Buyers Guide

BUYER AGENCY AGREEMENT

If you have any questions or would like more information about a buyer agency agreement please Contact Us.

The mere mention of the word ‘contract’ leaves many feeling trapped and wary, often rightfully so. The Buyer Agency Agreement, however, is not a contract to be feared. It is important to understand who your REALTOR® is working for and the buyer agency agreement outlines this in writing, making it a legally binding contract. By choosing to work with a REALTOR® and signing the Buyer Agency Agreement, the buyer is guaranteed the very best in real estate service.

When a seller lists his home with a listing agent they form an agreement which states that the REALTOR® must act for the sole benefit of the seller at all times. Most buyers assume that their REALTOR® is working on their behalf, but without the buyer agency contract the REALTOR® actually works as a sub-agent of the seller and therefore, has a fiduciary relationship with the seller, not the buyer. Without a contract, your REALTOR® is obligated to present a case that will support and protect the value of the property that the buyer is purchasing, but the rules change when a Buyer Agency Agreement is signed.

Once the agreement is signed, the buyer’s agent has a duty to educate the client. The agreement confirms your REALTOR®’s commitment to making the best effort for you by promoting and protecting your interest at all times. This means that your REALTOR® can now advise you of any defaults in the property; defaults which may even cause you to reject the home in favour of something more suitable. REALTORS®must give priority access to their clients and are obligated to use techniques and strategies that help advance the position of their clients. They must also disclose all details about the property, including information on any previous offers, financial and motivational details about the seller, and any knowledge that may strengthen the buyer’s position. The REALTOR® must work harder for you and make every effort to find you the home that best fits your needs and lifestyle, while negotiating the best possible price to meet your budget. The Buyer Agency Agreement was written with the buyer’s best interest in mind.

Again, if you have questions or concerns about the agreement, please Contact Us.

HOME INSPECTIONS

Buying a home may well be the largest financial investment you will ever make. Naturally you will want to know as much as possible about the property before you finalize the purchase at closing. It’s important to hire a knowledgeable, independent home inspector for advise on the overall condition of the property. The purchase contract usually requires specific time periods for each inspection, and it’s critical that these time frames be met. Usually the cost for any and all inspections and re-inspections are paid by the buyer. Prices can range from $350 to $500 for whole-house inspections.

Some examples of common inspections are:

  • Structural. Defects caused by poor construction, soil movement, water or drainage conditions, settlement, fire, etc.
  • Environmental Hazards. Including asbestos, lead-based paint, radon gas or any other toxic material.
  • Roof. Can include framing members, decking and shingle condition.
  • EMP. Electrical, Mechanical and Plumbing – Should include electrical and plumbing systems, built-in appliances, heating and cooling systems, swimming pool/spas, sprinkler systems and security systems.
  • Termite. Report would show any visible infestation or visible damage caused by and wood destroying organism (termites, water damage, wood rot).

Many companies specialize in only one area of inspection, and others will group several together and offer a package price. Whichever route you go, assure yourself you’re getting the inspections you need. Many can be found in the yellow pages or your Real Estate Professional can provide a list of several of each to choose from.

If you have any questions or would like more information about a buyer agency agreement please Contact Us.

HOMEOWNERS INSURANCE

If you have any questions or would like more information about getting homeowners insurance please Contact Us.

When buying a home, one word you will hear often is “insurance.” As a homeowner you are concerned about protecting your house, your personal belongings and your personal liability. It is important that the coverage you choose provide the comprehensive protection that you need. Homeowner’s insurance protects you and your house against losses from fire, theft, liability, vandalism, water damage, wind damage, tornadoes and loss of use. Earthquake and flood insurance are not included but can be purchased separately.

TYPES

There are three types of homeowner’s policies to choose from. A clear understanding of the coverage each type offers will help you select the right policy for your needs. Each type carries a deductible amount you select.

  • A standard policy requires coverage for at least 80% of the value of your home, excluding land and the foundation. It will usually insure your personal property at actual cash value.
  • A broad-from policy is more inclusive than the standard policy and covers additional named perils such as glass breakage, smoke damage, etc.
  • An all-risk policy covers even more than do the standard and broad-form policies. An example of a covered risk might be damage caused to your roof from ice build-up in the gutters.

Some of these policies offer optional guaranteed replacement cost coverage on your home and its contents. Replacement cost coverage will pay to rebuild your home and replace its contents with no depreciation coming into play. It is important to understand that the replacement value of your home is based on your insurance company’s estimate of the cost to rebuild your home on your property. It is not based on the purchase or appraised value of the home. Most policies have a built-in annual increase of replacement cost coverage.

REDUCING PREMIUMS

When purchasing homeowner’s insurance, there are ways of lowering your premium. Most insurance companies offer discounts for smoke alarms, fire extinguishers, dead bolt locks, and whole-house alarm systems. If your home is fairly new, or if you elect to insure your automobiles with the same company, you are likely to receive a discount on your premium. Another way of lowering your premium is to select as high a deductible as you can afford. Raising your deductible reduces your premium. Insurance is the type of service you buy hoping that you will never have to use it. Discuss with your REALTOR® your unique needs and concerns when you purchase the insurance and whenever your needs change. The right insurance can give you a sense of security in knowing that you are adequately protected.

TITLE INSURANCE

If you have any questions or would like more information about title insurance please Contact Us.

Generally, there are two forms of title insurance. Lender’s title insurance, required by most lending institutions, is normally written in the amount of the mortgage and protects the lending institution from losses resulting from title defects.

Because lender’s insurance expires when the mortgage is repaid, you may benefit from the second form of title insurance known as an owner’s title policy. It usually is written for the amount of the purchase price of the home. This protection starts the day of the closing and lasts as long as you or your heirs retain an interest in the property.

Unlike other insurance premiums, your title insurance premium is paid only once, at the closing. By purchasing owner’s and lender’s protection simultaneously, substantial savings in title insurance premiums can be realized. After all fees have been paid and documents signed and notarized at the closing, you will receive a copy of each and, most importantly, title to your house.