Angela Kroemer
Accredited Mortgage Professional
www.KroemerMortgages.com
akroemer@mortgagegroup.com
250-650-4182
7 Steps to buying property privately
If you decide to buy property privately without the help of a real estate agent, you need to understand how the process works. In this concise, but informative, buyer’s guide, we explain each step of the way to reaching your dream – to put you on the right track and hopefully make you realize that buying real estate privately is neither very different from using an agent, nor as complicated as it may seem.
Step 1: Work out the price bracket you can afford
This may sound obvious, but you would be surprised how many people actually overstretch their budget when buying a property, only to find it difficult to keep up with mortgage payments or realize that they have no money left over for any necessary property renovations.
Consult with a Mortgage Professional, they can easily tell you what you qualify for and how much you can afford based on your income, liabilities and credit report. Also how much of a downpayment you will need, as well as closing costs.
By getting pre-approved for a loan, you will know where you stand.
Keep in mind that this total sum will have to cover the purchase price, transaction fees and taxes and any immediate work you will have to do on the property before you can move in.
Step 2: Find out which areas you are interested in
Do some homework on the areas available. Browse the Internet for information on those areas that catch your interest. Also, use the Internet to make a quick search for property for sale online, to get an idea of what properties are available in your price bracket and where they are located.
Eventually, you’ll have to make the trip and visit the areas you are interested in for yourself. It’s best to drive around so that you can get a better feel of the areas and their surroundings. On your way, keep a lookout for services such as shops, schools, medical facilities etc. It is also a good idea to visit at different times of the day and on different days to get a better idea of traffic conditions, weather and so on.
Step 3: Search for properties in your areas of interest
The best – and most convenient – place to start searching for your property is the Internet of course.
If you don’t find what you are looking for online, you could check the classified adverts in local newspapers or even drive around the area looking out for ‘For Sale’ signs.
There are several companies that have For Sale By Owners. As you can see there are no shortages in For Sale By Owner advertising.
http://comoxvalley.en.craigslist.ca/reo/
http://propertyguys.com/search/?k=courtenay%2C+BC
http://bcforsalebyowner.com/city/Courtenay
http://www.forsalebyowner.ca/listing/house-for-sale-courtenay-BC/123592
http://www.bcislandhomes.com/
http://comoxvalley.kijiji.ca/f-real-estate-houses-for-sale-W0QQCatIdZ35
http://www.usedcourtenaycomox.com/classifieds/house-for-sale
http://www.homesbyowner.com/courtenay
http://comfree.com/homes-for-sale-courtenay
Step 4: Schedule viewing appointments with the property owners
Once you have identified one or more interesting properties, call the owners and get as much information about the property as possible over the phone. Choose the ones you want to visit and arrange a time with the owners for a viewing. Before your property inspection visit, you should come up with a checklist of points to look out for. This property inspection checklist I have prepared is a good place to start.
When you visit a property in the presence of its owner, it is common to feel like you are intruding into someones life, especially if the property is being lived in. However, remember that as a buyer it is your job to inspect the property thoroughly and that the owner actually expects you to do this. Naturally, politeness and common courtesy will go along way in this situation.
Most importantly, don’t shy away from asking the owner any questions you may have. Be sure to find out:
the age of the property
how long the seller has owned it
why the house is being put up for sale
how much condo or strata fees are (if applicable)
the location of and distance to nearby services
which furniture or fittings will be sold with the house (though remember you are buying a house, so don’t be swayed by fancy extras)
Step 5: Get an independent evaluation of the property (optional)
Although this is really an optional step, it is highly recommended that once you are very interested in a property, you have it inspected by a qualified Home Inspector or have an Appraisal done. This will give you an objective appraisal of the property, tell you if the property is overpriced, and even point out any important things you might have missed.
If you are mortgaging the Property, you might want to coordinate with your mortgage professional as most private sales will need an appraisal done, by the Lender, usually paid by you. So, unless you want to pay twice, ask your mortgage professional about the Appraisal. A Home inspection can be done beforehand, by you or a qualified home inspector, for your piece of mind.
The best – and most convenient – place to start searching for your property is the Internet of course.
If you don’t find what you are looking for online, you could check the classified adverts in local newspapers or even drive around the area looking out for ‘For Sale’ signs.
There are several companies that have For Sale By Owners. As you can see there are no shortages in For Sale By Owner advertising.
http://comoxvalley.en.craigslist.ca/reo/
http://propertyguys.com/search/?k=courtenay%2C+BC
http://bcforsalebyowner.com/city/Courtenay
http://www.forsalebyowner.ca/listing/house-for-sale-courtenay-BC/123592
http://www.bcislandhomes.com/
http://comoxvalley.kijiji.ca/f-real-estate-houses-for-sale-W0QQCatIdZ35
http://www.usedcourtenaycomox.com/classifieds/house-for-sale
http://www.homesbyowner.com/courtenay
http://comfree.com/homes-for-sale-courtenay
Step 4: Schedule viewing appointments with the property owners
Once you have identified one or more interesting properties, call the owners and get as much information about the property as possible over the phone. Choose the ones you want to visit and arrange a time with the owners for a viewing. Before your property inspection visit, you should come up with a checklist of points to look out for. This property inspection checklist I have prepared is a good place to start.
When you visit a property in the presence of its owner, it is common to feel like you are intruding into someones life, especially if the property is being lived in. However, remember that as a buyer it is your job to inspect the property thoroughly and that the owner actually expects you to do this. Naturally, politeness and common courtesy will go along way in this situation.
Most importantly, don’t shy away from asking the owner any questions you may have. Be sure to find out:
the age of the property
how long the seller has owned it
why the house is being put up for sale
how much condo or strata fees are (if applicable)
the location of and distance to nearby services
which furniture or fittings will be sold with the house (though remember you are buying a house, so don’t be swayed by fancy extras)
Step 5: Get an independent evaluation of the property (optional)
Although this is really an optional step, it is highly recommended that once you are very interested in a property, you have it inspected by a qualified Home Inspector or have an Appraisal done. This will give you an objective appraisal of the property, tell you if the property is overpriced, and even point out any important things you might have missed.
If you are mortgaging the Property, you might want to coordinate with your mortgage professional as most private sales will need an appraisal done, by the Lender, usually paid by you. So, unless you want to pay twice, ask your mortgage professional about the Appraisal. A Home inspection can be done beforehand, by you or a qualified home inspector, for your piece of mind.
Step 6: Negotiate the price and terms of the sale
There is no reason to shy away from negotiating when you buy property. If the owner already has the home as low as they will go ask for other items like property taxes paid till end of year, home professionally cleaned upon your move in, lawnmower and outside tools (if needed).
How much you can negotiate price-wise will largely depend on three things:
how long the property has been on the market
how urgently the seller wants to sell
and how much interest the property is attracting from prospective buyers
if the home inspection discovers problems with the house
most private sales, are at the lower dollar figure, so low balling on the offer will not work
Keep in mind that by selling privately, the seller is saving thousands of dollars in real estate agent fees, so, in a private sale, check to see if the discount is already there. The seller may also be more willing to drop the price a bit if they have demanding sales terms that you can accommodate (for example either a very short or more drawn out transaction period).
Once you have agreed upon a price and upon a date when the sale will take place, you will sign a Promise of Purchase and Sale Agreement with the seller before a Lawyer or notary, laying out all the terms of the sale, and pay the seller a deposit on the property. This will guarantee you the right to buy the property at the agreed price for a limited time (usually around 3 months) while your lawyer reviews the transaction and you make the necessary financial arrangements.
There is no reason to shy away from negotiating when you buy property. If the owner already has the home as low as they will go ask for other items like property taxes paid till end of year, home professionally cleaned upon your move in, lawnmower and outside tools (if needed).
How much you can negotiate price-wise will largely depend on three things:
how long the property has been on the market
how urgently the seller wants to sell
and how much interest the property is attracting from prospective buyers
if the home inspection discovers problems with the house
most private sales, are at the lower dollar figure, so low balling on the offer will not work
Keep in mind that by selling privately, the seller is saving thousands of dollars in real estate agent fees, so, in a private sale, check to see if the discount is already there. The seller may also be more willing to drop the price a bit if they have demanding sales terms that you can accommodate (for example either a very short or more drawn out transaction period).
Once you have agreed upon a price and upon a date when the sale will take place, you will sign a Promise of Purchase and Sale Agreement with the seller before a Lawyer or notary, laying out all the terms of the sale, and pay the seller a deposit on the property. This will guarantee you the right to buy the property at the agreed price for a limited time (usually around 3 months) while your lawyer reviews the transaction and you make the necessary financial arrangements.
Step 7: Always have different lawyers to conclude the sale
Once your lawyer has made the necessary research about the property and gives the all clear for the sale to go ahead, have your lawyer send the documents to the sellers lawyer, to be signed. All mortgage documents should also have been sent to your Lawyer.
Once your lawyer has made the necessary research about the property and gives the all clear for the sale to go ahead, have your lawyer send the documents to the sellers lawyer, to be signed. All mortgage documents should also have been sent to your Lawyer.
