Buying A Home
Thank you Mary Anne Gehl, Sales
Representative What a buyer needs to do before making an offer? Roughly speaking, Hymer says you can afford to buy a home equal in price to three times your gross annual income. More precisely, the price you can afford to pay for a home will depend on six factors:
Lenders also analyze your income in relation to your projected cost of home ownership and outstanding debts to determine the size loan you can afford. Hymer says your housing expense-to-income ratio is determined by calculating your projected monthly housing expense, which consists of the principal and interest payment on your new home loan, property taxes and hazard insurance. The sum of these costs is referred to as "PITI." Monthly homeowners' association dues, if you're purchasing a condominium or townhouse, and private mortgage insurance are added to the PITI. Your housing expense-to-income ratio should fall in the 28 to 33 percent range, although some lenders will go higher under certain circumstances. Your total debt-to-income ratio should be in the 34 to 38 percent range. Explain the difference between market value and appraised value. An appraisal is "an estimate of a property's monetary value on the open market; an estimate of a property's type and condition, its utility for a given purpose or its highest and best use," according to Charles O. Stapleton, III, Thomas Moran and Martha R. Williams. Comparative market analysis is an informal estimate of market value performed by a real estate agent or broker. It is based on like sales and generally offers a range of values including probable market value. How can someone find out how much a house is worth?
An appraisal is an expert's "estimate of a property's monetary value on the open market; an estimate of a property's type and condition, its utility for a given purpose or its highest and best use," according to Charles O. Stapleton, III, Thomas Moran and Martha R. Williams. The results can be presented to the client in various ways ranging from a brief summary on a pre-printed form, to a more thorough narrative appraisal report showing all factual materials, techniques and appraisal methods used in setting forth the appraisers conclusion of value, or as a letter of opinion simply giving only the appraiser's conclusion of value, with no supporting data, Stapleton, Moran and Williams write. Appraisers, who must be licensed in Ontario, consider numerous factors such as square footage, construction quality, design, floor plan, amenities and energy efficiency. Other issues taken into account are neighbourhood quality and a property's proximity to transportation, shopping and schools. Appraisers also look at lot size, topography, view and landscaping. Comparative market analysis is an informal estimate of market value performed by a real estate agent or broker. Give me a call if you would like a comparative market analysis of your property. People also can do their own cost comparison using public records maintained by their local registry office. This listing can be found in the Government of Ontario 000099 Pages under Consumer and Commercial relations. In Waterloo Region, the Land Registry Office is at 200 Frederick Street Kitchener (519) 571-6043. I'm confused.... What's the difference between the
list price, appraisal price, purchase price and sales price? The appraisal price is another estimate of value. The appraised price is how much money a professional appraiser estimates the home to be worth and usually is based on "comps," or sales of comparable homes in the same area. Purchase price and sales price are the same thing. Both terms mean the amount of money the successful buyer actually pays out to purchase the home. © 1996-98 by Cassel & Associates all rights reserved |
Let
us deal with the most Frequently Asked Questions about selling a home. If
you have any additional questions I will be able and glad to answer them.
