by Pasha Beigi
on Thursday, December 20th, 2018 at 8:23pm.
1. What will I have to pay as a down payment?
A standard question that we all will have when it comes to buying a home or investment. This should be your first step in the home buying process so you can see and understand what direction you need to go.
First, a down payment is the amount of money that you goes towards the purchase of a new home. It is deducted from the total purchase price, the mortgage loan covers the rest of the price.
The minimum amount for your down payment will depend on the price of the home you are interested in.
Typically it looks like this:
$500,000 or under = 5% of the sale price
$500,001 - $999,999 = 5% of the first $500,000 of the sale price and 10% on the remainder above $500,000
$1,000,000 and above = 20% of the sale price
IF THE PRICE IS $500,000 or under
For example, if the price of the home is $450,000, your minimum payment will be 5% of the sale price. Multiply the price by 5% and you will have a total of $22,500.
IF THE PRICE IS HIGHER THAN $500,000
In this scenario this price of the home is $650,000, your minimum payment will be 5% of the first $500,000 (which totals to $25,000) and on the balance remaining of $150,000, your minimum payment will be 10% (which totals to $15,000). So, when you add both you are paying $40,000 as a minimum down payment.
Need to crunch some numbers? Check out our mortgage calculator. Do not hesitate to contact us for more information or to get some names of some brokers that we trust and have seen help clients to the same level of service that we provide.
How much of a discount could I get from a seller?
Typically, you should be able to comfortably negotiate a discount anywhere from 0% to 5%. Better yet, if it has not sold and has gone past the average days on market in your community then you might stand a higher chance in order to go even lower. With that being said, pay attention and ask questions as there always is a reason for why the property has not sold in the average days on market timeline.
How important is my credit score?
A credit score by definition is a statistical number that assesses a clients "creditworthiness" and is based on their credit history. Mortgage lenders will use this score to decide on what interest rate and what type of loan the client qualifies for, if any.
Just because your score is low it does not mean you cannot get approved for a loan. With that being said you will need a strong broker and it will be longer than your average application. Also, keep in mind you may have to pay a higher down payment to offset the risk for the Mortgage lender.
I am not sure if I should buy?
This is a list of reasons why you should,
Appreciation in value
Pride of ownership
We would love to see your list of why you shouldn't,contact us!
5. Do I sell my home that I am currently in before buying a new one?
An option we first recommend is to see if you can convert your current home into an investment property that will bring you another form of income by renting it out. Although, keep in mind that your mortgage lender will typically determine if this, included with your credit history and income will be an option you have in order to obtain another loan to purchase a new home.
If you are using the equity built in your current home on a new downpayment then absolutely, you will need to sell your current home. However, with a proper strategy, which we can also provide, you should have no issues moving from one to another. This is quite common in the industry so do not fear it, we will guide you when you are ready.
6. Is it worth it to get a home inspection?
Absolutely, we highly recommend that you obtain an inspection on any property you purchase. It can find defects that are not detected by just looking with your eyes. Finding the condition of the roof, heating, air transfer, Roof, Windows, plumbing, etc, is vital information that can save you thousands after the sale closes. Better yet, depending on what is found, a new price can possibly be negotiated in order to compensate for the issues before having to finalize documents for the sale.
7. How much do I have to pay an agent to help me buy a home?
I love this question and I have been surprised over the years about how many people do not know the answer to this. You pay nothing unless you make it a part of a negotiation tactic with the seller. The standard process is that the seller pays for all Realtors involved in the transaction. Quite frankly, there are huge risks that you can place yourself in when you choose to buy without a Realtor's guidance. Do not trust any agent who is willing to do a dual agreement with both you and the seller, do not ever let your future and hard earned money be at the mercy of someone who is willing to forgo their fiduciary duty in order to get more money off of you. Get your own Realtor that you can trust who is looking out for your best interests only for free!
8. What does Seller's market mean?
That prices are at their highest points currently as there is an increased demand for them. For example, having fewer homes available in the market will make prices go up as there are fewer options for buyers to choose from. Economic factors such as more jobs being created in the city will have more people moving here which dramatically raises the prices of homes as they will be selling fast, be prepared when you are house shopping in this market as the competition will be fierce. A spike in interest rates will force buyers to decide on making a move before their purchasing power changes with new rates coming in (Vancouver Island residents will have personally witnessed a couple of these examples that have occurred on the South Island market in the recent years).
9. What does a Buyers market mean?
Another reference for Vancouver Island residents who have seen how a market can shift very quickly from a Seller's market into a Buyers market. Interest rates rising can substantially change peoples buying power which in turn effects and slows down sales, Sellers, in turn, will attempt to lower their prices to make their homes more appealing to the smaller Buyer market. Typically, after a Seller's market, you may notice new home construction being built all over the city. Due to the inventory growing, houses on the market will notice changes first in the average days of houses being sold on the market. Then comes the sellers who need to sell, who lower their prices in order to attract more Buyers to their property. As a Buyer, this is a great time to negotiate a deal!
10. What in the world will a Realtor do for me as a Buyer?
A few general services that a Realtor should provide you,
Help you find the best mortgage approval
Help find neighborhoods that best fit your criteria & price range.
Scan the MLS system daily in order to find you the right home right as it comes on the market.
View properties with you objectively, searching & finding unfavorable characteristics (ie. Drainage issues, Roof health, build quality, etc.) that Buyers may miss as they are more focused on seeing if they love the property or not.
Create contracts and negotiate aggressively on your behalf regarding the price and any other contingencies that are on the contract.
Assist you in completing the contingencies as well as guide you through the steps post purchase.
This is a very fair question to ask, do not feel shy, understand that the Realtor you are working with is working for you, ask them to show their value. What techniques and strategies do they provide that other Realtors do not know how to or just flat out are not doing. You are not paying for a Realtor, it's free, but they are getting paid, make sure you get a shark working and looking out for you and your families best interests, not a goldfish. Unfortunately, this purchase is not like Walmart where you get to come back after the sale is completed and ask for a return. As in any industry, all Realtors are not created equal. Here, we pride ourselves in our service, have a coffee with us (also on us!) and find out why.
Reviews from some of our Buyer clients.
"We recently dealt with Pasha on searching and purchasing a home. He was so accommodating, polite and helpful with everything. Couldn't be happier with our dealing with Him, he is honest and very professional. We will only deal with Pasha from here on out. If you're looking for a realtor he's the one. Couldn't be happier!" Nick & Riley
"Pasha, Thank you so much for your professionalism and support in helping us buy our first home! It has been such a great experience, we really appreciate your thoughtful personal touch. We are finally settled and unpacked in our new home just in time for Christmas. Thanks again!" Natalia & Nate
"Being heavily invested in real estate as an investor, it’s hard to find a realtor that knows what to look for to maximize profits, neighborhoods, and changes coming in the market, that will increase value for the property you're about to purchase. Pasha did all this for me on multiple properties. He has made me a few hundred thousand easily in the last 2 years. I highly recommend pasha for your real estate needs" Nas
"Anyone who has been there knows how exciting and nerve-wracking buying your first home can be. From day one, Pasha's easygoing nature and wealth of knowledge (and joy in sharing it) boosted my confidence as a buyer. He was passionate about finding me my new home and diligent in showing me different examples from across the housing spectrum that might meet my needs. Pasha is all about education, and as a first time home buyer, I had a lot to learn. He truly takes you by the hand and patiently guides you from beginning to end, through the complicated process of buying a house. His quick response time and thoughtful answers to panicked questions were especially helpful to this nervous buyer! His high energy and sense of humor make working with him a pleasure - Pasha clearly takes great pride and fulfillment in helping you find your new home. His judgment is sound, and he always keeps your needs and interests at top of mind. I would very happily recommend him to anyone looking to buy or sell a property." Janie