BUYING PRIVATELY


CAN YOU DO IT?

Of course you can. And you can also pull out your own tooth. If you know what you're doing, it can turn out ok. If you don't, it can turn out very badly. You may still have to hire a professional to fix the problems you might have made, and you may still spend thousands in repairs or legal bills sorting through issues that, if properly dealt with, may not have cost you a penny.


MYTHS & CAUTIONS

There are many myths about buying property privately. Let's take a look at the biggest ones:


I'll Save Money - Some think that if they go into a purchase unrepresented that they will save on the commission a buyer's agent would have claimed, had there been one. The truth is that any unclaimed commission goes to the seller, so you won't save anything. Usually, buyers not working with an agent will have a lawyer write the offer. But what if you cannot reach an agreement with the seller? Every time your lawyer writes a new offer, you will be billed for the hours it takes him/her to do it. Everything The Freis Guys do for you up till when you close a deal is included in the commission we are paid either through a completed deal or fee agreement. You do not pay each time we do something. 


You can also find yourself in hot water if you hand a deposit cheque to the seller that has not been duly accounted for in an offer. We ensure that if the sale is cancelled that your deposit has been marked for return, without any deductions, when we hand over the deposit release. Many people buying a home without representation don't know this and lose their deposit because the wording on their offer didn't appropriately address the return of the money if the deal doesn't complete.


My Lawyer Can Protect Me By Writing A Legally Binding Offer - Legally binding, yes. Protected, no. Your lawyer will certainly make sure that you have a financing clause and/or home inspection clause, if you want them (amongst many other clauses). But they are not going to be in the home checking important details about wiring, plumbing and foundation issues. They can't tell you if the roof needs to be replaced or the reasons why we think it's already leaking. They can't tell you why we suspect that there has been water in the basement in the recent past, or how many years might be left in that furnace.  We can show you the patent defects and ask the right questions to find out about latent ones. 


I Can Always Get Out Of It At Bank Level - If you are new to the home purchasing game, you might think that the bank will always have the final say so that gives you a level of protection against a bad deal. Not always. If your lawyer didn't write in a financing clause, it doesn't matter what bank says. You are on the hook. If your bank does not approve you for the loan, or does not approve the particular home that you have put an offer on, that is NOT the leverage you need to cancel a deal. We will show you comparable properties in the area and help you choose an offer price that makes sense, and make sure you have it written in your offer that you have a legal "out" should you need it.


I'll Get Answers to Questions Easily - Not likely. Calling the homeowner is risky. They shouldn't lie to you, or tell you half-truths, but they are not obligated to tell you the truth by way of legislation the way we are. And the truth is, we will help you buy any property. The private seller wants you to buy their property. And asking your lawyer about anything other than aspects of law won't help either. They don't go to the home, and would not be able to give valuable information to help you in your decision. When you work with us, we will find the answers to your questions, no matter what property it is on. 


The Rules Are The Same - No. Not even close. By law, if an agent has multiple offers on a property they have listed, they MUST tell all other agents who have written an offer about how many offers are being presented to the seller. This can help you to make an educated decision about what conditions you want, how much you want to offer, and what you want to include in the purchase. In contrast, the private seller is not bound to be honest. They can tell you there are other offers, but they are not required to prove it. They can make any claim about the other offers they want. For instance, they can say you'll need to up your offer by $20,000 to beat the other offer. Is there another offer? Is it really $20,000 higher? Maybe you are already the highest offer. Maybe you are the ONLY offer. You'll never know for sure. 


Condos and Houses Are The Same - Absolutely not! In the last few years, legislation has come about that requires a condo seller to provide the buyer with a significant set of documents to review prior to a condo sale being finalized. The documents include details about what is included in your strata fees, special levees that are coming up that could be a major addition to your monthly fees, going into the hundreds of dollars each month. You will not have the option of not paying these if you disagree with them, and they may make your total home expenses out of reach. If the condo is a conversion unit, your financial insititution may not approve the mortgage on the property, as the reserve funds are often inadequate to cover major repairs. You also need to study the rules and regulations. If you love your BBQ steak during the summer and you are not allowed to have your BBQ on your balcony, do you still want to live there? Perhaps there is a pet restriction and you love Fluffy too much to part...now what? If you are not aware that these things need to be investigated, you may find yourself severely disappointed on possession day.



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