To find and purchase your next dream home, there are many steps taken with your Buyer REALTOR® to complete your journey. The journey length varies with the Buyer – for some Buyers it can take only a few days, while for other Buyers their successful purchase can come only after several years of hard work. What can surprise many Buyers is the importance of their buying requirements to the buying process. Below are four key steps all Buyers should use as they work with their Buyer REALTOR®:
Step #1: Identify your Buying Requirements
It sounds simple, but unfortunately many Buyers make a key mistake of starting their buying process with jumping to view properties they see advertised before actually sitting down to identify their requirements. Below is a list of some basic requirements every Buyer should identify before viewing any properties:
(a). Price – how much do you want to spend (or pre-qualification limit) on your next dream home?
(b). Size – what size of a home (i.e. total living area) and lot size do you want?
(c). What are the minimum number of bedrooms and washrooms that you need?
(d). What type of garage space and / or parking arrangement do you want?
(e). What style of property would you consider (bungalow / split-level / 2-storey / etc.)?
(f). Would you consider a house / apartment condo / townhouse condo / duplex / acreage / etc.?
(g). What type of basement (or lack thereof) would you consider?
(h). What age of property would you consider (e.g. built 2000 and newer)?
(i). What are your location boundaries identified on a map as a polygon using Streets and Avenues (i.e. how far North, South, West, and East would you consider)?
(j). Consideration or omission of properties which pose high levels of Buyer risk (e.g. for sale by owners, court-ordered foreclosures, stigmatized properties, etc.)
(k). What special or advanced requirements should be added (e.g. lake access; handicap accessibility; age restriction; floor level in the case of condo; other location restrictions; zoning restrictions; ability to install basement suite; ability to place addition or new construction onto the property; etc.)
In my opinion, not identifying buying requirements at the start is a huge mistake since it is very easy to fall in love with a particular property without realizing there actually may be a property available that overall would be a much better purchase financially and / or in meeting your family’s needs.
Step #2: Communicate your Buying Requirements
After selecting the best Buyer REALTOR® available, you need to clearly communicate your buying requirements to your REALTOR®. My suggestion: send a well-organized email since it is possible for important items to be overlooked in the course of a phone conversation or face to face meeting. Speaking from experience, I am best able to assist those Buyer clients of mine who identify their requirements to a high level of detail and inform me of everything they are looking for and also everything they have 100% ruled out. It is tempting for Buyers to “hide” criteria from their REALTOR® (e.g. maximum price range) but this should be avoided whenever possible since each imposed constraint may affect the optimal end result. After all, your REALTOR® is working on your behalf to find you the right property, and the more you are able to communicate to him / her, the better chance that your end result will be successful. Other communications include: how frequently you would like to be updated of listings (e.g. daily; weekly; etc.); schedule availibility for viewings; and on-going feedback / decisions / further questions for each property viewed.
Step #3: Evaluate your Buying Requirements
After communicating your buying requirements your REALTOR® will start filling up your inbox with listings that most closely match your buying criteria. There will be one of three possible scenarios occur:
(a). You will be receiving less listings than expected (e.g. under ten active listings at any given time).
(b). You will be receiving an appropriate level of listings (e.g. a total of 10-20 actives at any given time).
(c). You will be receiving more listings than expected (e.g. over twenty active listings at any given time).
In case (a), the reason you are receiving less listings than expected is because your buying requirements are too strict – by relaxing your buying requirements, more listings will match your criteria. In this scenario, Buyers need to evaluate how to relax their buying requirements. Below are some suggestions:
(1). Consider expanding the geographical boundaries of your search
(2). Consider expanding the size, number of bedrooms and washrooms, etc. of your search
(3). Consider getting a second opinion of financing prequalification to move into a higher price range
(4). Consider alternate types of properties (e.g. duplex / condo), and expand garage, basement, etc.
(5). Consider expanding the age built criteria (e.g. including older homes with some renovations)
In case (b), if you are happy with your requirements and are receiving an appropriate number of listings the next step is to call your REALTOR® and start viewing these properties, working towards the desired end result of making an informed buying decision – the best possible choice out of the decent options available.
In case (c), the reason you are receiving more listings than expected is because your buying requirements are too relaxed (the opposite of case (a)) – by tightening your buying requirements, fewer listings will match the more focused criteria allowing you to zero in on your best choice much easier and faster. In this scenario, Buyers need to evaluate how to tighten their buying requirements. Below are some suggestions:
(1). Consider tightening the geographical boundaries of your search
(2). Consider instituting a minimum size, number of bedrooms, washrooms, etc.
(3). Consider instituting a minimum price to rule out the weaker properties that are not of interest to you
(4). Consider focusing on one type of property (i.e. house or duplex or condo or acreage)
(5). Consider tightening the age built criteria (e.g. from ‘2000 built and newer’ to ‘2005 built and newer’)
My suggestion: every two months or so Buyers should re-evaluate the number of listings received from their REALTOR® and decide if they fall into case (a); case (b); or case (c) above. By continuing to evaluate your buying requirements on an on-going basis it will make sure you are continually receiving an appropriate volume of listings.
Step #4: Modify your Buying Requirements
Once you have evaluated your buying requirements and have decided which ones to tighten and / or which ones to relax, the next step is to officially modify them by calling and / or sending an email to your REALTOR® notifying of your decisions and request an updated current group of listings that most closely match your modified criteria. Once you start receiving revised listings you will need to gauge the volume (repeating steps #3 and #4 as often as necessary) until you have finalized a purchase.
In summary, from my experience as a Buyer REALTOR® in successfully helping a large number Buyers of all different ages; ethnic backgrounds; investment experience; education levels; etc. secure their ideal property, I would encourage all Buyers to place a very high importance on their buying requirements and consider implementing the four steps illustrated above to help achieve their greatest home-buying success.
[Article written and ©2012 by Kelly Grant, M.Eng., ABR, NCSO, P.Eng. - REALTOR® at Maxwell Devonshire Realty in Edmonton, AB]
Disclaimer: for those readers not currently represented by another licensed REALTOR®, to obtain more information on this topic and / or if you are serious about selling or buying in the Greater Edmonton Area, call Kelly at 780-414-6100 (pager) or send Kelly an email to SOLD@KellyGrant.ca to schedule a confidential appointment.