Your Questions, Answered

Q: What should I look for in a Realtor®?

A: It is important to do some research when selecting a Realtor to represent you in the purchase or sale of your home. You may in fact, interview Realtors to find one that best suits your style. Things to consider are experience and expertise, local market knowledge, client references, good communication skills, availability, marketing strategies, ethical standards, and personal compatibility. You may be spending a considerable amount of time with your Realtor, so finding someone you trust and can communicate with is paramount. Your Realtor is your trusted professional who will guide you through the real estate process with confidence.

Q: What if I put my house on the market & can't find what I am looking for in my price range?  What are my options?

A: The idea of selling your house before you find your new home can be very daunting. However, in many cases, this may be required to secure financing. If this is the case for you, good communication with your Realtor and Mortgage Broker is key to your success! Some strategies you may consider are: extending the closing date on your sale so that you have more time to shop for your dream home, taking out a bridge loan which is a short term loan used to secure permanent financing and bridge the gap between your 2 mortgages, make the offer on the house you would like to buy  contingent on the sale of your existing home, request a lease back option from your buyer, or rent a home temporarily while you are waiting for the perfect home. Each of these options has its pros and cons, so it's essential to work with trusted professionals to assess your specific situation, financial position, and market conditions to determine the best course of action.

Q: If the house I am interested in is receiving multiple offers, how do I make my offer stand out?

A: In a competitive market where there are multiple offers on a house, it's important to make an appealing offer. Here are several strategies to increase the competitiveness of your offer:Offer a strong price if you can afford it, it is not unusual in a hot market for houses to sell above list price. Make sure you have a pre-approval letter from your Mortgage Broker, this will show that you are financially ready to purchase. Avoid asking for too many conditions, waiving contingencies is a way to make your offer more competitive; however, be cautious not to take on too much risk! Be flexible on closing terms, offering a closing date that suits the seller’s needs will be advantageous to them. Be quick to respond to any communication with your Realtor so they may negotiate effectively, and when all else fails, a personal letter to the seller telling them about yourself may help to win them over.  You can significantly enhance the competitiveness of your offer in a multiple-offer situation, ask your Realtor to help determine what strategies are best for you.  

Q: How do I determine a fair asking price for my home?

A: Your Realtor will prepare a Comparative Market Analysis (CMA), an in-depth report comparing your home to similar properties. With access to multiple listing services (MLS), they can provide insights into local market conditions and pricing strategies. Assess your home’s condition and consider any upgrades and renovations. Having a list of improvements and notable features ready when you meet your Realtor is wise. Some features will justify a higher asking price. Your Realtor’s knowledge of your neighborhood and recent sales can help you achieve the best value for your property. Remember, the market is always changing; overpricing your house can be detrimental to your sale. Your Realtor will help you formulate a winning pricing strategy that maximizes interest, attracts serious buyers, and increases the chances of a timely and profitable sale. 

Q: What do you think my house will be worth next year?

A: Unfortunately, there is no crystal ball to determine where the housing market is going to go in the future. Predicting the future value of your home is challenging due to numerous variables, including economic conditions, local market trends, and changes in interest rates. To estimate your home's future value, consider local market cycles and upcoming developments in your area that could impact its value. While factors like location and economic conditions are beyond your control, you can influence your home's value through maintenance and upgrades. For current valuation, consult a local Realtor who can provide insights based on your property's specific characteristics and market context. Ultimately, the best time to buy or sell is when it suits your individual needs. 

Q: What is title Insurance, and why might I need it?

A: Title insurance is a type of insurance policy designed to protect property owners and lenders against potential issues related to the ownership of a property. It ensures that your ownership rights are secure and can provide peace of mind by covering legal fees and potential financial losses arising from title defects. Title insurance covers various risks such as: unknown liens, fraud and forgery, errors in public records, title disputes, survey errors, unknown lack of permits, encroachments, and zoning issues. It is typically purchased at the time of closing when you buy a property, but can also be added at any point while you own it.  You can purchase through an insurance company or through your real estate lawyer, who can arrange it on your behalf. Consulting with a Realtor or lawyer can help you understand the specific benefits and costs of title insurance for your situation. 

Q: What is the difference between a mortgage pre-qualification and a pre-approval?

A: Pre-qualification and pre-approval are two stages in the mortgage application process that differ in their depth of analysis and level of commitment from the lender. Pre-qualification involves borrowers providing basic financial information, such as income, assets, debts, and credit score, to the lender or mortgage broker. This information is used to give borrowers a preliminary estimate of how much they may be able to borrow. A pre-approval is a more rigorous and formal process involving a comprehensive review of the borrower's financial situation, employment history, credit score, and debt-to-income ratio. The lender provides a conditional commitment to lend a specific amount, pending appraisal of the property and other final checks. Pre-approval carries more weight in real estate transactions as it demonstrates financial readiness and commitment to the sellers, making it beneficial for borrowers when making offers on homes. 

Q: How much do I pay my Realtor for their services?

A: Realtors in Alberta commonly earn their compensation through commission-based structures, depending on the final sale price of a property. 

Seller Representation: When representing sellers, realtors sign a listing agreement outlining the terms of the listing, including the commission rate. If both a listing agent (representing the seller) and a buyer's agent are involved in the transaction, the total commission is typically split between them.

Buyer Representation: Buyers sign a buyer representation agreement with their realtor, detailing the services provided and any fee arrangements. Buyers typically do not pay their realtor directly; the seller covers the commission for both the listing agent and the buyer's agent from the proceeds of the sale. Realtors are required to disclose their fees and commissions to their clients as part of their professional obligations. It's crucial for clients to have clear communication with their realtor regarding fees, commission rates, and any associated costs upfront before entering into any agreements. 

Navigating the real estate market can be complex, but with the right knowledge and guidance, you can make informed decisions. We hope this column has answered some of your burning questions and provided valuable insights. If you have more questions or need personalized advice, don't hesitate to reach out to the Jason Rustand Team. We are happy to help!