What to expect from your agent when you buy
by Hugh Hardy
In this week's column I'd like to cover a few of the distinguishing features of a good buyer's agent - not so much in terms of a personal profile, but more in terms of the specific areas where you should expect assistance.
Let's get right to the first and most significant issue - and that is representation. Most of us in the industry are getting used to the new way that Realtors work with buyers - as the buyer's own agent (but still paid by the seller). This has completely turned around in the last two or three years, and rightly so! As you may know, buyers used to have no proper representation and were serviced by Realtors who owed their allegiance to the seller. Thank goodness this has, for the most part, changed. So make sure that you sign a short term contract with your Realtor in order to obtain representation. This will allow your Realtor to work in your best interests - and to keep your secrets!
When you start out looking, the first thing that your Realtor should do for you is to provide you with MLS data on houses currently for sale - so that you can zero in on potential purchases. Virtually all homes, regardless of who the listing Realtor is, are on the MLS. Looking at ads can often be a waste of time and throw you off the trail because ads usually don't give location, contain less hard data, and only mention the positive aspects of a property. You should only work with MLS listings. If you should see an ad that looks interesting, it can be cross-referenced with the MLS.
If you rely on a knowledgeable Realtor to help you interpret the data contained in the MLS, you can save a lot of time. Additional to this, your Realtor should be able to help you determine your wants and needs, and to help you to prioritize these points, in order to filter the MLS data. If you have a Realtor with a history in the area that you are looking, then you can obtain advice about specific neighbourhoods and maybe even specific homes. I know that I have often had clients ask me about specific homes on the market that, coincidentally, I have previously sold. Knowing the history of a home can be a real advantage to a prospective purchaser.
Your Realtor should help you maintain focus when you start looking at homes. It's easy to start wandering into unaffordable price ranges and impractical locations. The Realtor should always be reiterating your needs and keep you from buying a house that you will later regret. I try not to show large numbers of homes in one outing. And I always try to follow up the viewings with some discussion of what we have seen. This helps to maintain focus. Seeing 20 homes in one outing can be confusing.
Now let's talk a bit about financing. Any Realtor should be able to help you by working out the size of mortgage that you would qualify for at the bank. Beyond this, different mortgage scenarios should be "played with" as well. How much would the payments be if you were to spend $10,000 less than planned? What is the monthly payment with a 20 year amortization instead of a 25 year? How about different mortgage terms and thus interest rates? This is all easy stuff to work out. Your Realtor should also have a knowledge of current programs - like the CMHC 5% down program, borrowing from your RSP, land transfer tax rebates on new homes, etc. Your Realtor should also have a good knowledge of what separates the different lending institutions in terms of incentives, bottom line interest rates, and levels of mortgage flexibility. Lastly, your Realtor should be able to help you find the best lender for you.
Well, that covers a few points to look for from your agent when you are buying. It is worth mentioning that there is a whole lot more to it than what I have been able to cover here - due to space limitations.
Next week, I'll talk a bit about drafting and negotiating the offer - from a buyer's point of view.
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