Buying an Edmonton property

Little Known Buyer Advantage Your Builder WON'T Tell You

How to Buy a Home in Today's Market

Straight Answers About an Agent's Role


Buyer’s Advantage

Edmonton condo search

At times builders will offer newly-built homes that are available for immediate delivery. These can usually be ready to move into within 30 days! meaning that sometimes the builders may be eager to sell - but don't expect them to tell you this.

 

There are a few reasons why immediate delivery homes might be available:

  • The community is almost complete so the builder had the contractors build “spec” homes on the last lots

  • The home is a show home

  • The contract on the home fell through

  • The builder purposely built the home for immediate delivery for buyers who are relocating or who have already sold their homes and need to move in quickly

 

Sometimes you are able to get a good deal on an these delivery homes, and some builders may offer you financing incentives or additonal options for free instead of lowering the price, which is understandable because recent buyers don’t want the last homes on the street to sell for less than what they paid for it.

 

If you’re looking to move-in quick or would like to walk through what you’re buying before you sign a contract, an immediate delivery home might be right for you.

 


Buying a home can build wealth: How to buy a home in today's market

There are more options now than ever for home buyers in today’s market. Properties are available below the average market price, with selections ranging in price for starter homes, buy-up houses, condos ,executive properties and luxury estates. Today’s a good day to buy your dream home!

 

Lenders are more motivated to offer good rates and innovative financing, such as buy-downs and adjustable loans. This is great news - you can qualify for even more home on your current income.

 

There are four wealth builders of home ownership:

Leverage

Leverage means borrowing money to control a property and receive its benefits.

 

For example, you acquire a $100,000 home with a 10% down payment - or $10,000. Let’s assume the property appreciates by 10% in the first year - the house is now worth $110,000. You earned $10,000 on your investment of $10,000 - a profit of 100% in one year! Not taking into account financing costs, which would lower your net field.

 

If home prices rise by 3% a year during the next decade, your $100,000 home would be worth $134,392 in ten years. With your $10,000 down payment, you’d realize a 344% profit. If prices rise by 5% per year, you’d profit 629%. At 8% per year, you’d profit a whopping 1,159% due to your leveraged purchase!

 

That’s leverage by its basic definition: a big return using borrowed money.

Tax breaks

When you sell your home, all capital gain you obtain is tax free (provided it’s your principal residence). Depending on how much captial you gain, this amount could possibly create a sizable savings account or help you purchase your next home.

 

It’s also possible to structure your affairs to make your mortgage tax deductible if your investment portfolio is greater than or equal to the mortgage you hold or will hold on your home.You may be able to restructure your portfolio and mortgage so that your mortgage interest is tax deductible.

 

If you or your spouse are first-time home buyers in Canada and have RRSPs, you could use the money in your RRSPs as a tax-free down payment on your dream home. This can be accomplished using Revenue Canada’s Home Buyers Plan. If you or your spouse have not owned property in British Columbia, you may be eligible for a reduction on your property transfer tax if you choose to buy a home there.

Paying your own mortgage (not someone else’s!)

Savings mortgage principal payments go directly into your pocket, instead of your landlord’s. You’re saving and building your own equity when you pay for a home that’s appreciating in value. This value amount is subject to inflation, local economy and any home improvements you make. However, not all properties will give you an appreciation windfall and you must buy wisely. Enlisting the help of a mortgage professional and real estate professional will help you make the smart decision so you can start building equity right away.

Owner pride

Wealth doesn’t always have to be financially related. Owning a home is about more than a roof over your head and a place to sleep. Many owners find the benefits of owning your home far outweigh the necessary upkeep - most enjoy the work because they’re working on their property and for their own benefit. Putting down real estate roots also helps you to become more involved in the community and can even help you meet new people and form friendships. Take pride in your new home!

Six ways buyers can take advantage of today’s real estate market

Be realistic

Ideally, you would quickly be able to find your dream home in a great location in the city. However, it’s important to be realistic. Don’t stretch your budget just because you fell in love with a home; be modest about price and find a good location that can work with your lifestyle. Even if your home isn’t your dream home right now, you have the option to improve it and make it your own.

Options for if you haven’t been able to save for a down payment and closing costs:

  • Consider negotiating a gift, loan or shared-equity arrangement with parents or other people looking for a good investment

  • Sell something of value - remember, you can always replace it later

  • Finance the closing costs, if your lender approves, or get help from the seller

  • Use a tax refund

  • Borrow on your life insurance or securities

  • If your parents own their home and are over the age of 62, they can consider doing a Reverse Mortgage program which allows them to unlock a percentage of the capital they have accumulated on their home - without having to make payments while they continue to own their home - to assist you with your down payment. The Canadian Home Income Plan (CHIP) is a program supported by the two major canadian banks and is available to homeowners in British Columbia, Ontario and Alberta.

Pre-qualify

Pre-qualifying yourself as a buyer can help you determine what price you can afford. Lenders typically consider your total basic monthly affordable housing costs like your mortgage, principal and interest payments, real estate taxes and insurance payment. Affordability is based on 30 to 32% of your gross monthly income. With additional long-term debts, the ratio can be up to 40%.

 

Some lenders will extend these limits, based on their assessment of your financial situation and your loan plan. Being pre-qualified also gives you more buying power as sellers are likely to consider your offer over those of buyers who aren’t pre-qualified.

Innovative financing

There are many kinds of loans available: fixed rate, adjustable rate, government backed mortgage insurance (CMHC), assumptions, buydowns, blended loans, seller takebacks and more. Terms and interest rates vary greatly among loans and lenders. Those factors, as well as your income and length of time you expect to own the home for must be considered - we can help with that!

Choosing your lender

As shown above, mortgage options are numerous thanks to recent innovations in mortgage plans. We have the knowledge and expertise to help you structure your mortgage to your best advantage.

 

What we can do for you:

  • Explain loan programs clearly and simply to ensure you completely understand your options

  • Perform a full financial assessment and explanation of your best options

  • Help loans get processed quickly

  • Dependability - we’re here to protect your best interests

Consult a professional

For best results, consult a professional. Buying a home involves many details and we can help you understand the home buying process and ensure its handled smoothly and professionally. We’re here to help, give us a call to get started!

Edmonton realtors

Some different reasons to own your home

Owning a home is so much more than just a financial affair. Many homeowners love the peace of mind that comes along with owning your own home. Not worrying about housing means you can focus your energy elsewhere!


Here are a few benefits first-time home owners may not think of:

A greater sense of belonging to the community

Many home owners report a greater sense of attachment to their city after purchasing a home. It’s easier to get interested in what happens in town, to the roads, the schools and shopping areas, because these are changes that will actually affect you down the road.

A commitment to something and a sense of stability

Owning your home creates a sense of stability that renting does not provide. There’s no landlord to force you to move, your kids will never have to change schools and you’ll have the freedom to plan your life years in advance because you know exactly where you’ll be living.

A feeling of control

New Edmonton Listings

When you own your home, the sky’s the limit when it comes to making changes. You can remodel, landscape the front and backyard, build a new deck, etc. We don’t always have control over other aspects of our life so having a space completely under your control can make you feel more stable and happier.

Living in a house with children is easier

If you have children, you know that raising them in an apartment complex poses its own problems. Moving into a house gives you much more control over where they play and go during the day. Once you get to know your neighbours you can look out for each other’s kids and keep them out of trouble. Having a backyard where they can escape to can also provide you with some much needed relaxation time!

In general, children do better in school and feel more secure

Oddly, buyers report that their children did better in school after they bought a home. Maybe it's because your feelings of stability spread to them? We’ll never know for sure, but it’s a definite bonus of owning your own home.

You save time and money by not going to the laundromat

This may seem like a small detail, but if you’ve lived in places where you had to lug your clothes down to a laundromat and spend two to three hours waiting for them to be clean, you’ll probably appreciate having your own appliances.


Say you wash laundry about once per week. On average, it’s about $1.50 for a washer load and $1.50 for a dryer load. If you do three loads that take 3 hours, that’s $9 per week. That’s $432 and 144 hours per year! Think of what you could do with that time and money!

 


Straight answers about an agents role

What role does a real estate agent play?

As today’s housing market evolves, so does the role a real estate agent plays. A real estate agent, by basic definition, is a professional that helps you to buy or sell a home. They work with you to help your home selling or buying process go smoothly and ensure you are happy with the result.
 
Traditionally, agents were legally bound to represent the seller. The seller would pay both the listing agent the agent who brought the buyer.
 
But, times have changed. In today’s market, agents work with both buyers and sellers. Consumers have choices about who they want to represent them, and what type of relationship they want to have with the agent. If you want to sell a home, you can work with a “Seller’s Agent” and if you want to buy a home, you can work with a “Buyer’s Agent”.

Know the players

There are several players involved in the real estate business. A “broker” is someone who has taken a specific exam to earn the designation and is licensed by the province. These people usually form a real estate company and recruit real estate licensees - salespersons and associate brokers - as agents. The agents represent the principal broker through personal interactions with the firm’s clients and get some or all of the brokerage commission. The principal broker is responsible for overseeing any and all agency agreements made between a client and a company.

The relationship between the agent and the principal

An agent is the person who represents and acts on behalf of another person, called the principal, and is responsible for certain duties owed to the principal. These duties include care, confidentiality, full disclosure and accurate and complete accounting. These duties can vary from province to province so make sure you’re well informed.

Seller’s Agent

This is an agent who is employed by and represents the home seller. They are also known as a “listing agent”, because they are the one who lists the home and markets it through a Multiple Listing Service (such as Realtor.ca). A listing agreement is created between the seller and the agent and defines how the agent will be paid and other terms. The seller’s agent is responsible for getting the highest purchase price and best terms possible for the seller.
 
There are a variety of services available through a seller’s agent including: a diligent search for the right home, an explanation of available financing, calculation of monthly payments and estimated settlement costs, etc. The seller’s agent is held to the highest degree of honesty and good faith and may also be required by provincial law to disclose certain kinds of information to the buyer about the property.
 
The seller’s agent cannot disclose confidential information to the buyer that is not in the best interests of the seller. They cannot offer an opinion of the home’s value nor can they disclose what price the seller will accept.

Buyer’s Agent

This is an agent who is employed by and represents the buyer. The agreement between the buyer and agent again represents a legal contract between them and usually describes the agent’s duties and how they will be compensated. The agent must be paid by the seller through a commission that is split with the listing agent or they must be paid a sales commission  by the buyer or other mutually agreed on method of payment. Some agents will charge the buyer a retainer or hourly fee.
 
The buyer’s agent is responsible for helping the buyer with their house hunt, representing the buyer’s interests throughout the process and helping to negotiate the best price and terms for the buyer.

In-company situation

When the potential buyer is working with an associate from the sale real estate company that listed the home, this is called an “in-company situation”. Depending on the province, the solution to this can be a “designated representative”, “transaction broker”, “facilitator” or “disclosed dual agent”.
 
Confidentiality of clients is still of utmost importance in this situation and provincial statutes and common law determine how the situation is handled. The real estate agent cannot, for example, reveal to a buyer the lowest price their seller would accept nor can they reveal to a seller the maximum price the buyer is willing to pay.
 
The basic goals of a real estate transaction haven’t changed for an in-company situation. The agent still wants to help close the transaction for both the buyer and the seller.
 
We hope that we answered any basic questions you might have with this article. If you want more information, never hesitate to contact us! We are knowledgeable about all areas of real estate and are more than happy to share our expertise with you. Provincial laws vary; we want you to understand and be comfortable with the options involved when you engage the services of an agent.

Frequently Asked Questions - For buyers

How can a seller’s agent or subagent help me and what can’t they do?

There are many important services an agent can offer you:
  • Help you determine how much you can afford for a home and explain how different loans can stretch your buying power
  • Search all homes in the Multiple Listing Service and present you with homes that you select as best meeting your needs
  • Provide general information about homes, recent area sales, neighbourhoods and local lending institutions
  • Prepare your sales contract and present it to the seller
  • Walk you through the homebuying process and get you in touch with lenders, inspectors and sellers throughout the whole settlement

The seller’s agent is obligated to share information you provide with the seller, so it’s a good idea to keep certain financial and personal matters to yourself. For example, you may not want to disclose that you’re willing to pay more than your offered price, or that you’d agree to pay more points or closing costs, or that you’re especially motivated to buy. The seller may capitalize on this information and you could miss out on getting the best deal.

The agent is not obligated to give an opinion of the home’s condition, the value of improvements, any urgency the seller may feel to sell and if the seller is willing to accept an offer below their price. The seller’s agent will provide you with the answer: “I can only quote the listing price” should you choose to push them for more information about these matters. You must represent yourself in the negotiations and terms process. The seller’s agent will present your offer and bring you either a signed offer, rejection or counteroffer and you are free to respond in whichever way you’d like.

Should I be represented by a buyer’s agent?

Ultimately, the choice is up to you. A buyer’s agent can discuss relative advantages and disadvantages of a particular home, advise you on how much to offer, evaluate any improvements it may need and actively participate in negotiating a good price and terms for you. Other buyers may be comfortable handling the negotiations themselves and feel that a seller’s agent or subagent will be enough assistance to find a home and close the transaction smoothly and successfully.

I know the seller’s agent is paid by the seller, but who pays the buyer’s agent

Payment for the buyer’s agent varies. In general, buyer’s agents will receive a share of the commission paid from the sale proceeds. This term is usually outlined in the listing agreement between the seller and seller’s agent and states whether the commission will be split between seller’s agent and buyer’s agent or that it must be negotiated.
 
Other forms of payment can include: collecting an initial retainer fee from the buyer, charging by the hour, charging a flat fee or a combination of any of these. These fees are often applied against subsequent commission received by the buyer’s agent. Make sure your agreement specifies these details.

If the buyer’s agent I use will split a commission based on the sales price, doesn’t the buyer’s agent have a conflict of interest when it comes to negotiating the lowest price for me?

In theory, this could be true. However, there would be little benefit to the buyer’s agent if they failed to help you negotiate the best price. For example, the buyer’s agent would only receive a few extra dollars in commission for every $1,000 paid above the seller’s lowest price. Most buyer’s agents would rather negotiate the best possible price to ultimately grow their referrals and reputation within the real estate community.
 
Some buyers and agents will agree on a payment formula that is not tied to the sales price, such as a commission based on the original asking price or flat fee.

Can a buyer’s agent show me all the homes for sale in the area?

In general, a buyer’s agent can show you all the available homes in areas listed with a Multiple Listing Service (such as Realtor.ca), homes that are not in the Multiple Listing Service and homes for sale by the owner. The listing agreement made between the seller and seller’s agent will often state whether or not buyer’s agents may show the home. Most sellers want their home to be exposed to the largest possible audience, but sometimes the seller will not want to work with a buyer’s agent.
 
An in-company situation occurs when you request to see a home that your buyer’s agent has listed for sale as the seller’s agent, or one that is listed by another agent at the company of your buyer’s agent. Ask the agent whether and how the company or agent might be able to modify the agency agreement with you if you decide to purchase a company listing.

Can a seller’s agent show me all available homes?

In short, yes. Most provinces allow the agent to show you any home available through a Multiple Listing Service. This includes homes that are listed personally by the agent, homes listed by another agent in the same company and homes listed by agents in other companies.
 
In areas that do not have a Multiple Listing Service or where each real estate company shows only its own listings, both buyer’s and seller’s agents may be able to show only their own company listings.

Frequently asked questions - For sellers

I’m selling my home, should I let buyer’s agents show my home?

The decision being yours, it's important to remember that allowing a buyers agent to show your home will provide you with more exposure, this increases the chances of attracting qualified buyers and helping you sell quickly at the highest price possible. Sellers normally don't care who brings buyers or how brokers split the commission along as the house sells, so most sellers will let any agent sell the home. 

If a buyer is using a buyer’s agent, do I have to pay the buyer’s agent a commission

This varies by area, always speak to your agent to learn what your options are. As the seller you have the ability to indicate on the listing agreement whether the selling agent must split the commission with the buyers. Most sellers work with a broker who splits the commission with the buyers agent even though the agent does not represent the sellers interests. This will increase the number of buyers for your home because the listing broker is already aware of the split and has agreed to share the commission with the buyers agent.

Can the seller’s agent represent me in the sale of my home and then continue to represent me as a buyer’s agent when I purchase my next home?

If you liked your agent, that’s great! You can choose to do this if the seller’s agent also works as a buyer’s agent. As long as you both agree to the representation, they can represent you as a buyer’s agent under a separate agreement. 

How and when will I find out who an agent is working for?

The Canadian Real Estate Association supports disclosure laws that require real estate agents to “provide timely, meaningful written, disclosure to consumers of all possible agency relationships available under provincial law and the most significant implications of choosing one type over another”.

Most provinces require real estate agents to disclose to both the buyer and seller their agency relationship. This disclosure should happen early, before the seller signs a listing agreement, a buyer is shown properties or the real estate agent is told any confidential information. The consumer will usually sign a form acknowledging the agency disclosure.


 


Little Known Buyer Advantage Your Builder WON'T Tell You

How to Buy a Home in Today's Market

Straight Answers About an Agent's Role

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the REALTORS® Association of Edmonton. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.