Home Buying and Selling: Your Questions Answered! (Part 2)
Can I Buy and Sell at the Same Time?
Unfortunately, there is no clear-cut answer to this question as it all depends on your unique situation. If you can afford to carry two mortgages, buying your new home before selling your current one may give you peace of mind as you won’t have to worry about timing.
However, most people rely on the funds from their current home sale as a means for a down payment on a new property. Other options include home equity lines of credit (HELOCs), bridge loans, porting your mortgage or making a contingent-to-sale offer.
Be sure to discuss your options with your mortgage specialist or REALTOR®®.
What Do I Need to Know About Making an Offer?
Your Edmonton REALTOR®® will assist you in coming up with a great offer that favours both your interests and appeals to the seller. From here, the seller may accept, reject or counteroffer. If your offer is rejected or the seller presents a counteroffer, don’t worry! Your agent can help you come up with a more enticing offer (but they will let you know if they don’t think it’s in your best interests).
How Much Should My Down Payment Be?
Homes priced under $500,000 require a minimum down payment of 5%. Homes above the $500,000 mark will require the minimum 5% on the first $500,000 and an additional 10% on the remaining amount. Keep in mind, in either situation, down payments of less than 20% will require you to purchase mortgage insurance, but as your down payment increases, your mortgage insurance costs decrease.
We recommend using a down payment calculator to help you determine exactly how much you’ll need.
What is the Mortgage Stress Test?
The mortgage stress test was established as a means of protecting homeowners from rising interest rates. For this reason, all mortgage applicants must prove they can qualify for the Bank of Canada’s benchmark rate or their contracted mortgage rate (whichever is higher) plus an additional 2%.
Use this mortgage qualifier tool to see if you qualify for a mortgage loan based on your current finances.
How Much Should I Sell My Home For?
Pricing your home can be tricky. Set your asking price too high and it may take longer to sell. Set it too low and you’ll be “selling yourself short”. The key to coming up with a great listing price is to work with a qualified Edmonton REALTOR®® who understands the market and sees the true value potential of your home. For more information on how your home’s value is determined, see our previous post “Selling: How Is Your Home’s Value Determined?”.
Should I Buy a Home That Needs Renovations?
While you may not want to pass on your dream home simply because it needs a little paint, you’ll likely want to reconsider if you’re looking at an infinite number or upgrades. If you’re truly set on a particular home but are unsure of what to expect for repair costs, we recommend consulting with both a qualified home inspector and your Edmonton REALTOR®®. From here, you can negotiate with the seller in terms of asking price or having the renovations completed before you move in.
How Long Will It Take to Sell My Home?
The time it takes to sell a home in Edmonton depends on several factors – these include whether it’s a buyer’s market or seller’s market, time of year and whether your home is well-priced (see "How Much Should I Sell My Home For?”, above). Other considerations include the state of your current home and how it is being marketed. Keep in mind, a good Edmonton REALTOR®® will help you with all of the above.
Didn’t find the answer you were looking for? Check out Home Buying and Selling: Your Questions Answered! (Part 1). Or, get in touch with us! We’re always here to help.