Shopping around for a condo can be an exciting time, especially for first time home buyers. Mixed emotions are present and sometimes significant decisions are made on the spot. During this time, there are numerous things to keep in mind, yet it is easy to get sidetracked and forget what is most important.
In this blog post, I want to cover the three biggest mistakes I see first time home buyers make, when purchasing a Square One condo. I will outline each mistake, identify the common false belief which is then followed by the true fact.
1. Shopping For A Condo Using Only MLS – MLS (Multiple Listing Service) also known as www.realtor.ca is a great starting point for anyone interested in a Mississauga condo. In fact, over 92% of all properties that sell are listed on MLS. However, before any condo is placed on the MLS system and is accessible to the public, it is first placed on www.torontomls.net– a database only accessible to Realtors. Through this internal system, a good portion of real estate properties are sold before the public has a chance to place any offers on them.
False belief: “I do not want to hire a real estate agent when looking for a Mississauga condo because it’s going to cost me a lot of money”
Fact: Almost 99% of the time real estate agents do not charge their clients who are buying a property through them. The real estate agent’s commission is paid out by the seller of the property, which the buyer is purchasing. The other 1% (of the time) were commission is due by the buyer, is when they are under a BRA (buyer representation agreement) contract and the real estate agent introduces them to a property which does not pay the specified commission in the BRA. Most commonly this applies to private sales known as FSBOs.
2. Not Hiring A Real Estate Agent Who Knows The Area – Anybody who has a real estate license in Ontario, is permitted to trade real estate anywhere in Ontario. RECO and REBBA actually prohibit real estate agents from calling themselves “experts” in any particular field or area. However, a lot of the top performing agents like to focus their resources and time on one particular area and by doing so inevitably become the “community experts” . Having a focused approach translates into having a Realtor who understands the community at question. For those seeking a Square One condo, hiring a Realtor familiar with the City Center area, can make the new condo searching more pleasant, educational and save you time and money.
False belief: “My uncle, who is a real estate agent in Toronto, will help me find the best possible deal on a Mississauga condo.”
Fact: Having a distant Realtor in the family is great when you’re selling, but not so good when you’re buying. Any agent can take any property, do a CMA (comparative market analysis) and put it up on MLS for it to sell. However, it takes a lot more skill and practice to answer specific questions a buyer may have about a certain neighborhood. For example, here are some questions you may want to ask your Realtor when seeking a new Mississauga condo: “When was the building built?”, “Who was the builder?”, “How does this condo compare against other condos in the area?” In my opinion, hiring an agent who focuses on one particular area results in a great customer service experience and it saves the client time and money.
3. Not Knowing The Terms Of Your Mortgage – A lot of people get obsessed with finding the lowest possible interest rate on a mortgage. I have seen deals fall apart because clients were upset that the interest rate was 0.10-0.20% more than what they have anticipated. This type of difference in percentage translates only to a few dollars a month. Instead of being solely focused on your interest rate, talk to a mortgage specialist and inquire about the conditions placed on your mortgage. Do you have an option for pre-payment? Can you pay more if you want to? What is the penalty to terminate the mortgage term early? By no means am I a qualified mortgage personal, however, all of these are vital questions you should be asking.
False belief: “I’m going with the cheapest mortgage rate on the market, because that is going to save me the most money in the long run.”
Fact: As stated above, YES, mortgage interest rates are important when buying a Mississauga condo. However, what if you get a 5 year mortgage term and after only 3 years of living in your condo you are forced to sell? Do you know what kind of early termination fees you are faced with? These fees can go up to $20,000 or more! Do your homework.
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