REAL ESTATE IN A NUTSHELL      

PART 5 - BUYING A HOUSE

OK, so you are set to buy a house (condo, townhouse, etc). (see Parts 1-4 here)

Looking through the internet, PCS (if you don’t know or forgot what it is, I strongly advise you to look at Part 4 here), newspapers, etc, you narrow down your search to about 15-20 properties.

Ask your Realtor’s opinion about them and guaranteed – this list will be shortened significantly, because he or she would know something like “sold already… stay away because of…” or something else like that. (By the way, this is one more reason to buy through a Realtor).

So now you are down to 8-10 properties… Still don’t ask for showings yet. Drive by these properties yourself first. You will be amazed, how many perfect looking (on your computer screen or newspaper page) houses you will reject without even leaving your car for very different reasons – from a noisy road or night club next door to it to …whatever!

If you do like what you see, leave your car and walk, looking around for a couple minutes. Sometimes you may be greeted by neighbors who will give you a wonderful opportunity to talk about the neighborhood in general and that particular house for sale.

They might tell you something which will either deter you from this deal outright or the opposite, get you more interested in it. Not to mention you might learn something which will help you negotiate a better deal eventually.

If you like what you found, now it’s time to see the houses from the inside. The best way – not just one house at a time, but a few at once (not more than five in one day, otherwise you will be tired and confused).

What to look for during the walk through? First of all – get the general impression and feeling. If it doesn’t “click” in the first 2 minutes (it’s like a blind date!) – don’t even analyze why and don’t try to convince yourself - “Well, it’s not too bad, the size and price is right…” – just walk away.

If you like what you see – take your time (don’t let your Realtor rush you, if badly needed – ask him to cancel the next showing on your tour) and look at all the details. But don’t try to memorize everything – you can always ask for a second showing. Despite what you might think, both sellers and Realtors love second showings!

(Of course, all of the above doesn’t apply to a house which looks like a hot deal to you. If it just came on the market and you feel it’s your dream house – call your Realtor immediately! (Just in the last 2 months I sold at least 3 houses which were on the market for … less than 2 hours!)

Let’s say you still like this property after the second showing and decide to put in an offer. Of course, the first thing which will concern you – what price to offer?

Let’s say, the asking price is $300,000. Should you offer $290,000?... or maybe $280,000 ?... or $260,000?

It really depends… First of all, ask your Realtor about the recent sell/list price ratio. It shows the average discount on the asking price when properties were sold in your area in the last couple months. Of course, in a buyer’s market these discounts are higher and in a seller’s – lower.

Recently in the Nanaimo area it was around 2% for single family house ON AVERAGE. So if the asking price is $300,000 you can expect a $6,000 discount or so.

(Of course, sometimes you can get a much better deal and sometimes… pay more than the asking price, especially if you get involved in a so-called multiple offer situation, but this sell/list ratio gives you a general idea).

So what amount to offer? Just think about it. If the property was on the market forever – you can try a lower offer, but if it just came on the market and at the time you saw this house another 5 Realtors were waiting with their clients to get into it – what do you think your chance is to get it at a low price? Again, if similar properties were selling recently for ~$290,000, maybe it’s not the best idea to offer $260,000, right?

Don’t listen to the advice of so-called “tough negotiators” (even if they are your friends or family) who would proudly tell you they ALWAYS get fantastic deals on everything, including real estate, because they play such a hard game and everybody gives in to their “toughness”.

VERY often the irritated sellers don’t want to deal with insultingly low offers and these “tough” people, so most of their “victories” come from garage sales.

My son, who is a much nicer person than me, after reading this part suggested editing it, otherwise "tough guys" might be offended. So if you are those guys or just prefer nicer guys, deal with my son, who is a Realtor in Victoria ( anton-k@shaw.ca , www.anton-k.com )

What else should concern you in your offer except the price? A lot of VERY important things. I would say, sometimes even more important than the price itself. Read about it in the next part or here.

Questions?

Call  1-877-255-9825   or e-mail  victor-k@shaw.ca