Sarah had her heart set on the quaint duplex on the pretty avenue that paralleled the town's main street. But she postponed the home inspection when her mortgage broker noticed the commercial zoning. Working with two mortgage brokers, she finally secured financing but walked away rather than pay 25 instead of 20 per cent down and commit to a higher interest rate that increased the monthly payments.
"My realtor and I assumed that zoning wouldn't be an issue in a residential neighbourhood - obviously we should have read the listing more carefully, " says Sarah. "The commercial zoning didn't render it unaffordable but it did make it less financially appealing. The commercial zoning affected my reaction to the property and I was concerned that it could be an issue when I wanted to sell it. Real estate professionals tried to convince me that it could be an advantage but I didn't see it that way." To make sure the sale is completed, buyers and sellers need to obtain the pertinent information well ahead of the closing date so that they can manage, handle and/or eliminate any surprises that they can delegate the bulk of those tasks to the professionals ( realtor, home inspectors, mortagage brokers, bankers, lawyers ) that have the required expertise, resources and experience. Ultimately, buyers and sellers will save themselves time, money and stress and know that they've done everything they can to finalize the sale.
" Whether you're buying or selling obtaining the data you need to make and informed decision is your responsibility not your realtor's ,your lawyer's or anyone else's - do the diligence yourself or get it done for you,but do it," says Don R.Campbell. president ,Real Estate Investment Network, a research , education and consulting firm focused on how economic fundamentals affect real estate markets across Canada. " You are the CEO of this transaction - it's your signature on all of the paperwork not theirs."
" In most cases, sellers and buyers don't do the diligence because they truly don't know what is required. Meanwhile, your professionals may assume that you know what to do and don't want to risk insulting or offending you by making suggestions or providinga to-do list", adds GS, a realtor who specializes on first time buyers .
" Offers include conditions to protect the buyers should circumstances change or new information unexpectedly appears not a change of heart or cold feet. If buyers are looking for a way out of a deal while signing the offer, it's likely not the house for them", says BVK, a Toronto realtor
Lets look at what buyers and sellers can do to ensure the sale is completed.
BUYERS
PRE-OFFER
1.PRE-APPROVED FINANCING : Be sure that you will financing before you commit to an agent and begin your search.
IMMEDIATELY AFTER THE OFFER
2.TITLE SEARCH : Campbell notes that 95 percent of homebuyers first see the copy of the title when they sit down with their lawyers to complete the sale, which is the biggest mistake they could possilbly make. Spend the $10 to pull the title immediately after placing the offer. This will give you more time to unsnarl legal snafus and negotiate with the seller or walk away if there is a builder's lien on that property, a neighbour actually holds the right of first refusal on the property or the property is part of a marital dispute.
" Your team members may protest, in fact, they may think you're bonkers, but they work for you not the other way round - remember that!" says Campbell . " You have every right to know exactly what you're buying."
3. HOME INSPECTION : Proactive sellers may present you with a home inspector's report, but many buyers will pay for another home inspection rather than rely solely on the sellers' which they may perceive as biased.
" Even if the sellers have done their own inspections, many want buyers to bring in another inspector so that there can be no claim of a biased report and potential backlash later," says VK . " Buyers need to be realistic about home inspectioons. No property is perfect and the inspector's job is to give a professional , non-biased report on the condition of the house and its systems."
4. COMMUNICATE, COMMUNICATE, COMMUNICATE : Keep the seller apprised of status ( you're on track or expect delays ) as well as your next steps." It builds the trust and spirit of openness you may need if you require an extension," says Campbell." If they know there might be a delay and why you need an extension well ahead of time, they may be more receptive."
SELLERS
" Disclosure is the golden rule. Disclose,disclose,disclose to protect yourself from potential headaches or worse, litigation," says VK. " As a seller, be honest about what you know and what you don't know about the property."
1. PREPARE A DUE DILIGENCE PACKAGE : Promote your due diligence in the MLS listing and on sell sheets. List the information it includes ( e.g. title, home inspection report, receipts for recently completed repairs). " It doesn't cost the seller that much and it saves the buyer time and money," says Cmpbll. " It gives your property a competitve adge and tells prospects that you're coopertative, proactive and commited to full disclosure."
2. HAVE THE HOME INSPECTED BEFORE YOU LIST IT : Decide which repairs are required, then list the completed repairs with contractors' receipts and copies of warranties in the diligence package. Get quotes on the repairs that were not made and adjust your list price accordingly, then use that information to better manage the negotiations." With a home inspection report, you're negotiating based on the facts, when the prospect wants you to knock off $ 15,000," says Campbell.
3. 17 REASONS YOU'LL LOVE THIS HOME : Tell prospects why they'll love your home and neighbourhood. Make it personal. Give them the insiders' scoop on yur favourite dry cleaners, the world's best massage therapist and the Second Cup, Starbuck's, Tim Horton's and six independent cafe's that are within a two-minute walk of your home.
4. LET PROSPECTS KNOW YOU WANT TO SEE THE BANK'S LETTER OF COMMITMENT WITH OFFERS : Of course, as Santiago says, " Financing is highly personal, so prospects don't want you to see they're pre-approved for $280,000 if they want to get your home for $250,000." However your realtor can ask the buyer's realtor to confirm that they've been pre-approved and ask to see a letter of commitment from the bank.
5. BE THERE WHEN PROSPECTS VIEW THE PROPERTY : While many agents advise against this, Campbell says, " You should know your home and your neighbourhood better than anyone else - why not talk it up to prospective buyers ? "
Take responsibility , be proactive, do the diligence, get your professionals working for you early on and above all , communicate clearly, openly and frequently, and you'll up the odds the sale will be completed.