The Art of Negotiating

Posted by HJTeam on May 9, 2013 in Blog | 0 comments

Right off the bat, we should let you know that very rarely is the first offer ever accepted on a property. The Harris-Johnson Team agents’ goal is to improve that probability, we are also skilled in the art of negotiation—something gained only from 28+ years of experience.

Upon receiving an offer, a seller is faced with only three options:
1. Accept
2. Counter
3. On, in extreme cases—reject

If the seller chooses to offer a counter offer, we have entered the realm of negotiation. A counter-offer generally means that some, not all, of the conditions that were proposed in your offer have been accepted. This may include the price, closing date, or add/remove conditions. Once you have received a counter-offer, you now have two choices
1. Accept
2. Or Counter

Now we attempt to find a mutually agreeable set of terms somewhere in between the two offers. Here is how the Harris-Johnson Team will aim to help:
• Pick your battles: You have to determine immediately what will be your minimum acceptable terms—and in doing so, help your orient your focus on the terms that matter to you most
• Be grounded: an offer will only be accepted if it’s grounded in reality of the buyers and sellers. There is no such thing as a free lunch, especially in today’s economy.
• Combative = Bad: Collaboration, patience and some apathy will go a long way in any negotiation process. Both parties are attempting to find a common ground, so let it happen!
• Know when to fold your hand: At some point, if you deem it unlikely that either party will be able to find mutually acceptable terms—you will have to accept the possibility of moving on. Being prepared to walk away is often the hardest part of the process, but in the long run—the most financially important. The Harris-Johnson Team always will be willing to come back to the bargaining table at a later date

Making an Offer

Posted by HJTeam on May 2, 2013 in Blog | 0 comments

Finally, the house hunt is over! You have scoured the listings, pounded the pavement, and made numerous calls to your Harris-Johnson Team agent. Now with your neighborhood selected, your pre-qualified mortgage in your pocket, and your dream home in sights—it is time that you make an offer.

The Harris-Johnson Team will be along for every bump in the ride. Making your offer is a delicate, and often stressful point in the real estate transaction. However, armed with knowledge and the experience of the Harris-Johnson Team, this will be as easy and pain-free as humanly possible.

Elements of an Offer to Purchase:

Putting it in writing for the seller: Buying real estate is often a lot more complicated than any other kind of transaction you will make in your life. Your Harris-Johnson Team agent will work in direct consultation with you to prepare your “Offer to Purchase”, an important legal document that proposes commitment to buy the sellers dwelling (or land). In property law, if it is not written down—it doesn’t exist.

Types of home purchase offers: You and your Harris-Johnson Team agent could draft an offer that is firm, or with conditions. A Firm Offer to purchase the home means that you are committed and it signals direct interest to the seller— if it is accepted, the house is yours. A Conditional offer means that you and your Harris-Johnson Team agent have placed conditions on the purchase of the property. Often these conditions are commonly related to home inspections, financing approval, or subject to sale of the current buyer’s existing property.

Factors that are included in the offer:
• Price
o This is the most important, and often the most difficult judgment to make. Too small an offer will place you out of the market, and too large an offer will leave money on the table. Our Harris-Johnson Team agents are here to help decipher the local housing market trends that could impact the price that will be included in the offer. By helping you assess these conditions, including the competition experienced from other buyers—our agents will help position your offer for the highest probability of success.
• Deposit
o A deposit shows good faith on behalf of your commitment to the property; generally sellers accept an average of around 5%. However this amount is subject to conditions—and will be applied against the purchase of the house on closing day.
• Terms
o The terms of the offer generally relate to the implications surrounding financing. As a buyer, you have the option of arranging your own financing through our preferred brokers and lenders (Or, depending on other conditions the Harris-Johnson Team my advise you to assume the seller’s mortgage, especially when they have locked in an attractive interest rate compared the current market).
• Conditions
o See conditions explained in previous section.
• Inclusions & Exclusions
o You may make your offer contingent on the inclusion or exclusion of items in the sale. Often these are appliances or decorative items.
o In another blog post, we will go into more depth regarding the differentiation between “chattel” and “fixtures”—which should help to explain what may or may not be included in an offer for purchase.
• Closing Day
o The closing day is the day the title of property is legally transferred and funds finalized. British Columbia’s possession date is legally 1-4 days after the deal closes.

How to Select a Neighborhood

Posted by HJTeam on Apr 13, 2013 in Blog | 0 comments

Selecting a neighborhood is often the most exciting part about searching for a new home to live in! The Harris-Johnson Team’s 28+ years of experience is constantly leveraged by our clients during this stage, as we all grew up here—and have been working in the area since! When evaluating a neighborhood, there are a number of factors that one should consider—each of these factors is usually weighed quite differently, depending on the situation of the client.

• The quality of schools in the area (elementary, post-secondary etc)
• Property values
• Potential re-sale values
• Traffic
• Crime rates
• Proximity to future construction
• Proximity to employment, hospitals, shops, public transportation, parks etc

Most often, these tangible characteristics will be weighed against intangible criteria like ‘community vibe’. We recommend getting to know the neighborhoods your are interested in by spending time there; eating, drinking, relaxing. Also, utilize our online resources and other media sources for valuable community information—so that you are able to make an informed decision. During this learning stage, leverage the Harris-Johnson Team’s local expertise!

For first time buyers, financial resources are often limited. Due to this, it is wise to select a home in a neighborhood the meets your primary needs—and is within your price range. The best ways to maximize your home purchase location is by employing a couple of following strategies.

• Look for the “up and coming” neighborhoods that have potential for either rising property values in the coming years, or look like they are developing into the kind of neighborhood you would want to live in. Sometimes, it is valuable to endure short-term pain for long-term gain.
• Always consider the neighborhood demand! This something that The Harris-Johnson Team is very experienced at. As a client, you should be very interested in the competition that surrounds offers made in a specific area.
• By modifying your expectations, you may be able to move into a neighborhood that previously seemed unaffordable. However, this is a tradeoff only you can make!

Check out our Neighborhood Comparison Chart Below:

Identifying your Dream Home

Posted by HJTeam on Apr 11, 2013 in Blog | 0 comments

Once the process of pre-qualification has been expedited by our preferred Mortgage Broker partners, we are finally able to move on to the exciting part—finding a home! While this can be the most exciting part, it also often gives our client the most anxiety. There are some big decisions that will come up during this stage, and rightly so. In the words of Ray Harris, “you don’t know what you don’t know”. Our job is to try and limit that!

Buyer Representation:

We represent a plethora of buyers, and realtors are able to add value to almost any real estate transaction; whether it is on buying a new home, or one from for sale by owner.

• New Home Sales:
o You may be interested in purchasing a new home. The sales people in the show homes work for one specific builder and their interests lie in selling only that builders product. You should be wary of these situations, as anyone can sell homes for a builder—and they require no educational criteria. These sales people are not licensed real estate professionals, and therefore may not have the strict ethical guidelines that we as professionals are required to follow. The Harris-Johnson Team works with your best interests in mind and will assist you in finding the home regardless of who built it.
• For Sale by Owner:
o We regularly assist our clients with the purchase of a ‘for sale by owner’ property. We are still here to protect your interests in this type of purchase and best of all; it is still a free service to you. If you see a ‘For Sale By Owner’ (FSBO) house that you are interested in, please just give us a call and we will arrange to show you the property and help ensure that you get the best deal possible. By approaching the deal alone, you limit your negotiation power—and hence the price that you are going to pay.
o We generally assume the helpful term, “buyer beware”, in any situation where they are entering a commitment to buy without professional advice.

The Buyers Wish List:

In order to assist our realtors in searching for the best house or your financial situation and your needs, we ask all our clients to build a ‘buyers wish list’. While we may never be able to find a property that has all of your criteria in it, that is our goal! We strive to fulfill our buyer’s wish list, by integrating their requests into our in-house software that helps us detect matches. Generally, a property that has 8/10 of the characteristics on your wish list requires some serious consideration! If you are new to the area, or want some more information on the boroughs surrounding Vancouver, use our neighborhoods page as a reference.

1. What City would you like to live in?
2. Is there a specific neighborhood?
3. What is the maximum that you want to spend?
4. Do you want a detached townhouse our house? Attached Condo, Townhouse, or House?
5. How many bedrooms do you want?
6. How many bathrooms do you want? Or, how many females are in your family?
7. Do you want a suite?
8. How many square feet do you want?
9. How big a lot do you want?
10. How many levels do you want?
11. How old of a home do you want?
12. Do you want a garage or carport?
13. Do you want to be close to transportation?
14. Do you want to be close to schools?
15. Do you have pets?
16. Are there any auxiliary features that you would like?

When answering these questions, you need to address the difference between wants and needs—which have the potential to be substantially different. Our goal during this initial stage is to help align our client’s interests by attempting to equate their expectations, and what they really need.

The Harris-Johnson Team is here to empower your decisions, and educate you through the entire process of purchasing your new home. Check back on our next blog post on how to select a neighborhood.