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Things to keep in mind when making a lowball offer

Making a lowball offer can be quite tricky. There can be many considerations that are important to ensure that your lowball offer is not completely unrealistic. Here are some factors you need to consider:

1. Market knowledge

Depending on whether it is a buyer’s market or the seller’s market, you may or may not have competition or negotiating power. Generally, in a seller’s market, homes are in demand, and you are less likely to win a lower negotiation bid. In the buyer’s market, your chances of winning a lower bid are much higher. It is necessary to account market conditions when trying to anticipate a winning bid. Have your agent do a comparative analysis to get an insight into what other homes have been sold in that area and for what price.

2. Duration of listing

It is important to consider how long has the home been listed in the market. Keep an eye out on the listings, and you may notice that a particular listing keeps appearing on your feed for a long time, chances are that the owner may get desperate to get rid of the property quickly even at a lower price. Of course, before finalizing an offer make sure to get the home inspected to rule out any damages or problems.

3. Lucrative clean offer in lieu of a low bid

If you have a reason to believe that a seller may be quite eager to sell quickly, consider making a clean offer. Although the seller most likely feels that their home is getting sold for too less of a price, removing conditions like financing clauses will help you gain mileage.

Having a pre-approved mortgage in place before you start shopping can establish a cleaner and easier transaction from many perspectives. For starters, you may already know what your financial capability is and can bid accordingly without looking for a property that is too low or too high on the price. As a seller, it will be quite easy in making a decision if your buyer has a pre-approved mortgage that establishes their buying prowess.

4. Understanding the seller

Knowing a seller’s perspective goes a long way in buying the right property. Understand the seller’s reasons for listing their home. This can help you to formulate a strategy when placing an offer. For instance, if the owner is selling the property to move to a bigger place due to a job change or addition to the family, they may be quite eager to get the property out of their way and can be lured through a clean offer rather than just a low bid.

5. Be fair

As a buyer, it is important for you to know the lower limits for a property. You may want to avoid offending the seller or the listing agent by proposing a totally unreasonable offer. Bear in mind that every seller wants a fair earning, just like every buyer wants a great deal on the home. Be professional and conscious about it and avoid wasting everyone’s time with an unrealistic offer that can’t be accepted. Always regard the market conditions, seller’s situation, home condition and the length of time the home has been on the market, along with other related aspects to come up with a reasonable and tenable price offer.

Knowing exactly what offer is tenable and what is not can be quite tricky. Real estate experts like Cherry Yeung can help you to come up with a realistic offer and give you a chance to find your dream home at a great price.

 

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Hidden Costs When Buying a House

The expenses don’t stop once you’ve put an offer on a house and it’s been accepted. That’s just the beginning of what seems like an endless fountain of added costs. To make sure you’re not blindsided by the hidden costs that come with buying a house, here’s everything you need to know.

The Home Inspection

Paying to have a home inspection done is necessary after putting a serious offer on a home and having it approved. This will be your first big expense in the house buying process and it will determine whether or not you’ll keep the home or back out due to major unforeseen problems. Depending on the age and condition of the home, you may need to hire more than one type of inspector. As there are general inspectors, wood and insect specialists and sewer inspectors, scheduling one (or more if necessary) will run you hundreds of dollars per inspection. While it seems like a lot, it’ll prevent you from moving into a home that needs thousands of dollars of work to be safe and liveable.

Closing Costs

Once your offer has been accepted, numbers are crunched to determine what your closing costs will be. You can expect closing costs to be two to five percent of the house’s purchase cost. Closing costs include lender fees, the home’s appraisal, title fees, escrow fees and interest. There are calculates to give you an idea of what the costs may be in relation to your budget, so you can better prepare yourself for the extra expense.

Higher Utility Bills

If you’re moving from a small apartment into a decently sized home, then expect for your utility bills to be higher than they once were. It’s common for gas, electricity and water to increase once you move into a house or space that’s bigger than your previous one. Compared to renters, it’s estimated that homeowners pay several thousand dollars more in utilities every year. To determine how much you could be spending each year, see if your realtor can ask the seller to see a few of their past utility bills. While this may be a long shot, it’ll be the most accurate estimate as to what you could potentially be paying.

Ongoing Taxes and Insurance

Property taxes and home insurance always add up at the end of the day, and many monthly mortgage calculators don’t include them when determining your expected payments. Taxes and insurance vary depending on where you live, but it could easily add $1,000 or more to your monthly payments. It’s important to budget for this expense, as not paying it will land you in a heap of trouble.

Maintenance and Repair Fund

Repairs have to be paid for yourself when you own a home, as opposed to having a landlord fix the problem for free. While this is generally common knowledge, the amount of money that these repairs can cost is not. It’s easy to underestimate how much a leaky faucet or jammed disposal will cost to fix, especially if it all happens at once. There’s no single answer as to how much yearly maintenance will cost homeowners, as every house is different. Several sources are available to help you calculate these funds, but try to save about three to four percent of the homes purchase price to keep as your yearly repair fund.

With Cherry Yeung as your Burnaby real estate agent, you’re guaranteed to find the perfect home. Experienced and knowledgeable about the Vancouver real estate market, Yeung knows all the ins and outs of buying and selling in Vancouver. Whether it’s a house or condo, Yeung has an excellent track record and is dedicated to helping clients find their dream property. Contact Cherry Yeung, Burnaby realtor today to get started!

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Freehold vs Non Freehold Estates

The two ways to hold title on a property is by owning or leasing it. A landlord’s claim to property is considered a freehold estate while a tenant’s title to a property is classified as a non-freehold estate. There are some key differences between the two types of claims that you should be made aware of regardless of if you are an owner or tenant.

Freehold estate is ownership of land. Two conditions must be met for a property to be considered freehold:

  • No fixed length of ownership – There is no predetermined timeline for the claim of the property to expire – it can be passed on forever.
  • Immovable – The title cannot be moved so it must be land or possess some sort of interest in land.

Types of freehold estates

There are three classes of freehold properties. They can all be passed on indefinitely, and some require specific conditions to be met to do so while others do not.

  • Fee simple absolute – The most common type of property ownership. The land can be used unrestrictedly within the confines of the law, especially zoning laws. There is no set length of ownership as long as taxes and the mortgage are paid. It can be transferred or sold to someone else. This type of property can also be inherited if the owner dies.
  • Fee simple defeasible – This type of land ownership is subject to specific conditions. These could be that the land must be used to grow corn or solely for educational purposes. If these conditions are violated then the ownership of the property is automatically terminated. The ownership of the land can also be terminated by the owner, which is instead called a fee simple subsequent.
  • Life estate – This type of property remains in the title of an individual for as long as the person who granted them the title in it is living. The person awarded the title is called the life tenant. They are responsible for making sure the property is in adequate condition. Although, the life tenant ceases to have claim over the property once the grantor dies.

Non-freehold estates

There are four types of non-freehold properties:

  • Estate for years – This type of lease has a set duration with a beginning and ending date. Most lease agreements would be classified as an estate for years.
  • Year to year estate – This type of lease renews each year. Typically, after a fixed term lease expires, a tenant becomes an individual becomes a periodic tenant. For example, this could happen when a one year lease ends on December 31st, and the landlord accepts payment on January 1st so that the tenant can continue to live there. The tenant would now be considered a periodic tenant. The landlord or tenant would now have to give notice of termination of the agreement much further in advance. Usually, one to two months before the lease would automatically renew.
  • Tenancy at will – There is no written contract between the tenant and landlord in this agreement. Either party can end the lease at any moment. There may still be requirements for how much notice must be given depending on municipal laws.
  • Tenancy to sufferance – Also known as a holdover tenant, this happens when the tenant’s legal right to reside at a property ends. The tenant no longer has the landlord’s permission to remain and could face legal action to be removed.

Whether you are looking to rent or own property, knowing the difference between these two estate types is crucial. Contact Cherry Yeung before you sign an agreement, and she will make sure the contract is in your favour.