This article is not about the secrets of buying a rental property for no money down and half the cost of the market value of the home. I’m not Tom Vu or Don Lapre and I am not in jail.
In Canada, the no money down home did use to exist, however, not anymore. Some banks and/or lenders were willing to lend you the 5% deposit so that you don’t have to pay a dime from your own pockets to purchase a house. However, given the current financial situation with tighter lending restrictions, there will be no bank or lenders who is able to do that in Canada.
The buying home for half price did use to exist as well. At one point, foreclosures in Canada would allow foreclosed homes to be sold at very cheap prices. The new law, which has been in placed for several years now require the homes be sold at the highest possible price for foreclosed homes or else the lenders could be sued. Hence, sometimes foreclosed homes sell higher because Canadians have the misconception that foreclosed homes are a excellent deal causing it to have a reverse affect. There have been many people buying foreclosed homes believing they got a good deal and not performing Property Management a thorough check regarding the actual value of the home.
Now, clearing out the quick money maker myths of buying homes, there are still many things you need to be alert to before starting.
If there exist ever a business with an increase of sneaky sales tactics and money motivated people, it’s got to the Real Estate industry. As a buyer, you will be dishing out $350 000 and everyone wants a bit. The Real Estate Agents want a piece. The lenders want a piece. The lawyers want a piece and the sellers want piece. No wonder there are so many scams in this industry.
The first thing to be aware of is the Real Estate Agent. A Real Estate Agent is suppose to act on your behalf to buy or sell the home. Both the buyer of the home and seller of the home will have their own Real Estate Agent called a Buyer’s Real Estate Agent and a Seller’s Real Estate Agent.
In Canada, each AGENT gets an average of 2.5% and sometimes 2% for the commission of selling the house. Some REALTORS provide cash return rewards. Canadian Real Estate Agents gets higher commission than somewhere else. In United States, their REALTORS only get 1% of the commission and their homes are in fact much cheaper. Even though Real Estate Agents will be the least educated of the parties mixed up in buying home transaction, they appear to be getting the biggest piece of the pie.
Do not listen to their gimmicks on Real Estate Agents are ethical. (http://www.howrealtorshelp.ca) Where do they get the idea any Real Estate Agent off the road is ethical. Their claim is founded on these tests they pass to become a Real Estate Agent. Agents passing a test does not meant hey are ethical. It only means they are able to remember enough to pass the test.
One would believe it must be the true Estate Agent’s job to greatly help the buyer ensure the house is of value. Rightly so, many buyers depend on the Real Estate Agent to safeguard them and offer them advice and in my opinion, the ethical AGENT should do that. However, the real reality is that REALTORS do not make money unless if the home is bought. The reality is that the Real Estate Agent’s salary is not truly dependent on giving you advice. The Real Estate Agent’s job is to get the buyer to get a home through them so they can get paid!
As a result of this, what eventually ends up happening, are two types of Real Estate Agents with variations in between. The first type may be the honest agent with the belief “EASILY work hard and treat my buyer right, the buyer will come back again to buy more homes from me. The next type is the “I have to get the buyer to buy a house quickly in order that I can move on to another buyer (sucker) so that I could maximize my time for profit.” The end result is that you are searching for the first type and you also want to steer clear of the second type.