When it comes to buying and selling a home, there are many opinions on the real estate process. From when to sell to where to buy, how to negotiate and what to look for, there’s no shortage of information being thrown your way.
Like with anything, what you read or hear isn’t always factual. Sure, it may be rooted in truths, but things can get twisted. This is why we recommend contacting a REALTOR® to help you on your real estate journey. They’re the experts and can bring a multitude of professional experience, designations, and certifications to the table, helping you navigate an otherwise stressful process.
We reached out to a few REALTORS® across Canada to help provide some clarity on the most common real estate misconceptions.
Misconception No. 1: You shouldn’t call a REALTOR® until you’re ready to buy
It’s not uncommon to hear people say contacting a REALTOR® is the last step before you’re ready to buy, but in fact, it’s the opposite.
“The sooner you’re equipped with expert knowledge, the better. The questions or concerns you have might be easily answered by a REALTOR® in seconds. More importantly, factors you may have been overlooking might be brought to your attention. Ask questions and get to know the person who will be assisting in one of your biggest purchases!” says Joe Bae, REALTOR®, RE/MAX Crest Realty in North Vancouver, British Columbia.
“The best policy is to interview a few real estate agents if you don’t know or have one. Once you’ve chosen an agent to work for you, explain all your needs and make a list of your criteria, including desired area,” says Debra Presley, REALTOR®, Diamond Realty & Associates Ltd. in Calgary, Alberta.
“My advice is to use your REALTOR® as a life-long guide when it comes to real estate. I’d encourage buyers to start the process early, so when you’re ready to buy, you feel you have the knowledge and guidance already built in. I’m a huge believer in using data and past trends to help steer the future and it’s never too early to start familiarizing yourself with the market, process, and fundamentals that will make your future transaction successful,” says Casey Archibald, REALTOR®, Archibald Real Estate Group, RE/MAX Crest Realty, Vancouver, British Columbia.
Misconception No. 2: It’s OK to skip a home inspection
Home inspections aren’t mandatory when purchasing a home, but they’re recommended to help protect you.
“New homes, old homes, all homes should be inspected thoroughly by a qualified inspector. Even brand new homes can have inspection deficiencies overlooked by the builder. Your inspection is an excellent tool to make sure you head into your purchase with your eyes wide open in terms of immediate necessary repairs and ongoing maintenance items,” says Eric Wilkinson, REALTOR® with CENTURY 21 Fusion in Saskatoon, Saskatchewan.
“It’s a terrible idea to skip a home inspection — the inspector will give you information about the mechanical and electrical systems, but they also have ways of seeing the issues we can’t on a simple visual inspection. The wall may look dry to the naked eye, but there could be water or a temperature differential in a certain spot that can be an indicator of a more serious issue. Get an inspection, speak with the inspector after they have inspected the property, and ask questions once you have read the report,” says Daniel Engel, Broker with RE/MAX Hallmark Realty Ltd. Brokerage in Toronto, Ontario.
Misconception No. 3: Down payments are the only upfront costs
Saving for a down payment is what most people focus on when beginning their home buying journey — this isn’t a bad thing — but often we forget there are additional costs associated with the purchase of a property, and being unprepared for them could leave you in a tough spot.
“There are a lot more fees you might not have thought of. Some examples of upfront costs are: home inspections, mortgage appraisals, property transfer tax (if applicable), GST (if applicable), closing lawyer or notary fees (if applicable), movers, cleaning, etc. While upfront costs are important, knowing about other hidden costs could make or break your homeownership experience,” says Bae.
“Down payments are one of the closing costs. It may be the largest cost, but you still need to pay the lawyer to close the transaction, you have your land transfer tax which is a substantial cost and changes depending on your purchase price, and depending on the agreement of purchase and sale you may have an HST commitment,” says Engel.
Misconception No. 4: Condos with cheaper fees are always better
Paying additional fees on top of your mortgage can be tough, but it’s not always worth finding the lowest condo fees in order to avoid those costs.
“Reviewing condo documents for the finances, reserve fund, and overall costs is important — a new owner doesn’t want a surprise assessment after they’ve taken possession. Higher condo fees usually mean the work has been completed and the building is well taken care of by the management company,” says Presley.
“Condos with cheaper fees might not have an adequate budget or funding required to operate the building smoothly. This may eventually (or soon) lead to an increase of fees in the future. Secondly, the condo may not be performing all the recommended or required maintenance or repair work. On the other hand, it may not be contributing to the contingency reserve fund adequately, which may lead to a bigger lump sum payment called special assessment in the future. Instead of looking for the cheapest condo fees, you should put a cap on what fees you’d like to avoid, and make sure that the condo fees are being put to proper use,” says Bae.
“It isn’t always the case and it’s important to look at what’s included in the maintenance fee and what the history of the building’s finances are. Building A may have a lower maintenance fee than building B, but building A regularly uses special assessments to fund repairs whereas building B has never had a special assessment and all utility bills are included in the fee. It’s so important to look at what you’re getting for your monthly fee and have a lawyer look at the status certificate to see if there are any assessments or a history of them. Look at the whole picture, not just the dollars and cents,” says Engel.
This is by no means a comprehensive list of real estate misconceptions, but it goes to show why working with a REALTOR® is so important. You always want to make sure you’re getting accurate, up-to-date information so buying or selling your home can be as stress-free as possible!
— Realtor.ca