Your Needs, Desires, And Lifestyle, There Will Be Things You Wish You Could Change. Examples Might Include Wishing The Home Was Facing The Lovely Park You Saw Nearby Or In Another, Fancier Neighbourhood. At The End Of The Day, You’ll Need To Decide The Factors That Are Most Important To You. If You Prefer The Neighbourhood Over The House, You May Decide To Look For A Different Type Of Property Within The Same Community. A Condo, For Instance, Instead Of A Townhouse. If Finances Are The Issue, You Might Want To Discuss With

Your Bank Whether They Would Be Willing To Increase Your Mortgage. But Use Caution, And Only Do This If You Can Afford It — There’s No Point In Getting Into Financial Trouble Just To Get A Specific Property, When More Affordable Ones Could Do Just As Well. Lower Your Expectations On The Condition Of The Home. If Your Inspection Revealed A Few Small Problems, You Could Still Buy The Property And Do The Repairs Yourself. Use The Problems As A Bargaining Chip To Get A Reduced Price From The Seller After Getting A Quote From A Professional For The Cost Of Repairs. Don’t Estimate Based On Your Judgment, And Don’t Let The Seller Decide How Much He Thinks It Will Cost. Ask A Professional Yourself. Also, Don’t Let The Seller Get The Quote. Be Prepared To Walk Away. This Echoes Our Earlier Point About Not Getting Emotionally Attached Until You Have Bought And Moved In. If, At The End Of The Day, You Find Out The Compromise Required Is More Than One You’re Prepared To Make, Just Walk Away.

Buying A House: Negotiation Dos And Don'ts 73

What To Know About Home Inspections

Shopping For A Home Loan

Organizing Your Move

Introduction Hi there! It’s nice to meet you. If you’ve received this book, it’s probably because you’re thinking about buying a home. And if you’re like most home buyers, you may be nervous about the entire process. But that’s why I’m here! My job is to make your job as a buyer as easy and seamless as possible. Throughout my years of experience in the real estate industry, I’ve amassed insider knowledge to help home buyers get great deals on their home purchases. And now, you’ve got all of that information at your fingertips.

In this book, you’ll find:

• An overview of Ottawa History and Neighbourhoods • An overview of the buying process • How to determine your wants vs. needs in your next home • Information on securing a home loan • Common mistakes to avoid • A negotiation guide to save money on your purchase • And much, much more Sure, you can try to employ these strategies yourself, but you should know that it costs you absolutely nothing to hire me to help you find your next home. Yes, buying a home can be stressful, but with this book (and my help!), we can make the process as seamless as possible.

Alvina Usher, Realtor Details Realty Inc. Brokerage

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About Alvina Usher vina Usher Before starting real estate career Alvina Usher managed her own corporation providing IT Products and Services to the Federal Government and Educational Organizations. Alvina Usher is the Gartner Award Winner for IT Vision in North America. Today for more than 10 years she is helping her clients to reach their real estate goals. Expert in planning and integration of new clientele. Adept in contract drafting, market research, networking, negotiation, and client analysis. Constantly developing social media marketing and adding new sales techniques to her portfolio. She is active member in a variety of Ottawa multicultural communities, bringing people together from different cultural backgrounds. Alvina Usher has thousands of followers on social media, she is also organizing\managing Multicultural Festivals in Ottawa and many other multicultural and charity events. People always recognize her strengths and leadership. Carolyn Piche, Director of Business Development, The Rotary Home Foundation says: “Every now and again, if we are fortunate, an extraordinary individual enters our lives. Those of us who have worked with you know you are one of those people. You have the ability to see beyond the surface to find treasure in people and organizations and surround yourself with others who share quality. …when some may have offered support and walked away, you drew support of others. When support wandered you drew us back into your circle of influence. For the past four years you offered us a voice to be heard by those who would may not listened…”

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Mission

Alvina Usher is dedicated to making life easier for her clientele. Whatever they need, she is two steps ahead in ensuring that their requirements are met. BUYING or SELLING Consider it DONE has being her slogan for the last 10 years. Her goal is to BUY FOR LESS and SELL FOR MORE. She will show you as many houses as it will take to find your dream home and will support you every step of your journey. This story perfectly sums up the kind of agent Alvina Usher is, and the type of agent she continuously strives to be for her clients. Alvina Usher was taught at a young age that if you want something in life, you have to work for it. So that’s what she did. And she worked hard. Alvina Usher was raised in Odessa, Ukraine , on the shores of a beautiful Black Sea and moved to Canada in 1994. She is the only child in the family, she had aspirations of being a musician. Never in a million years did she think she’d stumble into the real estate industry, but you can’t always predict where or when you’ll discover what you’re meant to do in life. As the years went by, Alvina Usher worked her way from wedding singer to managing her IT solutions corporation. Never wavering in her resolve to become the best version of herself with each career move. Alvina Usher got into the real estate industry more than 10 years ago when she fell in love with real estate market by managing her own investments . She made the decision to retire from corporate business and start a new career in real estate. She set out goals to become the best advisor for her clients in buying

and selling real estate.

Her aspirations are SELL for MORE and BUY for LESS. r LESS.

As her career advanced, Alvina Usher found her stride working in residential and condo sales. She is an expert in residential urban and rural sales. Alvina Usher lives in Ottawa, Ontario with family and beloved doggy Max, a small schnauzer with a big ego. In her free time, she enjoys boating, snowmobiling, gardening, cooking, photography and videography. Alvina Usher aims to provide the highest level of service to her clients and takes deep pride in helping them achieve their real estate goals.

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CHAPTER 1 10 Steps to Buying a Home in ying a Home in Ottawa

I would like to share with you the benefits of experience and advice:

Step 1. Saving for a Down Payment

Being in a strong enough financial position to put money aside for a down payment is the first and most important step to being on the road to home ownership. In Ontario, you will need to have at least a 5% down payment for purchase prices under $500,000. For houses between $500,000 and $1,000,000, your minimum down payment is 5% on the first 500k, and 10% on the remaining amount. Finally, for houses over $1,000,000, your minimum down payment is 20%. • Purchase Price Minimum Down Payment (% of Purchase Price)Under $500,0005%$500,000 – $999,9995% of the first $500,000, then 10% of remainder$1 Million and up20% • Having a large down payment of at least 20% in any circumstance will allow you to have added flexibility on your home-buying journey. It will also save you thousands of dollars on both interest payments and from not needing mortgage insurance. The latter can especially add to your overall cost, with the following CMHC premiums applying in most situations: Down Payment (% of Purchase Price)5-9.99%10-14.99%15-19.99%CMHC Insurance (% of Mortgage Amount)4.00%3.10%2.80% With Ottawa’s average sale price increasing to over $750,000 in $750,000 in 2021, and with prices rising throughout Ontario in tandem, starting early-on in building a down payment can be crucial. Luckily, if your a first-time home buyer, the federal and provincial governments have programs in place to help, including: • The Home Buyers Plan, allowing you to borrow up to $35,000 from your Registered Retirement Savings Plan (RRSP) for a down payment, • The First Time Home Buyer Incentive, with the Government of Canada offering up to $25,000 in shared

home equity, and • Provincial and Municipal Land Transfer Tax rebate, covering up to $4,000 in Ontario. Step 2. Building Your Credit Score & Having Stable Income With your credit score being an important tool that lenders use in evaluating your creditworthiness, building it up is a crucial part of obtaining a mortgage for your home purchase. Ideally, in order to meet the credit score requirements for obtaining an insured mortgage loan, your credit score needs to be at least 600. Besides needing a credit score above 600 for an insured mortgage, having a higher credit score can also affect your mortgage interest rate, lending options, and the mortgage lenders who are willing to provide you a loan. Building your credit score starts before you even consider buying a home, through taking proactive steps to improve your credit, including: • Avoiding late payments, • Keeping your credit utilization rate, (total debt outstanding divided by your total credit limit across all accounts) low, Along with a good credit score, having a stable income source will make obtaining a mortgage much easier. Owning your own home also means that you will be responsible for expenses that come with it, which can include costly maintenance and repairs, yearly property taxes, and home insurance premiums. Being in a position where your income allows you to face any unexpected • Maintaining a good credit history, and • Limiting credit inquiries on your account issues as they come about puts you in a better position to manage them. In fact, your lender may ask to see a letter of employment to assess your income stability. If your income is less steady because of being self-employed or a contract worker, it's important to plan in advance by setting some money aside as an emergency fund. Also, consider applying for home insurance 3

online.

Step 3. Checking your Affordability In tandem with steps 1 & 2, your down payment amount, along with your credit score and income all go into what you can afford in a home. Housing affordability depends on a number of factors, including: • How large your down payment is, • Your Total Debt Service (TDS) Ratio, which is your annual housing related expenses + debt expenses, divided by your gross income, • Your Gross Debt Service (GDS) Ratio, which is your annual housing related expenses divided by your gross income, and • Current monthly expenses not exceeding after-tax income Understanding not just what you can afford, but how much you are comfortable spending is crucial in finding a home that you can feel good about. Finally, when deciding on how much to spend, putting together a budget can help you to stay on track and to keep up with your monthly housing expenses, for when you do move into your home. Step 4. Determining Where to Buy Once you determine how much you can afford and what you are comfortable spending on a home comes deciding where to buy. Factors such as commute time, public transit, neighbourhood amenities, safety and school rankings tend to be top of mind for many new homebuyers. Being in a catchment area for a good school is a factor that many young families or prospective parents look towards when making their buying decisions. Although very important, it's worth noting the potential high costs of living near some high ranking schools. When it comes to commuting, choosing a location will mean 4

being comfortable in your daily commute. By picking a neighbourhood outside the city to look, you may get more space for your budget, however it may add-on hours to your daily commute. As well, being further away from the city could also make public transportation less feasible, meaning the neighbourhood you choose is something to think long and hard about. Urban homes might be smaller than suburban and rural homes, but they are often more expensive. A quick way to compare locations and to find out where you can get the most space for the best value would be to look at the price per square foot. Step 5. Estimating the Closing Costs Generally, a good estimate of how much to budget for closing costs when buying a house in Ottawa tends to be between 3-5% of the purchase price. The two largest components of closing costs include Land Transfer Tax, and Lawyer & Legal Fees. Land Transfer Tax - Provincial & sometimes Municipal tax on the transfer of property. Calculated using a marginal tax bracket system based on your purchase price. Lawyer & Legal Fees Lawyer acts on your behalf in the purchase and mortgaging of the property. Varies depending on the work; can cost between $500 & $1,500. Other smaller components that will make up your closing cost can also include: • Property Survey - Survey Certificate required by your mortgage provider & lawyer. Between $350 & $600. • Home Inspection - A professional looks for hidden problems in the property before the sale goes through. Varies with property type, usually ~ $500. • Property Appraisal Fee - To confirm the selling price is reasonable for the market (for the mortgage lender).Generally between $300 & $500; lenders may 5

cover the cost however. • Title Insurance - Insurance in case of dispute about who’s land the property is located on.~$200, depending on the insurance company. • Government Registration Fee - Paid when your lawyer files documents on your behalf. Varies by document, in total ~$200; may be included in overall legal costs. • Status Certificate Fee - Certificate with condo board financial statements, your fees, penalties for infractions.~$100 Overall, being aware of what your closing costs may be in advance can reduce any surprises and help you stay on budget. Step 6. Get a Mortgage Pre-approval & Look for the Best Rate Getting a mortgage pre-approval before looking for a home provides the stability of locking in an interest rate for up to 120 days, while providing an estimate on how much of a mortgage you qualify for. A pre-approval acts as a written contract between you and your lender. However, getting pre-approved also does not mean you cannot shop around for rates. More-so, a pre-approval helps you to plan in advance with information on what your mortgage may look like, including how much you can afford to spend, the interest rate available to you and what your monthly payment could look like. When it does come to finding a mortgage lender, searching out the lowest rate can meaningfully save you on monthly interest costs . For example, you purchase a house for $600,000. You paid $120,000 down (20%), meaning you did not need mortgage insurance. You took out a 5-year mortgage for $480,000 with a 25 year amortization, at a 3.2% interest rate after getting pre- approved. This means that you are paying $71,110 in interest over the 5 year period. However, interest rates fall between the time you got pre-

approved and the time you needed the mortgage. There were similar termed mortgage rates at 2.6%. Had you looked for and gone with a similar rate, you would have paid $57,530 in interest instead. By not shopping around for a better rate, you paid an extra $13,580! This shows the importance of always looking for the best rate. Step 7. Find a Good Real Estate Agent Connecting with a real estate agent that fits your needs and has a strong understanding of the market you're looking-in is crucial. Especially for first-time buyers, having an experienced agent can provide much needed clarity in a brand new situation. Step 8. Look for Properties in your Price Range Although it can be tempting to expand your search outward and raise your budget, it's important to continue to look for homes you can both afford and see yourself living in. This search starts online, with websites like your area MLS Page and through what your real estate agent finds to show you. When you're looking at specific properties, it can be helpful to make a list of “must-have” and “nice-to-have” features. This will both help you narrow in the search, and be flexible. Remember, home-buying can be an iterative process; if certain features or neighbourhoods don’t meet your needs or are over-competitive, you can always change your search. Step 9. Make an Offer It's likely your housing search won't end with the first offer. Even in the cheapest places to buy a house in Ottawa and some of the quietest housing markets, demand is making the process very competitive. This makes moving quickly important. When it comes to deciding on offer details, including price and conditions, your real estate agent can be someone you turn to for advice.

Step 10. Your Closing Date! As you reach this exciting and stressful day, it's important to take a deep breath and embrace the moment. Moving into a home is meant to be a big milestone! With you already thinking about your closing costs in step 5, here shouldn't be any unexpected costs. Once the lawyer gives you the keys, the house is yours! As your moving-in, other important tasks to consider include: • Pre-move-in renovations, including painting,

• A full-house cleaning, • Changing the locks, • Informing service providers, and • Letting your family and friends know

Conclusion

Although the whole process may seem at times difficult and stressful, having experienced and knowledgeable contacts along the way is key. Your real estate agent, mortgage broker, and family are all there to support you, meaning it's important to trust the process. As long as you stick to the plan by saving for a down payment, figuring out where you want to buy, getting pre- approval, finding an agent, submitting an offer and closing, the process will work out in the end.

I’ll come right out at the start and tell you I’m a real estate agent — proudly so! Nice to meet you! I’m not trying to sell you anything, but I’m pleased to be of service.

In fact, generally, real estate agents for buyers are paid for out of the listing agent’s commission. So, I’m not looking to part you from your money. Instead, I’m giving you the benefits of experience and advice I have gleaned throughout my career selling houses and being in real estate transactions — for both sellers and buyers. If you want me to help you find a house, we can talk. Call me if you need me. Technology has changed the way homes are sought and bought today. In this “Information Era,” most buyers are first introduced to the home they eventually purchase via the internet, through sites like Prelist.org and Realtor.ca. So that means there’s no real need for a buyer’s real estate agent, right? The reason to use a real estate agent is to find a home and show homes available for sale, right? If a buyer can find and visit a home on the web all on their own, why involve another party?

WHY HOME BUYERS NEED A REAL ES UYERS NEED A REAL ESTATE AGENT

Ah, not so fast, friend. The reasons to use a real estate agent today are as valid as yesterday. The ease of online transactions and proliferation of services to assist buyers in handling their own real estate transactions came about recently, throughout the last decade. This has caused buyers to wonder if using a real estate agent is no longer necessary or if it's an expense that can be avoided. While doing the work yourself can save you money if you buy a “For Sale By Owner” (FSBO) house and the seller agrees to reduce the price by 3% (half of what a listing agent would receive), for many, a do-it-yourself home purchase might be pricier than a real estate agent’s commission in the long run. Besides, a buyer generally doesn’t directly pay any commission to an agent on a house purchase. On most home sales, there is a

listing agent (the agent engaged by the seller to sell the property) and a selling agent (the agent who introduces the eventual buyer into the transaction). The selling agent is sometimes called the “buyer’s agent” because he or she is often working on a certain buyer’s behalf, and it’s easier than explaining that the selling agent is not the listing agent but really the buyer’s agent. There are some real estate agents that market themselves as “buyer’s agents,” “exclusive buyer’s agents,” or “buyer’s representatives.” These real estate agents have chosen to make a business of finding homes for prospective buyers and handling the negotiations and transactions attendant to the purchase. These agents want to accentuate the reasons a buyer shouldn’t go directly to the listing agent when they purchase real estate. A buyer who goes directly to the listing agent and allows that agent to “manage” both sides of the transaction is dealing with an agent who has conflicting responsibilities. Their job is to get a good price for the seller, and they might not ambitiously represent the buyer’s interests. Those who market themselves as buyer’s agents indicate they’re only working for the buyer in a real estate transaction. The buyer’s agent's commission is paid by the seller, except in rare cases. They either get paid directly by the seller or set up the transaction so that the seller provides a “credit” to the buyer for how much the real estate commission is — then the buyer pays the commission. A maxim in real estate is, “No matter how it’s set up, the buyer still walks away with the house and the seller still walks away with 94% of the purchase price.”

MORE ACCESS TO THE REAL ES O THE REAL ESTATE MARKE TE MARKET

A real estate agent will have better access to the market and a special knowledge of local conditions. The agent is a full-time

liaison between sellers and buyers. An agent will have ready access to other properties listed by other agents. Buyers’ and sellers’ agents know how to put a real estate deal together. A real estate agent will track down homes that meet your criteria, contact sellers’ agents, and secure appointments for viewing the homes. On their own, buyers have a more difficult time with these things. This is even more so the case when a buyer is moving due to relocation or employment opportunity and does not engage a buyer’s agent to handle matters.

NEGOTIATING IS HARDER ON YOUR OWN

A real estate agent will keep the transaction “at arm’s length,” such that personalities and emotions do not become involved. Price negotiations take a special skill and understanding of the psychology of offering and counter-offering. Agents keep the transaction dispassionate and rational. For example, a buyer (you) might like a home but despise its wood- paneled walls, shag carpet, and lurid orange kitchen. When you work with an agent, you can express your opinions on the current owner’s decorating skills and complain about how much it will cost to upgrade the home without insulting the owner. Your agent will translate that to the seller — that you very much like the property but can see having to spend a certain amount in decorating costs, and thus can offer that much less.

CONTRACTUALLY SPEAKING…

There are many contracts and documents involved in purchasing a house. The stack is more than an inch thick. Unless you’re a real estate lawyer or title agent, these documents will be foreign to you. Yet, they require detailed and accurate completions. Buying a property is not necessarily a “fill-in-the-

blanks” transaction. One mistake, let’s say in title work, could haunt the buyer well down the line after purchase. This very situation happened. A property that sat on a double lot was put on the market. The neighbour bought it to carve off a bit of the second lot to expand his own yard. The seller then put the home back on the market, and it sold. Months later, through a property tax notification, it came out that, in preparing new deeds for the properties, the expanded yard area was correctly in the name of the neighbour; however, the house had been transferred to the home buyer. The new homeowner now owned both houses, and the neighbour owned his expanded driveway and yard. Fortunately, they were good neighbours and settled the matter with a few signatures. An experienced real estate agent deals regularly with these contracts, conditions, and unexpected situations and is familiar with which conditions should be used, when they can safely be removed, and how to use the contract to protect you.

YOU WON'T NECESSARIL N'T NECESSARILY SAVE MONEY

The point of not using a real estate agent would be to save money, right? Otherwise, why would someone turn down professional assistance in finding a home? However, it’s unlikely that both the buyer and the seller will reap the benefits of not paying real estate agent commissions. It works like this: An owner selling on his own (FSBO) will price the house based on the sale prices of other comparable properties in the area. Many of these properties will be sold with the help of an agent; therefore, the seller profits in getting to keep the percentage of the home’s sale price that might otherwise be paid to the real estate agent (usually 6%).

Buyers looking to purchase a home sold by owner without an agent may believe they can save money on the home by not having an agent involved, and so they look solely at FSBO houses. They might expect money to be saved and make an offer accordingly. Unless the buyer and seller agree to split the savings, they can’t both save the commission — and that’s if the listing price was not already lowered by near the commission amount to make it more market-attractive. Here’s a short list of the advantages that using a real estate agent can bring to your buying experience:

• Education and experience • A buffer between you and the seller • Neighbourhood knowledge • Price guidance • Market conditions information • Negotiation skills and confidentiality • The ability to handle paperwork • The ability to handle closing questions • Relationships for Future Business

It’s extremely important to know the “ins and outs” of real estate agents before you bring one along with you to help in your search for a home, just so that you might know what to expect, and what will be expected of you.

WHO A REAL ESTATE AGENT IS GENT IS

Simply put, a real estate agent is someone licensed to list and sell real estate, including homes, multi-family properties, commercial, and industrial buildings. A Realtor®, however, is somewhat different. A Realtor® is a member of the Canadian Real Estate Association®. While an agent is always a real estate agent, a 13

real estate agent isn’t always a Realtor®.

As mentioned, real estate agents who work on behalf of the best interests of the buyer are commonly called buyer’s agents. All listing agents represent the seller, but other agents who don’t have buyer-agency agreements with prospective buyers — even though they may show homes to those buyers — are working on behalf of the seller and must obtain the best price they can for the seller. In contrast, buyer’s agents work on commission, which is contracted in the listing agreement. When a buyer’s agent brings the buyer, the listing agent must split the contracted commission with the buyer’s agent.

HOW TO CHOOSE THE BEST AGENT FOR YOUR NEEDS UR NEEDS

You might feel the urge to pick the first real estate agent who appeals to or approaches you, but that’s something to avoid. As with any professional, there are degrees of professionalism, dedication, and experience. The “wow factor” will simply wear off. Meet with prospective buyer's agents in their offices. A good buyer’s agent will want to know whether you’re preapproved for a loan by a financer, what kind, and the terms of the loan you’re getting. They should spend adequate time to discover what you’re looking for in a house. They should listen as much as talk and ask questions. Watch to see if the agent makes notes. If the agent doesn’t broach the topic, ask for an explanation of his understanding of agency relationships and obligations to you. The law requires agents to explain whether they’ll be working for the buyer or the seller whenever they have substantive contact with a customer or prospective client. If the agent doesn’t offer

you a buyer’s agency agreement, that agent is representing the seller, not you. If the agent can’t explain agency concepts to you, then move to the next agent. Be sure that the agent will be showing you all listings or properties on the market that meet your requirements, and not only listings that are handled in-house. Buyer’s agents have the legal duty to put the buyer’s needs ahead of their own. Even when an agent will be paid more for selling an in-house listing, they must inform you about other available, suitable listings and take you to see viable prospects. A good buyer’s agent will provide a home-buying education. The listing agent will point out all the features of a home; a good buyer’s agent will point to the faults — or advise when they can be overlooked. Competent buyer’s agents help their buyers to think clearly as the home-buying process unfolds. For example, if a house is a good buy, a buyer’s agent might suggest looking past the dated bathroom and kitchen and look at the space above the garage that will make the perfect art studio you desire. Likewise, a cute house with all the amenities but with knob-and-tube wiring or a 40-year-old roof might not be worth the asking price. If you decide to buy with the intention of building an addition, the agent should advise you to check the zoning before making an offer. Agree to sign a buyer’s agency agreement after you have met with an agent. Some people sign an agency agreement after attending a showing given by the agent. Working with a seller’s agent is a mistake, according to an article by Amy Fontinelle of Forbes’ Investopedia. Any information you reveal will become leverage that the seller can use in a purchase negotiation. A buyer’s agent is legally required to maintain your confidentiality, disclose material facts to you, and maintain loyalty to you. These are

fiduciary duties.

LOOK FOR PROPER CREDENTIALS

You wouldn’t trust a doctor who didn’t have the proper credentials and licensing. Don’t trust a real estate agent who doesn’t present theirs or doesn’t have them at all. It’s easy to find real estate agents who can take the job, but finding agents with special credentials — those who have gone that extra step to take additional classes in certain specialties of real estate sales — is worth looking into. Here are just a few credentials within real estate that you should be on the lookout for: • Accredited Buyer’s Representative (ABR): Completed additional education during representation of buyers in their transactions. • Certified Residential Specialist (CRS): Completed additional training during the handling of residential real estate, such as houses and apartments. • Seniors Real Estate Specialist (SRES): Completed training for the purpose of helping sellers and buyers 50+ years old. Similarly, if you choose to use a real estate agent who’s also a member of the Canadian Real Estate Association®, it will be a bonus. However, ensure they have credentials that are relevant to your need(s).

RESEARCH LICENSING

Your province will have a license board for all active Realtors® and real estate agents, which you can easily access. You will also be able to see their contact information, disciplinary actions, 16

complaints, or any other information that you’ll need to help influence your decision — especially since most of the information is now posted online.

GIVE THE “WHAT ELSE” TEST

A good agent will know about all the other properties for sale in the area. Also, a good agent always does their research regarding the events in the current market, and those homes that are out there for the taking. In short, you want an agent who’s an expert of the current market, and someone who always stays on top of things.

RESEARCH THEIR BUSINESS ACTIVITY

Learning the type of market presence that a real estate agent has is the best way to figure them out. Ideally, you’re going to want an agent who specializes in one or two real estate markets, and who understands which types of homes and amenities are available within your price range. You can unearth this information by asking them or by asking the provincial licensing authority if you’re not comfortable with asking the agent directly.

GOING THE BUYER'S AGENT ROUTE

So, you’re ready to take the plunge and look for a place to call “home.” To get the most out of it, use a buyer’s agent to avoid a flurry of paperwork, stampedes of buyers competing for the same property, and other challenges. Home buying can be exciting and exhilarating, but it can also be complex and stressful — which is why having a pro by your side can make an enormous difference. As discussed, you’ve probably heard of buyer’s agents, seller’s agents, listing agents, and so on. You’re a buyer, so what’s a buyer’s

agent? True to the name, buyer’s agents assist home buyers every step of the way; they can also save you both time and money on the road to homeownership. When you find the right one for you, these real estate agents will work day and night to ensure all your needs and requirements are met when it comes to finding the right home.

WHAT BUYER'S AGENTS DO FOR YOU

Your buyer’s agent will have a vast knowledge of the current real estate market for the area, which will include neighbourhood amenities and conditions, the law, zoning issues, price trends, negotiations, taxes, financing, and insurance. Once you meet with the buyer’s agent, they’ll generally help you determine your needs and wants when it comes to finding a home and a neighbourhood. The agent will teach you what you can afford, help you set a budget, provide some insight on the current conditions of the market, and explain what you should expect while shopping for a home. During the shopping period, you’ll meet with your agent for tours of homes in which you might be interested. They will give your insight into the floor plans, the home’s pertinent selling points, and the overall crime rate of that neighbourhood. They will also give you the rundown for local activities, restaurants, shopping centers, and schools nearby. Your agent is responsible for ensuring inspections of the homes are complete, as well as the disclosures therein. They’re also in charge of ensuring coordination and completion is done through the roof inspector, lawyers, lenders, and all other professionals involved with the purchase of the home.

If bargains need to be made over the price, you won’t have to negotiate yourself. Your buyer’s agent will do that for you, along with signing the final closing documents. They will be present whenever there are documents to go through and sign.

DUAL AGENCY: THE BASICS

A “dual agency” relationship occurs when a buyer is being represented by a brokerage firm that controls the listing. Once an agent represents both the seller and the buyer within the same transaction, the situation is known as “dual agency.” In multiple places, this is illegal because of the conflicts of interest that can arise regarding the broker. All agents hold the same responsibility, which is to inform their clients of all potential risks that could arise due to conflicts of interest. Legally, agents are not allowed to work on both sides of any transaction without consent from the clients. If you’re selling your home and you don’t want your agent to also work with the buyer of your home, it’s your right to say so in the listing agreement. This is also true for buyers. A buyer can get out of an agreement with an agent if they are interested in purchasing a home their their agent is listing. When it comes to dual agency, there are definite advantages for the seller. • Trust has already been gained with your listing agent, so representation for the buyer has been established. • Your agent brought you the buyer knowing that you’re selling, even if your property has not yet hit the market. • Your listing agent will have already covered and researched your neighbourhood’s market to gain buyer inquiries, which means your agent will be working from

all sides of the deal to sell your house faster, and with more incentive. • Your agent works together with corporate relocation buyers who need to find a house quickly, and they will ensure it’s your house that’s bought. There are also cons for the seller when it comes to dual agency, and they are: • You can’t be advised by your agent as thoroughly when they must act as a dual agent because impartial facilitation is required. • Your listing agent is not allowed to negotiate the best or highest price for you if also negotiating both the best and lowest terms for the buyer. • Earning a full commission, if the opportunity arises, may tempt the agent to coerce a deal that you might not accept otherwise. • Your agent may inhibit all access to your listing through buyers with agents. To avoid surprises or missteps in a dual agency sale, always ensure you have clarified important details with your agent ahead of time. You can do this by using an exclusive buyer agency agreement or a listing agreement.

HOW REAL ESTATE AGENTS ARE PAID

The Canadian Real Estate Association® 2021 Profile of Home Buyers and Sellers states approximately 8% of homeowners opted to put their homes up for sale in 2021 without using a real estate agent or Realtor®.

A handful of For Sale By Owner (FSBO) transactions dealt with sellers and buyers who previously knew each other or were directly related; Real estate agents and Realtors® — unlike professionals in different categories who bill by hourly rates or earn a salary — get paid through a transaction (commission) at the end of each sale. For example, if an agent has worked with a seller or a buyer for months, they don’t get paid for the time spent if there is no transaction during that period. Agents receive a commission once the transaction goes through to settlement (closes) based on the selling price of the home. At that point, the commission is earned. The commission itself is negotiated — in most cases, between the seller and the agent. Typically, an agent will earn a commission of 6% from the sale price, but some brokerages have commission discounts for the sellers with whom they work. Essentially, the listing agent and the buyer’s agent will split the commission. That can bring forth some issues. For example, sometimes the split might not be negotiated evenly. A seller could have agreed to pay a commission of 5.5% that, if further divided, the buyer’s agent would receive 2.5% while the listing agent receives 3% of the commission. Even though some agents are associate brokers, or brokers in general, all commission payments are instructed to go through to the broker who’s managing the brokerage where the agent is working. From there, the commission is then split to the agent and the broker, according to the agreement that’s been made. The split will vary; sometimes, newer agents will earn a small portion of the commission compared to the experienced or successful agents who generally sell more expensive properties or homes.

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