|  Tips
On How To Make a Smart Kingston Real Estate Investment
Almost everyone can picture their dream Kingston home down
to the potting shed and white picket fence or twenty acres
on a quiet country road. That’s the emotional side of
the home buying equation and is probably what will lead you
to the want ads and Sunday drives in the country “just
to look around”.
Before you take that first emotional step into the Kingston
home buying process you need to pay close attention to the
business side of this important family investment. The more
you prepare yourself and know what to expect, the less stressful
and more enjoyable the whole home buying experience will be.
Avoid the “impulse”
trap! Decide what features you WANT and what features you
HAVE TO HAVE:
- Type of
home (i.e. condo, townhouse, duplex, single family dwelling).
- Single
level or multiple level home – may depend on mobility
issues or small children.
- Number of bathrooms and bedrooms
– plan ahead, do you need room for an expanding family?
- Proximity to schools, work
or leisure activities – of more importance if transportation
is an issue.
- Privacy of yard – provides
a secure place for children (or Rover) to play and
prevents the neighbors from looking right into your pool
or hot tub.
- Layout of kitchen –
close & cozy for convenience or large & roomy for
big family dinners.
- Location of bedrooms in relation
to more active areas of the house – keep in mind that
small children are usually early birds and teens are often
night owls, you might have a happier home if the two are
kept separate.
- Parking availability for your
vehicles (including any recreation vehicles you may
have) and also those of friends or family who will be coming
to visit.
- Other features such as fireplace,
fenced yard, and natural lighting.
Check out the neighborhood
– does it suit your lifestyle?
- Housing density – do
you need a home where the buffalo roam? Or do you like to
see your neighbors across the backyard fence?
- Type of neighbours –
will you fit into a retirement community or a neighborhood
with young families? This detail is almost as important
as the home itself!
- Future construction or development
in the neighbourhood – are they building a
mall or apartment complex down the road? It may affect property
values in the future, and think of the noise and traffic,
is it worth it?
- Future trends in the neighbourhood
- is the value going to increase or decrease according to
the nature of the growing or declining neighbourhood? Your
real estate agent should be able to advise you.
- Crime rate – check out
the neighborhood with local law enforcement agencies.
- Traffic patterns – is
it a busy road, a major connector or a slower dead end street?
Spend some time on the street and see traffic use for yourself
Assess your financial situation - visit
your lender before you start looking and get details on your
“borrowing” situation.
- Confirm that your lender will be willing to loan you
the money. You can even get “pre-approved” or
“pre-qualified” for a maximum amount and that
will help to convince the seller of your dream home that
you are a serious buyer and not just a looky-loo.
- Define your price range – you don’t want
to waste time looking at homes you
can’t afford. Take note: you may not want to borrow
the full amount your lender is willing to lend you. Some
people prefer to enjoy a carefree lifestyle rather than
being “house poor” and burdened with a maximum
mortgage.
- Lenders usually want to lend you the money and will help
you be creative with
your income, finding money you didn’t think you had
and figuring out how much you need for a down payment.
- When assessing your financial situation, you may want
to consider consolidating some of your other debts (car
loans, credit card debt, etc). Your lender can advise you.
- Is this your first home? First time homebuyers sometime
get deals or breaks on some costs that previous homeowners
do not. Check with your real estate agent or your lender
for more information.
Expect the unexpected– you’ll need more
than just the down payment to close the deal!
Do you have enough "extra" money to cover unexpected
costs? This often-over looked detail has sunk many a good
deal. Consider arranging a line of credit if
you don’t already have one. It will give you the peace
of mind that you can afford any unexpected expenses when they
come up. A Buyers Agent can alert you to expenses associated
with buying your home that go beyond the down payment:
- sales tax (if it is a new house)
- appliances
- property taxes
- cost for property survey and building inspection
house insurance
- additional life insurance
- lawyer/notary fees
- appraisal & inspection fees (maybe, this is negotiable)
- government fees
- home warranty fees
- condo fees
- loan fees
(See our Special Report on “Buyers
Closing Costs” for more detailed information)
You will need to finance any renovations you want to do
when you move in and any additional furniture you will need
to properly furnish your new home. Experience indicates the
more money you have on hand, the better. Your real estate
agent will be able to help you estimate all those costs.
Tips for the trenches - how to find your dream home
without losing your shirt.
-
You’re not an expert, do you want one to
help you? Consider getting a real estate agent,
known as a “Buyers Agent”, to assist you.
This definitely makes your searching more efficient and
may not cost you, the buyer, anything. An agent will not
only help you streamline your search for the perfect home
(finding homes that match your criteria, making appointments
for viewing etc.) but they will also help you navigate
through the process of making offers and counter-offers
and will be there to make sure the closing goes through
smoothly, including getting the house keys for you (you’d
be surprised how often this little detail gets overlooked!).
-
Do you have the time to “go it alone”?
If you prefer to go house hunting without an agent working
for you, you will have to do a lot of homework to make
sure you know what you can expect for your price range,
what a reasonable offer would be and what terms to include
in your offer. A mistake here can be costly.
-
Banks are not your only source of funds!
Mortgage brokers can simplify things for you when you’re
searching for the right mortgage. This is anther instance
when a “Buyers Agent” can offer invaluable
advice.
-
The “biggest and best” house on the
block is not always the best investment! In general,
most real estate professionals will advise you not to
buy the best house in the neighborhood. That’s because
a house will always be judged by its neighborhood and
if you buy the “best” house then the rest
of the neighborhood is never good enough! Typically, the
most modest house in the neighborhood will afford the
greatest return.
-
Look at homes IN YOUR PRICE RANGE! Don’t
let your real estate agent or
your curiosity lead you into homes that you can’t
afford. You will inevitably see
something in a more expensive home that you like and then
may end up
dissatisfied with the quality of home that fits your budget.
And you certainly don’t want to over extend yourself
financially.
-
Don’t forget to keep the resale value in
mind. Even though you haven’t moved in
yet you should keep the re-saleability of a potential
home in mind. If it has peculiar features that you think
you can live with, others may not agree and it may prove
to be more difficult to sell when it comes time for you
to move on. Your agent can give you invaluable advice
here.
-
Don’t buy the first home that you see!
Even if a house gets bought out from under you, don’t
despair; chances are that there will be other homes out
there that will be just as suitable for you. It’s
a big decision so don’t feel pressured to jump before
you’re ready.
-
Get an inspection. Any offer you make
on a house should be contingent on a
building inspection by an inspector you choose yourself.
It will not only make sure you know what you are buying,
but it will also help you make your purchase with confidence.
-
Do you need more life insurance? You
will want to consider adjusting your life insurance when
you purchase your home. Many financial institutions will
offer you life insurance on your mortgage, which will
cover the balance of your
mortgage if anything should happen to you or your partner.
However this
insurance only covers the cost of the remaining mortgage
and once the mortgage is paid off you’re left with
nothing, which may be just what you want. But if you’re
looking for additional insurance to cover funeral costs
or to help your family after you’re gone, then you
may want to opt for more standard life
insurance, which does not increase in value as you pay
off your house but leaves you with a policy when all is
said and done. Consult a professional.
-
Ask some one who has “been there”.
Talk with friends or acquaintances that have recently
purchased a home. What did they go through? What advice
can they offer to you? What would they do differently
the next time around?
In Conclusion:
Take your time and arm yourself with information.
Buying a home is an emotional
process as well as a financial one. Be patient with the process
and expect the unexpected or consult a Buyers Agent and work
with a professional who knows what to expect. The right attitude
will help make buying a home an exciting and pleasant experience.
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