Purchaser's Helpful Hints

So you want to buy a house? But you don't know where to start? This seems to be quite common amongst potential purchasers - particularly first time buyers. We really feel that it is important to have a systematic approach to looking for a home. It makes buying a home so much easier. We thought we would take the time to outline the steps for you, as we see them.
Here's the list:

1. Locate the general area where you are interested in buying and familiarize yourself with it by driving around. You may also want to see if the area is affordable by looking at the real estate ads in the newspaper.
2. Find a local real estate agent who knows the area where you want to buy. Explain to the agent your relationship will be on a trial basis and then use that agent exclusively - as long as you are working well together. Virtually all homes are listed MLS and can be shown by any agent. Loyalty to one agent will help to create a reciprocal loyalty to you. There are several ways in which a concerned agent can help to save to save you money.
3. Before you look, go over your house, area and price requirements with your agent.
4. Obtain copies of all area listings to read thoroughly - this will help you to weed out unsuitable properties and to save time and energy.
5. Go over your finances with your agent. He/she should be able to give you an idea of what you can afford, required downpayment, closing costs, lawyers fees, etc. Your agent should also have an idea of which financial institutions would be most responsive to your needs. If possible, go to the lender and get pre-approved for your mortgage.
6. When you do go to look at property, wear comfortable clothing and slip shoes (you'll be taking your shoes on and off endlessly). Take copies of the listings for the properties which you are going to see. Write your comments in the margin - it can be difficult to remember five or 10 properties at the end of the day without doing this.
7. You may want to view properties a second time when you get a short list of possibilities.
8. If the home you are considering is older, or if there are concerns about soundness of construction, you may want to make your offer conditional on the approval of a property inspector. The fee for this service is usually a couple hundred dollars - it may save you money in the long run.
9. By this time you should have a feel for the values of properties in the area. You should also have an idea of what you want and what you can afford. It's time to make an offer! The only think you will need to make the offer is a deposit cheque. This is the last money that will be required from you until closing. The amount of the deposit can vary from area to area. In our area, the average deposit is between $1,000 and $5,000. If you or your spouse will be hard to reach during the offer process, then the offer can be presented in one name - both names can then be registered on title upon closing.

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What Every Home Buyer Should Know

If you are thinking of purchasing a home sometime in the future, then it is extremely important that you have some grasp of agency relationships. So what is meant by the term "agency relationships?" Basically, we can define agency relationships as the delineation of the responsibilities of each agent in a transaction - to whom does each agent owe allegiance or, to put it more simply, who works for who? Here in Manitoba, as of January 1, 1995, agency disclosure became mandatory. In plain English this means that all agents party to a transaction must now state in writing who they work for. But how does this affect you, the buyer? Why is this such an important issue? Well, let me give you an example to illustrate my point.

The year is 1994. You are looking for a home with "your agent" - someone you have been looking with for a number of months. Anyway, you have finally found the house you were looking for and you decide to put in an offer. So you tell "your agent" to prepare an offer for $120,000. You also tell him that you really like the house and are prepared to pay up to $130,000 if necessary. The house is listed at $131,900. So the agent presents the offer to the seller and his listing agent and says: "I should tell you that although this offer is for $120,000, my purchaser is prepared to pay up to $130,000". This would, of course be disastrous for the purchaser. And let me say that this type of situation has been completely rare!

So what went wrong? Why did the agent "betray" the purchaser? The problem here is that the purchaser's agent was actually working for the seller - the purchaser was only the agent's "customer". The agent's primary obligation was to the seller and not to the purchaser. The purchaser in this scenario was obviously not aware of the agent's legal obligations - or he wouldn't have confided in the agent. Although many people don't realize it, this type of representation - where the purchaser has no representation - was actually the norm in Manitoba prior to 1995. All agents were paid by, and owned a primary duty to, the seller. This was true 99% of the time. Generally speaking, purchasers had no representation. Now it is precisely because of situations like the above illustration that disclosure became mandatory in Manitoba ( in this example the purchaser might be justified is suing the agent because he was not informed about the agent's allegiance). And now, due to the awareness which disclosure has created, it is becoming more common for the purchaser to seek representation from agents. Obviously, it is the next logical step. Very little else changes except the allegiance of the purchaser's agent - and the agent can still be paid by the seller through the MLS system (there is nothing to say that an agent must receive his/her fee from his/her client - in this case, the purchaser).

So what have we learned here? Well, we should first note that the principles of agency illustrated here apply everywhere. This is not just a Manitoba issue. The crux of this issue tells us that we must first find out who the agents we are dealing with are working for - assuming that disclosure is not mandatory. You will be asked to sign a document that will outline the allegiances of you and your agent - indicating that you understand it. No problem. If you are not being represented by the agent the next step is to try to obtain representation. I have noticed that it is not the usual practice in some areas for agents to represent their purchasers. So, if this is the case, and you're on your own, the best you can do is to act correctly according to your agency relationship. In other words, don't confide in "your agent" - at least you shouldn't say anything to the agent that you don't want the seller to know.

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Please read though our information pages listed below:

Buying Information Selling Information

General Tips Community Info

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