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This and other articles about the Yellowknife real estate market are available in our e-newsletter. Click on this link to sign up and receive our latest edition.
We’re almost through the first month of 2021 and there are still very few homes listed for sale across Yellowknife, which is probably a bit disheartening for eager buyers. But although it may not seem like it, spring is fast approaching and this year in particular we believe it is going to bring a lot of listings (to learn more about our market predictions, go here.) While we wait for that to happen, here are our top five tips for a successful Yellowknife home purchase in 2021:
#1 – There is No Substitute for Viewing Homes in Person
For the vast majority of buyers we work with, the home-buying process requires the act of getting out there and viewing homes in person – sometimes just a few homes, but usually a lot more. There are several reasons for this. First, even in a world where homes can now be well-researched online, things change when you actually set foot in a home. Homes have intangible characteristics that can’t be conveyed through photography and listing descriptions. Secondly, once you start viewing homes, you naturally start refining your list of “wants and needs.” Some of the things you thought were super important become less so, and other things increase in importance. This is an essential part of the buying process. Lastly, when you start viewing homes, you begin mentally preparing yourself for the sometimes daunting process of submitting an offer. Buying a home is a big commitment, and it takes time – and the help of a good REALTOR® – to build the confidence required to proceed with an offer. Start the process early and you’ll be ready when the right home comes along.
#2 – Get Pre-Approved for a Mortgage
Buyers often underestimate the importance of getting pre-approved for a mortgage. They assume that once they find the right home they will submit an offer that is subject to financing and then they’ll have a period of time to get their mortgage approval. While this is an adequate approach in many situations, there are other situations where it makes sense to prepare further in advance. In a hot market, great properties that are well priced often attract multiple offers. When comparing offers side by side, sellers place a higher value on offers submitted by potential buyers who have already been pre-approved – because it helps to avoid situations where they accept an offer, effectively taking their home off the market for a couple of weeks, only to have it fall through on financing. It is not uncommon for this to happen, and it costs the sellers the momentum that they had when they accepted the offer. Mortgage pre-approval turns the financing clause into more or less a formality. To simplify the process, we now offer mortgage pre-approval through our in-house Centum mortgage broker, Jean Mahlangu. Click here for more details.
#3 – Get a Realtor Involved Early
We sometimes receive feedback that potential buyers hold off on contacting a Realtor because they don’t want to inconvenience them in the early stages of their home search. But it is in the earliest stages where a Realtor, acting as your agent, can add the most value. And like any professional, a Realtor cherishes the opportunity to add value.
In some other cases, buyers hold off because they are worried a Realtor might pressure them into buying before they are ready. But a good Realtor is focussed on looking out for your best interests, even if that means talking you out of purchasing a home. If that’s not the vibe you are getting, you should not hesitate to make a switch. We have a team full of great people whose top priority is to establish a lifetime business relationship with you, and to look out for your best interests and the interests of your family for generations to come.
#4 – DO NOT Buy a Home through the Listing Agent.
There is one aspect to working with a Realtor that can be problematic if buyers and sellers are not fully informed about it. A Realtor can be your Buyer Agent one second, but when they take you for a tour of one of their own listings, they stop being your Buyer Agent and start being the agent for the seller – the Listing Agent. They have a contract with the seller that specifically states that they have to look out for the seller’s interests exclusively – there is nothing that they can do to change this.
The second layer to the problem is the fact that the Listing Agent, who until recently was your Buyer Agent, can legally still assist you with the submission of an offer. And, if they persuade you to allow them to assist you with submitting an offer, they earn twice as much commission when the deal closes. And to top it off, the only person whose job it is to fully inform you about this issue is the Realtor themselves. It is problematic, and unfortunately it sometimes results in buyers being taken advantage of.
If a buyer is fully informed about this issue at the very earliest stages of working with a Realtor, and is made aware that they have the option of working with someone else to submit the offer, then it’s not the end of the world. But unfortunately that disclosure doesn’t always happen. That’s why we, at Century 21 Prospect Realty, have a company policy that Listing Agents refer buyers to other Realtors except in very rare circumstances (such as in Fort Smith, a town with only one Realtor). And it’s also why we are such a broken record on this issue.
Buying a home is the most important financial transaction of most people’s lives. Except in the rarest of circumstances, buyers benefit greatly from having their own representation, and it costs them nothing.
Do not buy a home through the listing agent. It’s a bad idea.
Buyers or Sellers who feel that they were not informed about this issue when working with a Realtor can submit a professional standards complaint to the Northwest Territories Association of Realtors by e-mailing pmoore@offcomp.ca.
#5 – DO NOT Use the Same Lawyer as the Seller
In recent years we’ve found ourselves having to give this advice to more and more buyers and sellers. Unlike the example above, our concern is not that lawyers are misleading clients about their representation options. Rather, we are concerned that people are choosing to use the same lawyer as the seller because it seems easier, or maybe is slightly cheaper. And that’s true – if only one lawyer is involved, paperwork travels faster and it is often cheaper. In some cases everything goes smoothly and neither party has reason to regret their shared-lawyer arrangement. But just like in a divorce, when things go badly, they can go really badly, and you had better have someone on your side who is not confused about whose side they are on. You see, in order to work with both a buyer and seller, the lawyer has to reduce their obligations to you. They can no longer negotiate solely in your best interests. So let’s say you get to possession day and the seller has neglected to do a bunch of work they had committed to doing – how is your lawyer supposed to fight to make sure you get what you were promised if they have an equal obligation to the seller? They find themselves in a conflict of interests. In the worst of these situations, we’ve seen lawyers simply thrown their hands up and declare that they cannot advise either side – “sort it our yourselves or lose the deal.” The buyer and seller are left to negotiate terms more or less on their own, and to meet somewhere in the middle. But that’s not what you want – or it’s not what you should want. You should want what was promised to you in the Agreement of Purchase and Sale, and that’s why you need your own lawyer who can go to bat for you exclusively. So if your lawyer comes to you and asks if it’s okay for them to also represent the other party to the transaction, say no, even if it means you have to go find another lawyer.
Thanks very much for reading this post. It’s very important to us here at Century 21 Prospect Realty to educate northerners about the home buying process. We wish you all the best in your home search, and please do not hesitate to reach out to our Broker of Record or any other member of our team if you would like to know more about buying a home in the Northwest Territories.
