Homework Before Home Buying

Purchasers scared by stories of spiraling prices - which often change from week to week - are snapping up new homes with an almost indecent haste. And, contrary to popular opinion, this method of buying doesn't sit well with reputable home builders.

Many people spend only two or three hours selecting a home on their first visit to a site before coming back a second time to sign on the dotted line.

Too many people later regret this type of purchase. Not fully understanding their contract or the current construction situation, their expectations are too high and their dream home turns into a nightmare.

Established builders want satisfied customers. Word of mouth is the best, or worst, advertisement for their products. So if you are buying a new home for the first or even the second time how should you go about it in today's torrid market?

Look at the community. Check with the municipality. Knock on doors of people who have already bought homes in the subdivision.

If it is a brand new subdivision where houses have not yet been built, locate a subdivision previously constructed by your builder. Go there and, again, knock on doors.

It is important that purchasers check with the municipality before signing on the dotted line. Building department inspectors can provide them with a lot of information.

Inspectors usually know the location of subdivisions previously constructed by the builder and will also tell you what amenities are available near your new home and the zoning for adjoining land.

Are there schools nearby? What type of recreation and shopping is available or planned? Inspectors can tell you.

Taking a little time will save you from some nasty surprises. Choosing your builder is important. In the past few years there has been a large increase in builders entering the Metro scene to cash in on a lucrative market.

One reason for today's panic buying is the fear that prices will increase if a purchaser delays making an offer. There is no need to panic.

It is always good to discuss your builder's offer with lawyers so they know what they are getting into. Choose lawyers who specialize in real estate. All this is good, solid advice. Buying a home is the most important investment most people will make and buying the right home will maximize that investment.

Take your time - you're not buying patio furniture...

RBC Report States - Housing to become more affordable in 2011

It is becoming more affordable to own a home, according to the Royal Bank of Canada, but the high cost of ownership will continue to keep the market steady and contain price increases. In its quarterly housing affordability report, RBC said home ownership cost decreased over the summer for the first time in more than a year. This is attributed to low mortgage rates.

But homes were still more expensive than long-term averages in many markets, suggesting “greater than usual tensions exist for Canadian homebuyers.” “These tensions are unlikely to derail demand for housing in the near term but will act as a restraint on growth in market activity going forward,” said RBC senior economist Robert Hogue. This is the first time affordability has improved since mid-2009. The following are provincial highlights from the report:

• British Columbia: In the third quarter of 2010, affordability in B.C. dropped between 1.8 and five per cent, representing the largest decline since the first quarter of 2009. But the measures remain above long-term averages and poor affordability will weigh down on provincial housing demand in the time ahead.
  
• Alberta: Homeownership in Alberta is among the most affordable in Canada both in absolute terms and relative to its historical averages.
  
• Saskatchewan: Current market conditions are stretching homebuyers’ budgets. However, those budgets are likely to be boosted from a strong expected rebound in the provincial economy and thus family income this year and next.
  
• Manitoba: Lower mortgage rates in the third quarter were particularly helpful in bringing down homeownership costs in the province although some price declines also contributed. Manitoba is one of only two provinces, alongside Alberta, where the measures for all housing types are currently below long-term averages, which will be a supportive factor for demand going forward.
  
• Ontario: Existing home sales ended their earlier slide by sustaining three straight gains from August to October. With the market now back in balance, the recent softness in home prices will likely prove to be healthy for 2011.
  
• Quebec: Following four consecutive increases, province affordability fell 1.4 to 1.8 per cent. Still, the measures remain close to the pre-downturn peaks and above their long-term average, which will restrain upcoming demand growth.
  
• Atlantic: Affordability levels returned to roughly where they were in mid- to late 2009. Overall, housing continues to be quite attractive in Atlantic Canad