I get questions from homebuyers all the time. Some of them are investors. Others are first-time homebuyers. Some are moving into Waterloo Region and have questions about schools, neighbourhoods and crime.
My website blog posts focus mostly on buying real estate. Home buyers are great to work with, a blank slate that offer more control over the process. With selling you have to mostly sit and wait for the buyer to come. Selling is passive. (Don’t believe what other Realtors tell you in their listing presentations. They don’t have buyers waiting for your house. Their marketing will not attract ready buyers. They are not in control).
Buying is active. You look. You find. You eliminate. You offer. Maybe you win. Maybe you keep on looking.
Questions about buying real estate
Who pays the buyer’s agent?
Just like with home sellers, homebuyers to a large degree don’t understand who pays who in real estate transactions. It is a weird system, real estate commissions. Where else can you get professional service and professional advice for free?
Chat Widget: Im trying to figure out how real estate agents make money if we are buying a house. We had an agent offer her services to find us a house but never discussed her fee. Is there one? How does this work?
Keith Marshall: The listing brokerage pays the buyer’s agent’s fee. For the buyer there is no charge.
I found it. Can I get the commission?
It used to be that Realtors were the gatekeepers to listing. We waited in the office for the real estate board driver to deliver the “hot sheet”, new listings from yesterday and we carried around a big catalogue of homes for sale. Back then, we were all living in split-level homes and driving V-8 Pontiacs too!
CW: I am wondering about negotiating with the real estate agent that came with me to a pre-sale development I found.
KM: Do you have a Buyer’s Agency Agreement signed?
CW: No. It was the first time looking with him. Just brought him along to places we actually found.
KM: OK let me address the “found” part. Realtors are no longer gatekeepers to the MLS. That changed with the widespread adoption of the internet. Your Realtor’s value in your case could be helping you dealing with the developer, getting free upgrades or price reductions and what about pre-close assignment of your unit? You might need him. If you think you don’t, then cut him loose and go it alone.
What about rent-to-own?
There are lots of scams going and having met a few rent-to-own investors, I’m not impressed. If a buyer does not have enough money for a downpayment my advice is to set up a savings plan with a reputable lender (a bank) instead of a private investor.
CW: My husband and I are self employed. Can you tell me how your rent to own program works?
KM: I’m sorry I can’t help you with that. I don’t rent to own. I actually think it is not a good way to buy a home.
CW: I’m sorry I was reading your blog and I had the impression you did. And why do you say that?
KM: I was curious about it. I looked into it and decided that it is not an ethical thing to do. The owner has all the power. I’ve met investors that get into the rent to own business and they are not my kind of people.
Where is the school?
The local school is almost always the most important factor to consider when looking at residential real estate. Schools affect neighbourhoods and neighbourhoods affect property values (just look at Laurelwood).
CW: What is the Catholic Elementary School in the UpTown Waterloo area?
KM: Lourdes. Our Lady of Lourdes is a top ranked school.
Is now a good time to invest?
The best time to invest in real estate was ten years ago. The next best time is now. In 2010 through 2012, I heard a lot of people saying they were were waiting for the prices to come down. Their first mistake was reading the newspaper. Their second mistake was procrastinating. In Waterloo Region, prices continued to rise and potential real estate investors lost more ground.
CW: I’m looking to start a portfolio of condo units in the K-W area.
KM: How can I help?
CW: I would prefer to buy pre-construction as early as relationship with developer allows.
CW: Have you looked into 155 Caroline?
KM: I like it.
CW: Can I park some money for a few years until I take occupancy and then sell? Is this still a viable option with an attractive ROI?
KM: It is not as good as it was but I think you’ll still make money.
CW: That’s too bad to hear. Why in your opinion its not as good as before? Before = meaning when?
KM: It is still better than the stock market. Ten years ago the local market was growing at 5-6% per year. Now it is closer to 2%.
CW: I understand and agree about the stock market. 2% that’s lousy. According to my research, Toronto area condo maker appreciates around 3-4% annually in the past 2 years.
KM: I don’t know about that. Real estate is local. I only follow KW closely. Of c0urse, you’ll need a lot more money if you’re going to invest in Toronto.
Which areas in Kitchener Waterloo have the greatest investment potential?
I love investors. With them it is all numbers. It is all about return on investment. Investors want the most bang for their buck. There is nothing wishy-washy about that.
CW: What do you think of the new Momentum Development projects?
KM: I like them. Those guys do good projects.
CW: What floor plans do you think will rent better, a single bedroom or two? It appears that only 2 bedroom layouts are available at 1 Victoria.
KM: Personally, I think one bedroom is a better investment. East to rent. Easy to sell.
CW: Is it slightly late to invest in the Kitchener real estate market?
KM: No. Our future looks bright.
CW: Which areas in Kitchener would you suggest have the greatest investment potential?
KM: Near the future LRT line and near Conestoga College campus.
CW: Conestoga college area should have great rental income potential correct?
KM: That’s right.
CW: What area would you suggest to a first time home buyer who is looking to have a rental income as well? Ideally a separate basement unit.
KM: Uptown’s North Ward would be my first choice.
CW: Near Laurier?
KM: Yeah kind of. I wrote a blog post about the area. Here’s the link.
Where will have good resale?
I like this question. Many people don’t think about reselling their house when they are buying it, but they should. Always have an exit strategy.
CW: I am interested in buying a property for my son to study. He is planning to live there for the next five years. What are the locations where I will have a better resale value for a property of about $350,000?
KM: Beechwood, Westmount, Uptown, North Ward.
Can I get one mortgage for two houses?
I get questions that I cannot answer too, like this one.
CW: Can you have a mortgage for two houses?
KM: You mean like a duplex?
CW: No, two separate houses with different addresses. Two separate mortgages adding up to the same as a single mortgage.
KM: I don’t think so, but I’m not a mortgage expert. You should talk to your lender.